San Diego Tech News - September 3, 2021

Well, welcome everyone to the weekly San Diego tech news by Neal Bloom and Jonah Peake from Fresh Brew tech, every Friday, 12:30pm Pacific on Clubhouse. And now, like we said, we record these for you to enjoy on the Tacos and Tech Podcast Network. I'm Neal Bloom. I'm an entrepreneur, investor and community builder. And this is Jonah.

What's up, everybody? Jonah. Sort of serial tech operations with some of the bigger brands. Put scooters on your lawn, help get food delivery with postmates and help your house clean with handy. But now looking to help founders in a little bit of the earlier stages. And that's what led me to the startup community here and looking to do a couple more things. We'll announce those more formally, but just happy to be here and love seeing you all build.

We love it as well. Thanks, Jonah. We got some good stories this week. We kind of pick the top four to five stories that jump out at us. Is interesting to dive into around big and startup tech, sometimes biotech, because we know that's a big thing obviously as well here too. So why don't we jump into the first story here. Mainstay Medical, which is a biotech firm out of Ireland, is opening its first U.S. headquarters. And they're plopping right down in Little Italy, which is cool to see. This is a great storyline for biotech coming to downtown San Diego. We've been talking about this story which, this one specifically came from cbre, which we good friends of ours, you know, they're taking over 23,000 square feet right over in the Little Italy area. And this is great momentum to see coming off of IQ hq, which is building a million square feet of biotech lab space right on the Pacific highway there, right by the Midway. And you know, there's talk about what's coming into Horton Plaza, which is being turned into another million square feet of tech campus. And everyone's, everyone's thinking biotech may be more interesting there because, you know, the Googles and the Apples are not going big campus as much post pandemic. But take us through a little bit what Mainstay does. Jonah.

Yeah, this is funny. I'm pretty apt to see them come downtown. Man, I, I love the idea of having an office in Little Italy. That's got to help them with some recruiting. But yeah, so this one's funny. I'm like paying attention. I'm slouching right now. But basically they have this implantable, this hardware device called the Reactivate. There's an eight there at the end if you want to look that up. But it's basically for chronic back pain. We've been slouching all the time, and basically a doctor will install this piece of hardware in your back. I couldn't quite tell the size. It's got to be pretty small. It looked a little bit like AirPods, I think. It's got to be smaller. And they have two wires that go into the nerves that control your. Let's see, multifidus muscles. I am not. I probably said that horribly wrong, but there's, like, the triangular muscle bundles that are located on either side of the spinal column, and those start to kind of get stressed and maybe spasm or cause sort of lingering back pain. And so basically, when you install this in your back, it's really interesting. You take a remote, and twice a day you're supposed to lay down and use this remote to sort of start the therapy. And so what it does is it sends pulses into those muscles. It's relaxing. I think they said it's really sort of not all that invasive from a procedure standpoint. And it's supposed to help you kind of relieve that back pain. I don't know how long it stays, but, I mean, they're seeing some really good results for people who've had it implanted for almost up to a year. So, you know, it does work. I just don't know if this is sort of the right solution, I guess, to maybe me correcting my horrible posture, or are we just going a little bit more cyborg? And this is just the way that we're going to be living as we transition on, you know, onto devices more often. So I don't. I don't know, man. It's awesome that we can do this. I'm not sure yet. I don't have one installed. But, hey, you know, we'll see. I'm going to work on my posture first.

Yeah, right. Hopefully this is something you don't jump to first. You need. If you just can't get it yourself. Super interesting, but welcome, mainstay to Little Italy in San Diego. I wish I knew how to say welcome in.

English.

