on LA Startups & Tech
David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.
Parallel Systems has big dreams for the future of railway freight operations, and it seems that the venture capital world has taken notice.
The Los Angeles-based transportation startup announced a $49.55 million Series A funding round as it emerged from stealth mode on Wednesday. The round was led by Anthos Capital, with additional investments from the likes of Congruent Ventures, Riot Ventures and Embark Ventures.
Comprised of former SpaceX, Google and Tesla engineers, Parallel Systems is aiming to develop autonomous and electric freight train cars that would make the American shipping industry greener and more efficient.
“We’ve been pretty quiet about what we’ve been doing,” Parallel Systems CEO Matt Soule, formerly the principal avionics engineer at SpaceX, told dot.LA. “Our website has been pretty barren.” Soule co-founded the company two years ago with fellow former SpaceX engineers John Howard and Ben Stabler. Including $3.6 million in seed funding, the startup has now raised more than $53 million to date.
Parallel Systems’ technology relies on replacing traditional diesel-powered locomotives with battery-powered freight cars. In its model, each train car is self-powered, and can break apart from or join together with other cars as needed. In theory, this ability to autonomously break apart and reassemble as needed would reduce the need for switching stations, where trains are reorganized and rerouted manually.
It could also drastically reduce the significant physical footprint of trains, converting them from two-mile-long behemoths into “platoons” of 20-to-50 cars that wouldn’t require massive terminals for loading and unloading. Smaller trains would be able to travel closer to their final destinations before being unloaded—reducing trucking emissions, which account for roughly 7% of all greenhouse gas emissions in the U.S., in the process.
“The opportunity we’ve been after is kind of decarbonizing freight from a new angle,” Soule said.
All of these ideas would be beneficial toward alleviating America’s clogged supply chains and reaching its ambitious carbon emission goals—if they were able to be integrated into America’s existing rail infrastructure. On that front, some experts are skeptical.
“My first instinct was that this looks like SpaceX engineers getting bored and working on something that they know nothing about,” Chris Caplice, executive director of the Massachusetts Institute of Technology’s Center for Transportation & Logistics, told dot.LA. “They didn’t think about the larger system—whether it's regulatory, the network itself, the rail operations or the labor involved. I think they just found a technological solution to a problem they wanted to solve.”
From left: Parallel Systems co-founders Ben Stabler, Matt Soule and John Howard.Courtesy of Parallel Systems
Caplice worries that Parallel Systems’ technology fails to consider the realities of America’s existing rail network. Today, rail lines are divided into signal blocks, which can range from less than a mile to 15 miles long; these blocks are in fixed geographic positions, and only one train at a time is permitted into any signal block. For the new autonomous, single-car system to work, “you would have to put in thousands more control points in different places to get the network chopped down small enough to do this,” according to Dale Lewis, the former director of strategic analysis for CSX Transportation.
Even then, it likely still wouldn’t look like what Parallel Systems is imagining, with cars continuously breaking in and out of platoons. To realize what the company is pitching, Lewis says you’d need a complete revamp of the entire rail system.
“If [Parallel Systems] can bring in a couple people who have deep experience in operations planning…and sit with them for a day to go through how this would fit in the system, they’d probably come to some different conclusions about what they’ve got,” he said.
While the startup doesn’t employ any full-time railway operations specialists, Soule says Parallel Systems has brought in “veterans from the industry” who have helped them “understand the business.” He says safety is a top priority for the company; indeed, their vehicles would feature AI that would allow them to come to a stop quicker than traditional trains. No one is going to argue against safer trains—though most modern trains already come equipped with a system known as Positive Train Control, which autonomously prevents train-to-train collisions and other human errors.
Still, the 24-person firm is planning to hire heavily on the software side as it tries to figure out how to integrate its ambitious designs into the existing infrastructure. On the hardware side, Parallel Systems is working toward the second iteration of its prototype battery-electric rail vehicle, and testing it on a closed track in California.
“We’re going as fast as we can in terms of building the tech,” Soule said.
