Get in the KNOW
on LA Startups & Tech
Kristin Snyder is dot.LA's 2022/23 Editorial Fellow. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
The video begins when a blue-gloved hand pries a screwdriver inside a car’s ignition switch. Parts dangle off the dashboard as the camera reveals the exposed interior where a USB cable could serve as a key to start the engine. This is the notorious “Kia Challenge.” And it’s been trending on TikTok since July.
The original tutorial for how to steal a Kia has since been deleted. But others just like it highlight the ways in which specific models—those that don’t have a chip in the ignition that prevents the car from starting when the key is not present—can be hijacked with a screwdriver or a USB charging cable.
The Los Angeles Police Department first noticed the trend in 2021, months before the TikTok challenge went viral. Though they too have since attributed the rising number of thefts to TikTok. In a statement, LAPD Chief Michel Moore linked this year’s 85% increase in car theft and 1,600 stolen Kias and Hyundais to the challenge. But it wasn’t until this past August, that the LAPD put out a community alert to warn people who own the vehicles suggesting that they lock their car doors, park in secure locations and install a GPS tracking system.
In recent months, the Kia Challenge has led to so much car theft that police departments acrossthecountry have been scrambling to figure out ways to reign in the social media-supercharged crime trend. In Montgomery County, Ohio, Major Jason Hall, who works with the Dayton Police Department’s Patrol Operations (DPD) says a 61% increase in grand theft auto led multiple police departments to form a task force dedicated to stopping TikTok-inspired car theft.
Hall says local law enforcement agencies began sharing data several months ago after noticing the rising number of local car thefts. The task force allows them to not only work jointly to recover stolen vehicles and apprehend thieves across the various counties, but officers within the task force are granted county-wide jurisdiction.
Having located seven stolen cars and arrested 12 individuals, Hall says the task force monitors social media to identify potential crime trends. DPD first noticed the spike in Kia and Hyundai thefts in July, when the information about how to do so began to spread on TikTok. Hall says evaluating crimes spread through social media doesn’t differ much from looking into more traditional methods of spreading information.
“The major difference is that social media appears to have the ability to accelerate the proliferation of these crimes,” Hall says.
To be clear, the issue of Kias and Hyundais being vulnerable to carjackings has existed before people began pointing fingers at the video platform. A number of articles and Redditthreads written prior to the TikTok trend point to the ease with which thieves can hijack Kias and Hyundais. In Milwaukee, where the trend seemingly originated, there was a 150% increase in car theft in 2021, more than half of which were exclusively Kias and Hyundais.
In response to the viral trend, both Kia and Hyundai have provided anti-theft kits for owners of vulnerable models. Though, it’s also worth noting that both manufacturers are facing a class action lawsuit in Orange County claiming that the car companies deliberately left out anti-theft parts that made the vehicles easy to steal.
Still, this isn’t the first time police have had to warn against the potential impacts of a viral challenge. Earlier this year, law enforcement officials in Georgia and Florida alerted the public to people shooting unsuspecting citizens with gel balls as part of the Orbeez challenge. In 2021, police also arrested students after the devious licks challenge encouraged them to vandalize school property.
But up until now, these trends had been examined through existing task forces. In 2018, the Tangipahoa Parish Sheriff's Office retail theft task force investigated the theft of Tide Pods at a time when people were eating the laundry detergent packets as part of the Tide Pod challenge. Additionally, the platforms themselves have taken action to remove content depicting dangerous or illegal actions, as YouTube did when people were injured while participating in the “Bird Box” challenge blindfolded. But the Kia challenge is a bit different. It’s the first of its kind to actively encourage theft. Which explains why it necessitates an approach like the task force.
Whether similar social media-induced task forces will pop up in other jurisdictions is hard to know. LAPD did not respond to dot.LA’s request for comment. But as frustration mounts among Kia and Hyundai owners, local law enforcement officials will have to figure out how to confront the wide reach of TikTok’s algorithm.
“This [the task force] is a very efficient approach,” Hall says. “Since these crimes are proliferating throughout multiple jurisdictions.”
Kristin Snyder is dot.LA's 2022/23 Editorial Fellow. She previously interned with Tiger Oak Media and led the arts section for UCLA's Daily Bruin.
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.