Never mind. No, no. In Gaelic. They're from Ireland. All right. Another downtown kind of story. Comic Con. We love Comic Con. The Comic Con Museum is finally set to open in Balboa Park. This is pretty cool. We've been actually friends with the Comic Con team and museum for a few years because startup San Diego used their space two years ago for convergence 2019. So some of you may remember that it's kind of an Empty shell. It's the federal building down in kind of the south part of Bellowell park next to the Air and Space Museum. Kind of a cool looking like Pyramid, Incan or Aztec kind of looking building. And the Comic Con is taking it full time. They are opening, I think it's more like a soft opening this November where they will have full out exhibits and everything like that. And it's, it's super cool to see that they're going to have a year round presence of Comic Con that should really bring a different kind of tourists I would imagine, you know, to, to the region as well. So welcome Comic Con for planting some roots.

I'm pretty amped. I mean kind of Comic Con every single year, mostly on the outside. And it's always, it's such a cool, iconic thing that San Diego has. I'm wondering and maybe you know this, is this going to be part of this sort of like local free museum rotation? Like are we going to be able to pop in on Tuesdays and kind of wander around? I would love to do that. I mean, either way. But that's so cool.

Knowing the team, they're all about accessibility and I know they want to be just as much a part of every other museum in Belleville park. So I wouldn't see why they wouldn't be a part of that. But I'm not going to speak for them if they don't. You heard it here first. We're asking for it. Let's jump into our third story. Pnc, local but huge public financial services group. They're making a $20 billion commitment to environmental finance. Now this is a bigger deal, I think than what the story actually says because they're putting their money where their mouth is. This is a banking financial services group that like I said, public on the New York Stock Exchange, pnc. And they're taking environmental finance to the real level here. So you've got a good definition of environmental finance here.

I was like, what is this? I had to kind of look it up, go a little bit under the hood there. But it basically says is a field of finance that employs market based environmental policy instruments to improve the ecological impact of investment strategies. It sounds like they're investing in anything that has a positive impact on the back end. Which is, which is pretty cool because again, you could kind of, if your, if your goal is to make money, I think there's plenty of ways to do that. But it's kind of cool that they're focusing this bucket a little bit more specifically on you. Know, some, some climate change goals and some other. Some other sort of targets like that.

Yeah, I mean, look, when they are putting down $20 billion for investment and they're putting it into things like green buildings, renewable energy, clean transportation, that all points towards signs that this is the real deal and it's not just lip service. So everything is a little chip and it all starts to chip away and then the dominoes start to fall. And people believe in this because the money is there.

Yeah, it should be fairly obvious too. I mean, I don't see a company like PNC kind of just putting money into this sector for the good of it or the good of their hearts. I wish they would. So there has to be some momentum, like you're saying, with green buildings and renewables that they're seeing as sort of a really good investment opportunity. And that's a sizable chunk. So maybe these are sectors to watch really a little bit more closely. And with the infrastructure bill passing in kind of charging network coming online and a little bit more with a little bit more firepower behind it, I think they're definitely onto something, but they've definitely done their homework. So keep an eye on that industry.

Totally. We got a pair of Amazon stories to talk through. Amazon Fresh grocery store. They're making their first planned fresh grocery store in Poway. So first one in San Diego. This is that. This is that story that the stores that you've heard and talked about, where you walk in, you walk out, you don't have to pay because the cameras and all the other tech are there. So this is cool to see. We will mention that there is another tech company in town, Excel Robotics, that have kind of done the white labeled version of this where you can. It doesn't have to be Amazon, but we'll get to that in a second. You want to take us through like what this store means for San Diego?

