San Diego Tech News Weekly – June 2, 2023

Foreign. Welcome to you all. It is Neil and Fred here. We are happy to be spending some time with you, Fred. It's good to see you.

Happy to be here. Thanks for having me, Neil.

Always, always. I'm Neil Bloom. I am a serial entrepreneur and investor. I run the Talkers and Tech Podcast, the Fresh Fruit Tech blog and Interlock Capital. And Fred and I have been collaborating a long time and, and I'm stoked to have you as a co host today, Fred, want to give your background? Yeah.

Happy to be here. 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 where I cover the ins and outs of the startup world for much of that time. Breaking news on IPOs, fundraising rounds and M and A activity. Happy to be here.

Well, let's dive right into it. It is already June and you know, that kind of starts making us feel like the year is halfway over, even though got another month, but it feels like it. And you know, we got some big, some big funding news on the tech side with Measurable, our longtime ESG friends, Matt, Lance and team raising a cool 30,93 million in funding for this next round. I'm sure you've been keeping track of Measurable for a while, right, Fred?

Yeah, I remember we covered them back when they were raising a series A, so it's amazing to see that they raised, was it 93 million Series D round, Is that correct?

Correct. Yep. Yeah. So Measurable is a is plate software platform for commercial real estate buildings to kind of get to know a real time dashboard of how's their building doing in terms of environmental, sustainable and government aspects. Esg, which when Matt started this by the way, which I think was over 10 or 15 years ago, it was very much not taken seriously. And luckily there's been some tailwinds behind them that, you know, in certain sectors, especially public markets, ESG has become a mandate for certain stock exchanges that you are tracking these things. And so that has helped them get more commercial buildings on and using the platform to see in real time how are we doing against these specific ESG metrics. So it's great to see them doing well. I man, my first memory of them was 2015. Eric Otterson and I put together a demo day, I think it was called Demo on the Docks at this, it was like Bubba's Shrimp Place down at the waterfront in downtown. And Lance and Matt, the two co founders, you know, had, I mean it looked like a two person startup as it did then and through their laptop plugged it into this to a, to a projector that we had in the middle of a restaurant and gave their talk, you know and it was scrappy two person startup. So it's pretty cool to see where they've gone now, that's for sure. They've got a really cool recruiting mechanism where they, they focus on recruiting water polo players from SDSU and ucsd. So a lot of local talent on the team there helping it grow. You've had any friends get recruited over to measurable Fred?

Yeah, I remember we covered that. That was a really cool story. I think Matt, he is both an alumni of UC San Diego and San Diego State where he got his mba. So just a cool story where it's a San Diego founder who has recruited other alums from the university. So it's a really cool story.

Yeah and making a big impact. So kudos to the team, keep doing great work. Let's talk about a little bit of the TJ tech boom that's going on. So you know while there's at big tech a lot of layoffs happening. There is a boom happening in south of the border in terms of where talent is focusing for a few reasons. One, companies are reducing costs so we can see that for sure. And south of the border you can get lower price labor but still high quality in regard. And so there's a number of. What I first noticed was software development agencies that have been growing right on the other side of the border. But now we're seeing hardware development agencies as well too. So TJ's background in electronics manufacturing is starting to also pull in hardware design as well too. So. So really cool to see the new story out by PBS that we'll link to in the show notes that is talking about the growth of some of these firms. Some of them we're talking about have 500 to a thousand engineers on staff who pretty much are an extension of the American team. They're considered kind of employees and doing real work. I'll give you one example. There's a company called Arcus Nexus. They've been around 20. We've hosted a lot of startup weeks actually at their place in TIJUANA they have 130 and software engineers on staff just for Drata, the cybersecurity unicorn. You know that's a lot of people building product south of the border just for a San Diego company. But what's cool is that they can come over to the office same day. Right. So if you have a team wide Meeting, want to do something in person, they do that or want to bring Drata down to Tijuana, that's happening as well too. So between arcis, Nexus, IT Juana, which actually does also software development but seems to be a different niche, they're doing more large tech in the biotech space. They've done software and data science work for Thermo Fisher and Insulet. So it's kind of cool to see each of these development shops carving out their niche and supporting the San Diego startup and tech community.