Xeal Energy, a high tech charging infrastructure company focused on apartment buildings and commercial real estate properties, secured $40 million dollars in Series B funding this week. Keyframe Capital led the round and ArcTern Ventures, Moderne Ventures, Ramez Naam, Nexus Labs, Wind Ventures and Alpaca VC also contributed.
For the last few years, Xeal has prided itself on going after customers that have typically been overlooked in the charging market. When dot.LA spoke with cofounder and CEO Alexander Isaacson, he’d just gotten back from a trip from Chicago where he’d been attending a senior living conference to see if there was a fit for chargers in retirement homes or assisted living communities. “It's cool to see other asset types—not just apartments and workplaces, but new types of buildings—starting to think about charging stations,” said Isaacson.
The new money will go towards helping the company expand its charging network. In addition to providing the charger hardware itself, Xeal also provides software and analytics to help charger owners and users maximize their money. In the last year the company has grown its network of real estate partners from 12 to nearly 100 and expects to hit 10,000 chargers by the end of the year. This business model allows Xeal to make money by charging property owners for installation, plus a subscription model fee for access to the analytics. Property owners then make their investment back through the revenue generated via the charger, some of which is, again, shared with Xeal.
Xeal’s rapid expansion in the last twelve months has also allowed the company to see up close, many of the common problems facing EV charging. Charger uptime and maintenance remains a daunting problem for the entire EV industry, but Xeal thinks it has a solution that will help its clients get closer to 100% charger uptime. The answer comes in the form of a software solution called “Apollo,” which seeks to upend the traditional IT infrastructure underlying most charger networks and replace it with a decentralized system that borrows on the same principles underlying blockchain currencies.
courtesy of Xeal Energy courtesy of Xeal Energy
Most charging stations are centralized, meaning that each charger connects to the internet before connecting to a central server at a distant location. Any operation requires that the link between charger and serve be active. That can mean that to charge your car in Los Angeles, the charger has to communicate with an Amazon Web Services cloud server all the way in Texas. Similar to Christmas lights, if there’s any issue with that chain, charging won’t work, and Isaacson said, “the whole system breaks.” Xeal’s Apollo software trades the centralized model for a “distributed ledger” that treats every single smartphone as a data center. Anytime anyone’s phone accesses a Xeal charger, it creates a new snapshot of the entire network. Information on every charger’s status, price, and operability is updated with each transaction. If a Xeal charger loses connectivity and therefore can’t process payment for some reason, its neighbors are alerted to the issue and as a result send that data to a nearby smartphone. This updates the digital ledger and alerts Xeal to the nature of the problem.
“I’m not sure if you've ever taken a trip across the country to some of the public charging stations, but a big issue is that if they don't work, you have to call a person,” said Isaacson. “They'll just tell you to move to the next [charging station]. They really have no idea of what the issue is.”
Though the startup was born out of the Los Angeles Cleantech Incubator (LACI) and maintains its engineering lab in Venice, Xeal has recently moved its headquarters to New York City. While still small—they just hired their 30th employee this week—the new series B money gives the company flexibility and plenty of room for growth. In the Venice lab, engineers are working on ways to apply (and eventually sell) Xeal’s Apollo protocol to other chargers, which would add yet another revenue stream for the company. Isaacson said he’s in discussion with “a few major players” but declined to name names. In the meantime, the company plans to continue expanding its charging network to an even more diverse set of real estate classes and types of electric vehicles.
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.
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
Scrubs maker FIGS gained a win in court this week after a jury found there was no merit to the false advertising and misleading business practices claims brought by rival medical apparel maker Strategic Partners Inc. (SPI).
The lawsuit which was first filed in January 2019 alleged that FIGS co-founders Trina Spear and Heather Hasson were making false claims about their scrubs’ ability to protect the wearer from bacteria or disease.
A jury ruled SPI’s claims against FIGS weren’t valid on Nov. 3. An attorney for SPI—which does business under the moniker Careismatic Brands—told dot.LA the jury ruled that SPI didn’t meet its obligation to prove to the court that FIGS’ alleged false advertising negatively affected a substantial portion of customers.
In a jury verdict viewed by dot.LA Friday, the jury said that FIGS' claims that their scrubs killed bacteria were both not literally false nor deceived a "substantial segment of FIGS' audience of consumers." The jury also ruled that FIGS did not engage in false advertising, and that SPI was not entitled any damages.
