San Diego Tech News Weekly – June 23rd, 2023

Foreign hello everyone, this is Neil Bloom here, Fred Greer joining as well. My co host, my name is Neil. I run Fresh Brew Tech, which is a tech news platform. And the Talking Tech podcast which you're listening to this on, and an investment fund called Interlock Capital where we invest in early stage startups, mostly software with a little bit of hardware. And my co host is Fred. Hey, Fred. Hello.

Hello. I'm Fred Greer, journalist and author of SD Founders Substack. I wrote about the tech industry for the San Diego Business Journal for about two years, covering the ins and outs of the startup world. Much of that time breaking news on IPOs, fundraising rounds and M and A activity. So happy to be here.

We love having you here. It's hard to get away from startup news, but we got, we got all everything, not just startup. We like to talk about big tech, public and private. And one of our first stories is about a public company named Beam Global, a sustainability tech company, if you will. They're in the solar space. They design a whole system to like a mobile system to charge your car in place. So drive up into a parking lot. Sitting above the spot is a solar kind of solar panels big enough that cover the whole spot. So your actual car is in shade, you plug right into it and you're juicing up your car. And so they've got direct to consumer and heavily they sell to other businesses who plug in a bunch of these in their parking lots. I know you've covered them for a while. What do you know about Beam here, Fred?

So Beam is one of the older players in the space. I actually did a piece in 2021 on the EV scene. As you know, San Diego was very popular. There's a lot of Tesla owners here in San Diego and there's a number of San Diego based electric vehicle companies and Beam is one of the leaders in the space and they work a lot with California government. They get grants and funding. And I think the news that the Union Tribune covered was they acquired a company outside of California.

Yeah, they are acquiring Amiga, which does specialized structures and equipment for kind of like streetlights, communication and energy infrastructure. So they're getting more into the structural elements here to it looks like to be able to put their solar in other areas. So not just say over the parking lot parking spot, but other structures are around there, which is great because pretty much what we know about the EV infrastructure is that if we really want to go full electric, pretty much everything and everywhere has to become a gas station, if you will. No longer are you going to go to your gas station everywhere you park has to be able to, you know, fill you up. And it looks like Beam is taking advantage of that by enabling, you know, more places to have this opportunity to power up your car with sustainable solar on top of it as well. So congrats to Beam on growing. And it looks like their stock popped because of that, which makes sense in that regard. And I believe some local investors were, some of the original investors way back, like Kesha Ventures, I believe, were a funder of this company before they went public. So good to also see that a local company so getting funded by local capital because we know that that capital gets recycled locally back into the community as well too.

Totally. Yeah. It's a company to watch. They were founded in 2006 and I think they have over 80 employees in San Diego and Miramar. So definitely look out for them and it's good to see them continue to grow.

Yeah, definitely. Something I always like to keep track of is also market cap of some of these public companies. $114 million market cap. Gotta imagine that's a little depressed compared to where the company's at as the stock market is these days. But you know something, we actually have a public company stock spreadsheet available for others to check out. We'll make sure we put that spreadsheet linked in the show notes for others to keep track of as well, too. Okay, well, another area, another strength area of San Diego is the biotech, specifically on the therapeutic side. And a hot company just came out of stealth mode with the announcement of a very large seed round, if you will. And it's not an AI company, it's a therapeutics company. You know, that's San Diego's other hot area, which is Kate Therapeutics coming out of stealth Mode, raising a $51 million round. Repeat founders here who've been in the space for a while. You catch the news of that this week here, Fred.

Yeah, great piece by Mike Freeman, Union Tribune. I thought one thing that was interesting was they're trying to solve something with around muscle and heart diseases. And they raised funding from Westlake Village Bio Partners and a few others. And this is a large round for a biotech company. So I think investors are seeing that they have something that other, other companies don't and they're doubling down on them. So definitely an interesting company coming out of stealth and not surprising to see veteran biotech founders tackling this problem.