Yeah, this is really interesting. So they took over formerly Atlas Market as Capersian Market. I hadn't heard of that before. So I watched a promo video. It's really funny. It's like someone with like a GoPro kind of wandering a standard grocery store. But this is like 44,000 square feet, Twin Peaks Plaza up in Poway. And I think they. I don't really know how the retrofit works actually. We should go and check it out. I haven't actually been to one of these stores. It'd be really fun to see. I have to imagine they just sort of cleared everything out with installation outlet cameras and some camera tech. But one thing that they did, and this is actually pretty typical Amazon fashion, I think, is they kept it under wraps, so no one really knew what was going in there. So they did a lot of construction. And the only, the only reason that people started to find out was because there was a pair of permits that surfaced within the town that had Amazon's name on it. So people didn't really know what was going in there. I did have some. So Amazon, you know, has 17 other locations. It's interesting to kind of move from the sort of the digital world into physical. And we're seeing some trends like that with other big tech. But I was curious if this would be, you know, an intermediate step for kind of where we ultimately go in the future in the sense of will we all in the next 10 years have our groceries delivered? Or, you know, and is this helping us get to that, that space where we're now kind of going? We want to still be able to go into the store, but maybe a little bit more of a tech forward version of that. But, you know, kind of going down and pulling that thread a little further. You know, maybe this is a, maybe this is something that really enables sort of the delivery and having people more easily able to enter and exit the store. You know, an instacart shopper or maybe Amazon, you know, rolls up their own version of this and people can just, you know, charge in and charge out and deliver our groceries. But, you know, maybe, maybe that's something that people really like to do is go and feel and touch the products that they're buying. And that might be, might be something that lasts for a little bit longer. But I'm really not, I'm not certain how long that stays. But, but a couple of things to mention. You know, these aren't typical grocery stores. I mean, these are retrofitted with cameras, vision algorithms, sensors, and they even have, you know, smart shopping carts that will incorporate your, your shopping cart list that you formed before entering the store. And so there's a lot of technology going into these stores and kind of makes me think maybe that, you know, one, this is a great business opportunity, but two, is this something that is sort of a playground for future tech that they might be able to use outside of the grocery store? Something that they're, you know, using it as like a real life playground. So kind of a pretty cool, cool store. We'll have to make the trip. I'm curious myself. But that kind of leads us into the next Amazon story that, you know, when Amazon comes in town they bring, they bring jobs. And so that's kind of where we're going with the next one.

Yeah, before you jump into that, we mentioned Excel Robotics, which does the same thing. They will retrofit a store for you with this kind of tech. And they were the first in San Diego to have a store. We covered it probably about a month ago in East Village. I'm forgetting the name of the store, but accelerabotics is kind of the first, I think in San Diego to get there, which is kind of cool to see that they beat Amazon at their own game. But we welcome it all. Tech for good, hopefully for retail, saves us time and saves us touching things too, which right now is super important. So I'm all for it.

It's at a vantage point if you're interested in checking it out. That's where Excel store is. So that's kind of around B Street, I think.

But yeah, let's jump into the second Amazon story. A new story is out that since 2010 they're credited with creating 4,000 local jobs. This is a mixture. So first of all, yes, they are taking over the world. At the same time, you know that that 4,000 jobs brought $2.3 billion of investment to San Diego, the region, specifically from investment from an infrastructure, from comp compensation and then the 12,000 indirect jobs that come around. This from construction, logistics, professional services to support all these jobs too. Pretty huge, I would say from just looking at one company's impact on us, 4,000 doesn't seem huge. From number of jobs in San Diego, I think we're probably hundreds of thousands of tech workers. But still this does things like get us our packages every day to developing all these new technology that we're using from Amazon Fresh and other things. Their newest thing that they're building is right on the border with Tijuana is 3.3 million square feet of fulfillment center. So yes, San Diego does logistics. Shout out to the Robin Hood podcast, 1500 jobs going into that fulfillment center. Not to mention all the engineering and product management jobs they have up in utc. So pretty huge. What's big about this also is that, you know, now Amazon's competing for our talent as well, just as much from the big companies like Qualcomm and Apple all the way on down to startups here. So, you know, it's good and bad. It means that the talent is getting what it deserves, good paying jobs. But it also means companies have to provide a good working environment, otherwise they could lose their employees without having a good culture. And treating people the way they should be treated. But computer science, software talent, product management, it's awesome that all of them can hopefully stay here more and more. And obviously we're drawing in big tech companies here, so it's a great sign for us.