In response, FIGS’ chief legal officer Todd Maron said in a statement Friday that “this verdict is a powerful win, not only for FIGS, but for fair competition.” Maron added that, “this marks the end of a nasty, four-year campaign against FIGS, engineered by SPI’s former CEO Mike Singer and based on outright falsehoods. SPI has sued competitors at least twice before in similar situations, and we felt it was important to stand up for the truth when confronted with a baseless lawsuit.”
SPI’s counsel told dot.LA the medical apparel maker plans to appeal the ruling. Charismatic Brands CEO Girisha Chandraraj added in a statement that, “Careismatic Brands takes our position as a leader in the medical apparel industry seriously, and brought this case to protect healthcare workers, force FIGS to stop making false claims, and ensure a fair and transparent marketplace.”
To that end, since the SPI trial first came to light, a securities class action lawsuit has been filed against FIGS. Any class action claims are likely to suffer a dead end since FIGS’ terms of service clearly states that people who buy its products online agree to an arbitration clause that prevents a class action case.
In addition FIGS is currently being investigated for several other securities lawsuits, many of which have been announced in recent days. According to an attorney at a firm investigating one such lawsuit, it is common for law firms that focus on securities to trawl for cases such as FIGS v. SPI. Many law firms will use cases like this one as a jumping-off point to encourage disgruntled investors to band together and sue for compensation.
FIGS declined to comment on the other pending litigation.
As of this writing, FIGS’ stock is trending up by 1.5% to $6.70 per share. Though that’s far from its debut stock price of $29 per share after its May 2021 IPO when the scrubs maker was valued at over $4.5 billion.
For now, FIGS can turn its focus away from the courtroom and towards its third quarter earnings, which are expected Nov. 10. The upcoming earnings could also potentially shed light on how this lawsuit has affected FIGS’ business, if at all. The company reported $4.9 million in net income last quarter, and if it can continue to work around supply chain constraints and shipping delays, analysts expect that trend to continue.
Correction: This story has been updated to reflect when SPI first sued FIGS in January 2019.
Samson Amore is a reporter for dot.LA. He holds a degree in journalism from Emerson College and previously covered technology and entertainment for TheWrap and reported on the SoCal startup scene for the Los Angeles Business Journal. Send tips or pitches to samsonamore@dot.la and find him on Twitter @Samsonamore.
Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
Online financial platform Zest AI raised fresh funding to continue expanding access to AI-automated credit underwriting for all lenders. While cybersecurity products developer MedCrypt landed more funding to scale its cryptography, behavior monitoring, and vulnerability inventory products across various types of medical devices.
***
Zest AI, a Burbank-based online financial platform intended to improve credit underwriting, raised $50 million in a new growth round co-led by Insight Partners and CMFG Ventures.
San Diego-based cybersecurity products developer MedCrypt raised $25 million in a Series B funding round from Intuitive Ventures, Johnson & Johnson Innovation–JJDC, Inc, Section 32, Eniac Ventures, Anzu Partners, and Dolby Family Ventures.
West Hollywood-based digital card and gifting platform Givingli raised $10 million in a Series A funding round led by Seven Seven Six.
OptionsMD, a Los Angeles-based telehealth startup, raised $3.8 million in pre-seed funding led by Bread & Butter Ventures.
Calabasas-based instant checkout platform TAGS Commerce raised a $3.5 million pre-seed funding round from XRC Labs, Gaingels, Not Boring, Tiny Capital, Vibe Capital, Unpopular Ventures.
According to an SEC filing, Kingswood Capital Management, a Los Angeles-based venture capital and private equity firm raised a $506 million fund.
Raises is dot.LA’s weekly feature highlighting venture capital funding news across Southern California’s tech and startup ecosystem. Please send fundraising news to Decerry Donato (decerrydonato@dot.la).
Decerry Donato is a reporter at dot.LA. Prior to that, she was an editorial fellow at the company. Decerry received her bachelor's degree in literary journalism from the University of California, Irvine. She continues to write stories to inform the community about issues or events that take place in the L.A. area. On the weekends, she can be found hiking in the Angeles National forest or sifting through racks at your local thrift store.
© dot.LA All rights reserved