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Sunday, Oct 2, 2022

Venture Capitalists Investing in Food, Data, Security

For venture capital based in OC there’s an 800-pound gorilla and everyone else.

The simian is Toba Capital, with $1.3 billion in funds under management—seven times the next competitor.

This year’s directory shows 13 venture capital funds based in Orange County, with assets starting at $10 million.

The baker’s dozen of backers isn’t ranked: the directory collects investor groups and offers a glimpse of their work.

Aping Trends

Toba is the investment group of Vinny Smith, the erstwhile technology entrepreneur turned financial backer of several of OC’s more prominent firms of late, including data analytics software maker Alteryx Inc. (see story, page 1).

Smith began investing in the Irvine-based company in 2013 when it was valued at less than $100 million; it’s now worth nearly $10 billion by market cap.

Even a relatively slower year—$25 million in local buy-ins, down 29%—is still a pretty good 12 months.

Toba’s $1.3 billion in assets is 18% higher year-over-year.

In 2019, it participated in a $26 million Series B round for Skupos, after leading its $6.4 million Series A the year before. Skupos provides consumer data at convenience store gas stations.

Toba has stakes in three dozen companies, including several in OC. In addition to scoring big on Alteryx, it owns a stake in NextVR Inc. in Newport Beach, which broadcasts live events in virtual reality.

Toba has sold stakes in 17 investments over the years, including three IPOs.

Ladera Ranch-based Okapi Venture Capital, which invests in seed and early-stage tech firms, and largely SoCal startups, kicked $26 million into new companies, according to our data. Okapi was previously an early investor in CrowdStrike Holdings Inc. (Nasdaq: CRWD), the cybersecurity company founded in Irvine.

CrowdStrike kept an outpost in OC, moved headquarters to San Jose and went public last year at $34. It trades now at about $64 for a $13.4 billion market cap.

Okapi made more than 30 times return on its investment.

Killing Softly

A third prominent name in OC circles, True Family Enterprises in Newport Beach, declined to provide data but has quite a local rep under wunderkind entrepreneurial founders Alan and Twila True.

Twila won a 2016 Business Journal Excellence in Entrepreneurship award while one of their companies was once the largest exporter of office chairs from China. The family office’s website lists 10 investments for itself and True Venture Capital, including firms in food, beverage, technology and financial services.

The couple did pretty well last year in real estate too.

They sold their Harbor Island estate in Newport Beach for $37 million and their 27,000-square-foot Newport Beach headquarters for $12.3 million.

Others doing business here:

• Newport Beach-based Cambridge Companies SPG, with $185 million funds under management, likes healthful food brands. It participated in a $7.6 million Series C round for 4th & Heart, which makes Woke energy bars, and a $7.7 million round for beverage maker LifeAid.

• CerraCap Ventures in Costa Mesa was co-founded in 2015 by Saurabh Ranjan and Saurabh Suri, who had worked together at UST Global. They hit $135 million in funds, up from $100 million year-over-year, with $6.5 million of investing, up from $3.8 million.

2019 was a big year for CerraCap, which also got backing from Mexico Ventures, a fund that helps south of the border enterprises gain global access. One, Deep Instinct, works with tech giant HP Inc. on cybersecurity.

Rx3, Raj

• Rx3 Ventures caught $50 million in backing. It was launched by Green Bay Packers QB Aaron Rodgers and his college friend Nate Raabe who brought in his boss, Byron Roth of Roth Capital.

Rx3 is based in Roth Capital’s Newport Beach office; other backers include current and former USC and New York Jets QBs Sam Darnold and Mark Sanchez, as well as former professional auto racer Danica Patrick.

Another investor in Rx3 is Alex Bhathal, managing partner and founder of Newport Beach’s Raj Capital LLC, the asset management platform of the Bhathal family, and co-owner of Sacramento Basketball Holdings LLC.

To date, Rx3 has invested in firms that specialize in eyewear, yoga studios and a rowing machine like Wall Street darling Peleton.

Peter J. Brennan
Peter J. Brennan
Peter J. Brennan has been a journalist for 40 years. He spent a decade in Latin America covering wars, narcotic traffickers, earthquakes, and business. His resume includes 15 years at Bloomberg News where his headlines and articles sometimes moved the market caps of companies he covered by hundreds of millions of dollars. His articles have been published worldwide, including the New York Times and the Washington Post; he's appeared on CNN, CBC, BBC, and Bloomberg TV. He was awarded a Kiplinger Fellowship at The Ohio State University.

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