You know what's interesting to you about that is you'd think in some ways like a company like Amazon could just say, hey, come on up the coast. You know, we're not far away. Seattle's pretty rad. We just took a trip up there. But instead, you know, people are loving it so much in the city that they feel like they have to come down here and sort of join us and have a presence in San Diego. So that says a lot about the community here and the talent here. And they can't really or it's a little bit more challenging to pull talent away from kind of the way we want to live in this wonderful climate.

Yep, yep, totally. Let's jump into our last story. We got a new venture fund coming. So more venture partners. Not the Most Valuable Player MVP. They're launching Fund 4. So they've been here a bit. They're actually from the funds that exist right now. They're one of the oldest. They've been around 10 years. Terry Moore leading that. Shout out to Terry and new partner joining Brady Beauchamp. And together they are investing up to 15 million in this fund. So they're right in between $500,000 and $5 million checks. They've got pretty solid spread of check size. They've invested in a bunch of companies that you would have known for sure. Cloudbeds, which is hospitality software for property managers. UCAT Power, doing ultracapacitor based power, which we actually covered them recently. They're the ones that kind of spun out of Tesla acquired company. They took the tech that Tesla wasn't using. And they're an evo Nexus company too, right?

Yeah, they got their IP back.

Yeah, exactly. Vessel Health, which is a company I'm invested in, it's a wellness startup that kind of does health tracking at home. You pee on cards weekly to tell you how you're doing, vitamin levels and all these other things and take lessons. Which is a long time, kind of edtech company here in San Diego, downtown base. But they've had some huge exits. You want to take us through some of these exits they've had?

Yeah, and these are just a sample of their companies. They're in a number of other companies, but we're highlighting the San Diego ones. Eco ATM is a big one. Cross past One of the first EVO Nexus companies. So come full circle there. Etikogenome is another huge one that they've had and Daylight Solutions. So those are some of the big, the bigger exits they've had. So some success, you know, in the San Diego area. It's awesome to see.

Yeah, yeah. Congrats. More ventures on your next fund. Look forward to co invest with you on a number of things, which we are. We're looking at vessels next round. Speaking of fundings, we've got a few to mention. There's a few bad. There's a biotech one worth mentioning, Sydnexus, which is kind of eye health, nearsightedness. Biopharma raised 45 million. Series B Aquacycle, clean tech company. We love the team there. They're doing industrial wastewater treatment. So bolt on kit for at your plant, your coke bottling facility, your brewing facility to actually treat the wastewater and potentially reuse it. So they raised 10 million for good Ventures and the Roddenberry Foundation. And the last one's a cryptocurrency one on ramp invest, it's a cryptocurrency integration platform. Raised 6 million seed funding with some big names. Gemini Funds, one of the oldest crypto investment firms out of New York. Coinbase Ventures and Ritholtz Wealth Management. So kind of cool. Three very different companies who've got money. Shows the diversity of San Diego companies right now, that's for sure.

Wow. Yeah, it's crazy. Speaking of crypto, I was poking around recently. CoinMarketCap, 11,600 cryptocurrencies out there, 405 exchanges. This is heating up. So there's no. I'm no surprise that we're starting to get some, some crypto development in San Diego. I'd love to see more, but congrats on ramps. This is rad.

Yeah. The one crypto that I've been watching lately, Solana, I really wish was San Diego based. They're not San Diego based, but by name they should be. But Solana is an interesting one right now.

Yeah, hopefully you got in a little while ago, but they are going crazy. I kind of love the. I kind of like what they're doing.

Totally. Well, that's our show for the week, everyone. We got through pretty quick, but we appreciate you joining. If you're not listening live on Clubhouse, hope you're enjoying the podcast, but please do think about joining us Fridays at 12:30pm Pacific Time. Not Western time, as I recently said. But thanks so much and we will catch you next Friday. Thanks, Jonah.

You Got it. And don't forget, follow us on Twitter, social media, LinkedIn, and we'd love to chat with you there, too.

Yeah, good call. I'm at Neil Bloom and you're at Jonah Peak.

At Jonah Peak, that's right. Keep it simple.

Thanks, everyone.