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Thursday, Mar 28, 2024

Hardware Firms Find Welcome In Chatsworth

Shaun Arora, one of the brains behind Make in L.A., an accelerator in Chatsworth for startups that make things, knew that to be successful it would take more than just operating an accelerator. So, he and his partners, Noramay Cadena and Carmen Palafox, started a venture fund. MiLA Capital invests in seed and pre-seed stage companies at the intersection of technology and manufacturing. “We needed to do something bigger and different,” Arora said. MiLA Capital has been investing for more than four years and has put money into 19 companies, and not just in California. It evolved out of Make in L.A., which Arora said was at a crossroads of figuring out whether it will be a pre-accelerator program versus a full-on accelerator. “We have been fine tuning our model,” Cadena said. “Our performance to date validates that model and we are currently raising our second fund of $40 million so we can scale the work we do.” The companies the fund has invested in have received payments in the range of $75,000 to $150,000. But starting in the next 12 months that will ramp up to $1 million, Arora said. “So, companies will get anywhere from $100,000 to $1 million,” he added. There have been companies the fund has put money into that were found by MiLA Capital’s partners. Other times, companies come to the fund after discovering it through an online search. Still, others come through the fund’s network of some 3,000 investors that the trio talk to and are sent because those companies do not fit the investors’ criteria. “Not a lot of venture investors want to invest in what is typically known as hardware,” Arora said. That is where MiLA Capital is different. It embraces startups that want to make a physical product and not just cloud-based software or an app. Among the companies the fund has put money into is Rufus Labs Inc., in West Hollywood. The company develops wearables for a warehouse, manufacturing, retail and even a battlefield setting. Cadena said that MiLA Capital invested in the company in 2016 as it emerged from a crowdfunding campaign that raised $800,000 for its devices. “They came through our (accelerator) program and we helped them make the transition from a consumer product to an enterprise product,” Cadena added. “They are still around and have some pilots with some pretty big customers. They are getting ready for another infusion of capital.” Another company the fund has invested in is Hava Health, Inc., in Philadelphia, which is developing the Hale smoking cessation device. “A user is able to use this like they would an e-cigarette,” Cadena explained. “They can program their desired stop date and the device will help wean them (off smoking) over that period of time.” Other startups the fund has in its portfolio include Dash Systems, in Los Angeles, developer of a drone to deliver supplies and packages to areas inaccessible to trucks and ships.

Mark Madler
Mark Madler
Mark R. Madler covers aviation & aerospace, manufacturing, technology, automotive & transportation, media & entertainment and the Antelope Valley. He joined the company in February 2006. Madler previously worked as a reporter for the Burbank Leader. Before that, he was a reporter for the City News Bureau of Chicago and several daily newspapers in the suburban Chicago area. He has a bachelor’s of science degree in journalism from the University of Illinois, Urbana-Champaign.

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