Yeah, Itiwana, I think the CEO or the founder of that company is named Maritza Deza and she worked for Thermo Fisher and helped them expand internationally to a third world country. And so she had the idea to help these companies in San Diego tap into Mexico's rich talent. And it's been amazing to see that organization grow. We covered them at the Business Journal and it was when they would just have this as an idea we wanted to create at Tijuana software scene. And you know, it's have grown to support some of the large companies here in San Diego, both life science and tech. And so I think everyone wins. People in Mexico can find jobs and you know, companies in San Diego can scale their solutions at more affordable prices.

Totally agree. Yeah. And on the hardware side, an interesting trend that's also happening is that with the federal government outlawing certain kind of manufacturing that has, you know, US trade secrets involved, they are outlying some of that manufacturing to be done in China which is making companies bring their manufacturing back over to stateside. But the design work I am seeing software like electronics and hardware design agencies who may have had a group in China looking to open shops in Tijuana now. So I have seen at least three development agencies open Tijuana offices and manufacturing and the same with some of our portfolio companies are doing the same. While they've had some China based manufacturing, they're now asking and looking hey, maybe we should have a presence in Mexico as well too. So that's a really interesting trend as well to watch. I think us as a region are just going to only boom and gain from that. Especially if it's anything military or defense related, which we already have such deep core industry in being able to build that here versus anything overseas is a big deal. Let's move over to more of a startup story. George Hotz, who is is a developer and entrepreneur who originally started Comma AI, a self driving aftermarket kit for cars, has started a new company called Tiny Corp. What do you know about Tiny Corp. Fred.

So I actually met the founder, George Hotz. He's an interesting guy. I met him at Techcon I think in 2019 before COVID there was this big conference here in San Diego where we're trying to bring Silicon Valley folks to see those real companies building in San Diego. And George Hotz is, he was doing a panel speaks with him, I think Waymo and another self driving startup, Too Simple. They're all on a panel together talking about the applications of AI and how it's going to change driving. And so I wrote about his company comma AI which had raised money from a 16Z Andreessen Horowitz which is unheard of. And he moved into San Diego. So he was like one of the few companies in San Diego has raised money from a Tier 1 VC firm at the time. And he's now started this new company with AI and he's raised 5.1 million to build a lofty AI project. I think TechCrunch covered them, but I'm not sure what they do. Neil, do you kind of have a scoop on what they do?

It's, it's way more AI focused in that regard. So originally his so comma was hardware meets software, you know, a series of sensors, an ability to you know, self drive your car. This is way more of I believe more on the large language model side of AI. But I think it's still really early days of what he is building there. In true George style, you know you can actually read about. He's kind of put out his, his own version of talking about the company. A little bit of a manifesto if you will on GitHub and so we'll link to it here of where you can find more info about them. But great to see another company going deep into the AI side. Cinema has got like a multi decade background in AI that we are going to have to do a whole kind of special series on. Fred by the way, because you know, just saying AI now encompasses so many different verticals but this is another great trend to see here. Another good founder and we actually did comma get acquired. I don't actually know what happened there in the end. Do you do you know, I think.

It'S still running but he is no longer you know, having his full time attention there. But yeah comma, I'm not sure if they got acquired but I think they're still, they're still running here in San Diego.