Yep, absolutely. So we'll keep track of them. I'm sure this won't be their Last raise, that's for sure. But speaking of raise, you know, this year is, it's been a tougher year than most for funding though. You know, it's also because we have pretty short memories in, in general as humans. The last few years were pretty great and so anything below that feels not as great. But you know, we're, we're actually still doing from three years ago, we're still doing pretty well on a funding piece. But there was a good story out this week talking about what's it like for a founder out there raising. Another good Mike Freeman story here, Fred.

Yeah, yeah, I actually enjoyed that one. And he talked to someone that I know as well as the founder, co founder of Mosaic Tech who just raised secrecy funding and the article was really talking about how fundraising has slowed for early stage companies. And so they talked to Mosaic Tech, who is one of the few handful of companies that have raised funding in the last quarter. There's a few other ones that come to mind. Blinking Neil, the one with AI and marketing, what company was that?

The AI marketing company that just raised recently.

Yes.

Escape me as well too.

Sochi.

Sochi. Yeah. Yeah. Sochi raised a hot like 100 million plus round a month or two ago to add in GPT GPT style content creation into their platform and that was like a series D or E round for them.

And then we had measure, we had fabric eight labs and measurable. So there's only been a few software tech companies have raised funding. So Mike Freeman wanted to get perspective on what was happening. So you also talked to Evo Nexus co founder, which is accelerator here in San Diego, just to get the perspective on what's happening. And you know, it just has slowed down. Investors are asking harder questions and they're not just writing checks off an idea. You need to show more than that.

Yeah. And I think San Diego is actually pretty well suited for this. We've always had to get our companies operating and performing better than your typical SF company. I would say pre Covid it was hard for us to get on the radar and get trust for our first rounds because we didn't usually have relationships with the VCs, so we had to get our companies up and running, getting into revenue to prove that there's validation of our idea, which isn't always the case at the early stages. But now at the later stages this is where like a Mosaic Series C, it's also, you know, having to continue to prove yourself that you've got basic business fundamentals and maybe even showing profitability or at least ebitda which you know, we have not. That's not been a. Something that VCs have been looking at over the last few years. Pre Covid I will say at the early stages for me as an investor, like we're writing checks like we just did a series a follow on for a portfolio company and we, but we brought in a bunch of new investors into our syndicate and we've got two hot deals right now that racing to, to get into that are oversubscribed that you know I've been watching and get excited to bring to the Interlock community if we can get in in time. So we're very excited to be writing checks. But you do see that you're holding your hands longer at times or I'm saying, waiting around saying hmm, maybe I'm going to wait for that repeat founder instead of the first time founder. You know this there's, I definitely feel that like this is, you know, should, should wait a little bit or take a little bit more time to, to write that check. So yes, I get what the founders and entrepreneurs are going through right now. It is a tougher environment. I'm, I'm expecting lower valuations because my peers are right. There's kind of this market sentiment that says well we should, they should, they shouldn't be raising at that valuation. Oh okay, well then let's all just, let's lower our expectation or our number there. So it's different than it was over the last two, three years And I think change is hard for everyone, that's for sure. But good founders, good teams, have complimentary skill sets, know the industry that they're going into, spent the time really getting to know the customer's problems and are solving it. Solving the problems and not the other way around, are getting funded right now. So you know we, Fred and I were, we're going to crunch the numbers. Probably by the end of next week it'll be the end of Q2. We'll do a Q2 wrap up of how is Q2 compared to Q1 and compared to the year before. So either next week or the week after we will have some, you know, some data, three months worth of data to share with you from that. You mentioned Evo Nexus. They are throwing their first demo day in a lot. It's been a long time since they have this coming Monday June 26th and I think there are already up to 500 tickets sold which is what that Qualcomm theater holds. So I know they're going to oversell just because we know that not everyone shows up. So you can still get tickets, but grab a ticket. It starts mid afternoon. I know both Fred and I are going to be there. I'm excited to see a lot of these Evo Nexus companies kind of in the flesh and presenting. It's not like a pitch day per se, it's more of a demo day. So it's like, here's what we're working on. So they're not necessarily saying, hey, we're pitching for money, but come on, all startups are kind of always pitching for money. But it's really more about seeing what's being built at Evo next. You got hardware, you got software, you got some digital health. So it should be fun event there on Monday.

