As investment in Silicon Valley technology ventures slows down (successful stock-market debuts for tech firms are rare these days), there's one bright spot in the scene: Los Angeles.
The arrival of Upload L.A., a 20,000-square-foot shared workspace for virtual reality and augmented reality firms, is indicative of the kind of growth that's happening in the SoCal tech community known as Silicon Beach. When it opens April 13, the Del Rey building will be home to more than 100 creators and developers and will offer virtual-reality production systems, camera rentals, open workspace, motion-capture studios, private offices and even an academy where tech hopefuls can learn virtual-reality production. The facility is more than three times the size of the firm's sister digs in San Francisco.
"The industry is really growing, and L.A. seemed like the perfect place for us," CEO Taylor Freeman says. "We saw a lot of the startup activity centered around Silicon Beach and downtown and wanted to be a part of it."
By at least one estimate, the virtual reality industry could be worth nearly $34 billion in 2022, with much of that coming through Los Angeles. The city's deep-rooted film and television industry mean it's an ideal place to cash in on VR if it explodes as expected.
"Entertainment and technology have gone together for a long time," says Andrea Belz, the vice dean for technology innovation and entrepreneurship at the USC Viterbi School of Engineering. "L.A. is a great place to do that. There's a lot of talent here to support it."
Randy Saaf, CEO of L.A.-based VR gaming company Lucid Sight, says the virtual reality medium is ripe for shared workspaces because the cost of computers and headsets for VR work is prohibitive. "VR can be kind of a high-cost endeavor for a startup," he says. "Shared workspace is a good way for a small shop to get up and running quickly."
The 2015 Startup Ecosystem global rankings from startup research firm Compass put L.A. in third place behind No. 1 Silicon Valley and No. 2 New York. It's not like L.A.-based Snapchat and its big-money debut on the stock market — or Upload LA's launch — will change that overnight. But their presence is likely to attract even more investment.
"Investors from other parts of the country go to Silicon Valley because they can access a much deeper talent pool," USC's Belz says. "That same pool exists here in L.A. Talent here tends to give investors a lot of options."
Virtual reality, for example, can include film, gaming, advertising and even therapeutic treatment. For instance, post-traumatic stress disorder might be treated with "immersive experiences that put you in a different environment," Belz says.
Saaf's Lucid Sight is taking movie trailers and giving them the VR treatment so they can be seen in virtual reality games. "That's an entire pipeline of business for VR here in L.A.," he says.
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And investors are taking notice.
"People who invest in movies are different from your typical Silicon Valley investor," Saaf says. "Now you're seeing media dollars that traditionally only go to media and tech dollars that traditionally only go to tech converging in Silicon Beach."