Parallel Systems Explainer VideoVideo via www.youtube.com
David Shultz reports on clean technology and electric vehicles, among other industries, for dot.LA. His writing has appeared in The Atlantic, Outside, Nautilus and many other publications.
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
When avatar startup Genies raised $150 million in April, the company released an unusual message to the public: “Farewell.”
The Marina del Rey-based unicorn, which makes cartoon-like avatars for celebrities and aims to “build an avatar for every single person on Earth,” didn’t go under. Rather, Genies announced it would stay quiet for a while to focus on building avatar-creation products.
Genies representatives told dot.LA that the firm is now seeking more creators to try its creation tools for 3D avatars, digital fashion items and virtual experiences. On Thursday, the startup launched a three-week program called DIY Collective, which will mentor and financially support up-and-coming creatives.
Similar programs are common in the startup world and in the creator economy. For example, social media companies can use accelerator programs not only to support rising stars but to lure those creators—and their audiences—to the company’s platforms. Genies believes avatars will be a crucial part of the internet’s future and is similarly using its program to encourage creators to launch brands using Genies’ platform.
“I think us being able to work hands on with this next era—this next generation of designers and entrepreneurs—not only gets us a chance to understand how people want to use our platform and tools, but also allows us to nurture those types of creators that are going to exist and continue to build within our ecosystem,” said Allison Sturges, Genies’ head of strategic partnerships.
DIY Collective’s initial cohort will include roughly 15 people, Sturges said. They will spend three weeks at the Genies headquarters, participating in workshops and hearing from CEOs, fashion designers, tattoo artists and speakers from other industries, she added. Genies will provide creatives with funding to build brands and audiences, though Sturges declined to share how much. By the end of the program, participants will be able to sell digital goods through the company’s NFT marketplace, The Warehouse. There, people can buy, sell and trade avatar creations, such as wearable items.
Genies will accept applications for the debut program until Aug. 1. It will kick off on Aug. 8, and previous experience in digital fashion and 3D art development is not required.
Sturges said that the program will teach people “about the tools and capabilities that they will have” through Genies’ platform, as well as “how to think about building their own avatar ecosystem brands and even their own audience.”
Founded in 2017, Genies established itself by making avatars for celebrities from Rihanna to Russell Westbrook, who have used the online lookalikes for social media and sponsorship opportunities. The 150-person company, which has raised at least $250 million to date, has secured partnerships with Universal Music Group and Warner Music Group to make avatars for each music label’s entire roster of artists. Former Disney boss Bob Iger joined the company’s board in March.
The company wants to extend avatars to everyone else. Avatars—digital figures that represent an individual—may be the way people interact with each other in the 3D virtual worlds of the metaverse, the much-hyped iteration of the internet where users may one day work, shop and socialize. A company spokesperson previously told dot.LA that Genies has been beta testing avatar creator tools with invite-only users and gives creators “full ownership and commercialization rights” over their creations collecting a 5% transaction fee each time an avatar NFT is sold.
“It's an opportunity for people to build their most expressive and authentic self within this digital era,” Sturges said of avatars.
The company’s call for creators could be a sign that Genies is close to rolling out the Warehouse and its tools publicly. Asked what these avatar tools might look like, the startup went somewhat quiet again.
Allison Sturges said, “I think that's probably something that I'll hold off on sharing. We will be rolling some of this out soon.”
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
LA Tech Week—a weeklong showcase of the region’s growing startup ecosystem—is coming this August.
The seven-day series of events, from Aug. 15 through Aug. 21, is a chance for the Los Angeles startup community to network, share insights and pitch themselves to investors. It comes a year after hundreds of people gathered for a similar event that allowed the L.A. tech community—often in the shadow of Silicon Valley—to flex its muscles.
From fireside chats with prominent founders to a panel on aerospace, here are some highlights from the roughly 30 events happening during LA Tech Week, including one hosted by dot.LA.
DoorDash’s Founding Story: Stanley Tang, a cofounder and chief product officer of delivery giant DoorDash, speaks with Pear VC's founding managing partner, Pejman Nozad. They'll discuss how to grow a tech company from seed stage all the way to an initial public offering. Aug. 19 at 10 a.m. to 12 p.m. in Santa Monica.