Yeah, just to add on to that, I think that's going to be a really fun event. It's been for my knowledge, this hasn't happened in over three years. 2019 due to Covid. And so the venue is really nice. It's at Qualcomm. There's going to be a lot of startup folks, but then tech professionals, investors. You might meet your co founder there. This is kind of like the Y Combinator event for San Diego. Some cool companies that come out of Evo Nexus and has grown and scaled and so this is a good event to kind of see what companies are starting in the early days and you know, we'll, we'll bloom and grow to something bigger than that.

Yeah, definitely. An event that just happened that I threw with kind of co hosts Arjun Bonsal and Nick Edwards was a AI Bio San Diego group. We've been doing a little kind of invite only grouping of kind of the experts of who are at this nexus of AI and bio. So this was our second gathering we just hosted at this cool spot over in Del Mar called the Beach House. And we had about 20 people in attendance. We had two lightning talks. So Arjun Bonsal just came out of stealth of his AI agent tech called log 10. So we'll do a bigger coverage of that soon. But he gave us an overview of what log 10 is, which is a cool AI agent tool. And we had Atari Bio, which was just named the 2023 Cool Company. They gave a little overview of what they're building in kind of more the precision therapeutics meets AI space. It was pretty techy for me. It was pretty bio focused, like the proteomics aspect of biotech and how to utilize better stratification of trials from better data feeding into an AI model. So it was awesome. I love that we got those to happen. So we'll keep reporting to you on that. I'm also always looking for other little side groupings of AI clusters. So if there's, you know, AI for hardware or AI for SaaS, like if there's enough of a little bit of a density, I'm down to spin up little groups. So hit me up if you're listening and interested on that. And speaking of AI, there's an AI hackathon coming up by sdx, kind of a new organization that kind of spun up here locally that's got Keshe Ventures backing it and Qualcomm, it's on July 15th and 16th over at UCSD. And Keshe Ventures, if you know, is the same group that also helps spin up the Data Science alliance, non profit for, you know, talking about responsible data science and the Hallasiolou Data Science Institute at ucsd, all same groups. They got a venture fund, nonprofit. And UCSD Institute for Training up New Data Scientists are back in this hackathon, which is great to see. So I'm excited for that. Check out a link in the show notes if you'd like to join the hackathon. But next week, great event coming up by SD Tech Hub. Fred, you're now part of the Tech Hub. Tell us about the event that you're throwing.

Yeah, so before we get into the SD Tech Hub news, I want to just mention a quote came up in my mind. There's a guy named Chris Dixon, he's at a 16Z. He's a crypto investor. But he said this quote. He said what the smartest people do on the weekend is what everyone else will do during the week in 10 years. And so the hackathon and also this gathering you guys are doing with AI and bio, I mean, these are things that people are doing off the clock on the nights and the weekends. And I think it is the future. So it's great to see these people come together to work on new problems, especially with AI. There's a lot of opportunities there. It's just great to see. But yeah, just kind of piggyback off what you're saying. There's a job fair happening on June 27th. It's a partnership with San Diego Tech Hub, which I'm a board member of, also San Diego Workforce Partnership and the Supplier Councilor Diversity. They basically saw that there's thousands of folks have been laid off in San Diego. And so they're bringing in vendors and different companies from tech to, to finance, just different companies and allowing people to navigate and find career transitions during this challenging time. And so if you're looking for a job or know someone, please share this event. It's happening next Tuesday, June 27th.

Awesome. We've got the link to that in the show notes as well, too. Well, that wraps up another solid week. Thank you all for tuning in. And you can subscribe to these by, I think if you both follow Fred or I on LinkedIn or Twitter, if also, if you subscribe to the Tacos and Tech podcast, you'll get a notification when we launch when we put this out each week. And thank you for sharing this out as well, too, so that we make sure everyone is super informed on the events and the tech that's happening in San Diego and the builders that are making it happen. Thanks again, and thanks, Fred. We'll see you soon.

Thanks, Dale.

Cheers.