The Founders Guide to LA: A presentation from dot.LA cofounder and executive chairman Spencer Rascoff, who co-founded Zillow and served as the real estate marketplace firm’s CEO. Aug. 16 from 6 p.m. to 9 p.m. in Brentwood.
Time To Build: Los Angeles: Venture capital firm Andreessen Horowitz (a16z) hosts a discussion on how L.A. can maintain its momentum as one of the fastest-growing tech hubs in the U.S. Featured speakers include a16z general partners Connie Chan and Andrew Chen, as well as Grant Lafontaine, the cofounder and CEO of shopping marketplace Whatnot. Aug. 19 from 2 p.m. to 8 p.m. in Santa Monica.
How to Build Successful Startups in Difficult Industries: Leaders from Southern California’s healthcare and aerospace startups gather for panels and networking opportunities. Hosted by TechStars, the event includes speakers from the U.S. Space Force, NASA Jet Propulsion Lab, Applied VR and University of California Irvine. Aug. 15 from 1 p.m. to 5 p.m. in Culver City.
LA Tech Week Demo Day: Early stage startups from the L.A. area pitch a panel of judges including a16z’s Andrew Chen and Nikita Bier, who co-founded the Facebook-acquired social media app tbh. Inside a room of 100 tech leaders in a Beverly Hills mansion, the pitch contest is run by demo day events platform Stonks and live-in accelerator Launch House. Aug. 17 from 12:30 p.m. to 3 p.m. in Beverly Hills.
Registration information and a full list of LA Tech Week events can be found here.
Christian Hetrick is dot.LA's Entertainment Tech Reporter. He was formerly a business reporter for the Philadelphia Inquirer and reported on New Jersey politics for the Observer and the Press of Atlantic City.
After over 20 years of failure, Los Angeles has a new contract to add 3,000 high-tech bus shelters to city streets by 2033. The City Council voted 12-1 to approve an agreement with curbside management and micromobility operator Tranzito-Vector.
The new shelters will have amenities like digital e-paper displays with real-time bus information, along with WIFI and phone charging capabilities. With temperatures in the San Fernando Valley hitting 110 degrees in recent weeks, StreetsLA is also looking to add cooling features to bus shelters in the hottest parts of the city. The contract will begin January 2023.
The move comes after the previous 20-year street furniture contract failed to deliver on promises for both an increase in the number of bus shelters and advertising revenue. The city and the previous contractor blamed the arduous permitting approval process for the shortfall. Eight different city agencies and individual Council members were required to sign-off on each bus shelter before it could be built—and there was no enforced deadline to respond. That, and excessive NIMBYism has led to hundreds of bus shelters remaining in limbo, advocates say. The new contract will streamline the process by only requiring two approvals and batch approving requests.
“I really do think it’s embarrassing that the city can’t provide the most basic infrastructure like bus shelters,” said Council President Nury Martinez, pledging to meet with Tranzito and StreetsLA to make sure bus shelters are placed where they are most needed in her district.
Questions remain about where the program’s funding will come from, with the city investing in capital expenditures to build bus shelters and actively seeking federal and state funding. Previously, the contractor paid all the costs of installing and maintaining shelters.
“I’m concerned about making a commitment to a mirage,” said Councilmember Monica Rodriguez, the sole “no” vote on the contract.
Councilmember Mike Bonin described taking the 33 bus from his home on the Westside to City Hall. “It was brutal. It was hitting close to 100 that day. People were suffering standing there in the heat.”
Bonin noted that although he hates digital advertising, he supports providing better amenities for bus riders who are predominantly low-income and transit-dependent. “Not only is this a public health issue, this is a civil rights issue,” he said.
So far, the city is still working on acquiring the $42 needed for the first year of the program, with a $5 million grant from Metro, $1 million from the city and $30 million pending from a public works trust fund. L.A. is projected to earn 60.5% of ad revenue over the course of the contract, with $90 million guaranteed over 10 years.
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