Cool. Well George and I have got, we're planning a date to get them on the Talking tech podcast coming up soon. So we will do a deeper dive on that, especially because I invested in a competitor to Comma AI about five years ago, so I'm interested to hear to talk to him about that. Spoiler alert. The company pivoted hard and resembles nothing like comma whatsoever. So anyway, more to come from that actually. Real quick, speaking on the AI front, I know you're going to write an article about this, but me and two others in the community just recently, me and Arjun Bansal, deep AI builder who built and sold Nirvana Systems, an AI software engine to intel and Nick Edwards, deep in the biotech world. Three of us came together and did a small group of AI meets bio here in San Diego. It was our first event. We did it at Bluma's office in Encinitas. More showed up than RSVP, which was great. We had about 20 people in the room. Kind of really kept it small on purpose to just bring together some experts on just bio who are playing with AI, just AI who are playing with bio, and then some people who are doing both. So we really wanted to see what are people working on, who encompasses the space here in San Diego and what are people excited about. So first event really was a bit more of an intro, get a lay of the land and then even build out. Should we be doing this more often? Who else should be here? So I think we have our next event coming up end of June. We've committed at least to the once a month right now of getting this specific group together. Something that was interesting to me was how many recently exited founders were there who were working on something new and very excited to use new large language models as well as a bunch like there's four or five investors were part of that too. Investors turned entrepreneurs or vice versa. Entrepreneurs turned investors. So there was a really, really cool buzz between everyone saying, wow, look, first event, look who came up and showed up. So excited to do more of that. Love that. Thanks. Last bit of news here on the CPG side. Pureboost, which a few of us know and have tried. It is a clean energy formula designed by kind of a serial. A serial what I call them. CPG founder Sean Ross, one of the, one of the founders of this, he has created either for his own product line or for other people's product lines. I think over 20 different kind of wellness products that he's known for. So he's kind of a formulator, if you will. And he teamed up with a bunch of other co founders to create this. Fred, you just Read a great article article or wrote a great article on your SD founder substack about PureBoost. Give us, give us the scoop.

Yeah, so, so Pure Boost is basically getting in the clean energy space. We all know the monsters, the rock stars. Now there's the new players. Celsius. These are canned energy drinks that you buy at the gas station or convenience store. So pure abuse. What they do is they created a packet that you can pour into your water, fizz it up and then it gives you clean energy. It doesn't have sucrose, it doesn't have sugar, it doesn't have all that stuff that you can't pronounce that preserve the drink. So they're really taking a clean approach and they target women, working families and you know, people who are, who historically have been overlooked because these other energy drink companies target gym goers or mainly male dominated demographics. And so they started on Amazon and it's really taken off. They're doing 21 million in annual revenue. They're projecting that to grow to 100 million in the next five years. And they just had a successful Kickstarter campaign. They raised $2.8 million from over 500 individual investors. These can be customers, these can be people from around the US that have saw the vision of peerboost and they want to be an investor. And so it's really cool to talk to one of the founders. His name is Brian and there's four co founders and they're all veterans have built successful companies in San Diego and it's going to be a company to watch over the next few years.

I'm excited to see it as well too. Yeah, you got a group of people, group of founders who are deep in the industry, from the sports and CPG industry. So keep an eye on them for sure. Congrats to the Purboost team. We got a number of events coming up depending upon we'll get this out live in time. First Mondays is coming up the first Monday of June with Startup San Diego. As of Thursday June 1st, they already had 250 tickets sold. So this is going to be a huge event for First Mondays. I don't know if I've ever seen one larger than 100 or 150. This is, got an AI focused panel on it and it's being held at Lab Fellows space in Torrey Pines. So really cool to see one of our local startups being able to host this group there. So if you see this in time, come on out to first Mondays June 5th, Monday night in Torrey Pines two days later. We've got the founders hike that I lead first Wednesday of each month going up Torrey Pines. So June 7th, Wednesday, 6:30 in the morning, bright and early, come do a hike with us and we'll have a good time. It'll be nice and light out compared to the last few months, that's for sure. And lastly, Evo Nexus demo day, the end of the month is coming up and it's great to see Evo Nexus bringing that back. They haven't done a demo day I don't think since, since COVID So it'll be great to see what companies are in Evo Nexus right now, which is our local incubator. But we over skipped one over one other event that that happens in June. The Summer Social by Connect will be happening June 13th. June 13th. Thank you. I'm sure you'll be at that as well.

Yeah, I have people ping me, hey, are you going to Summer social? So I think that's going to be a sold out event from entrepreneurs, investors, some of the cool companies there. I'll definitely be there.

I think it'll be a huge event. Yeah, in the past pre Covid it was, it was already a like 500 person event. So I expect it to be really big which is why they, they moved it to a bigger venue up in Encinitas. So. And I don't mind it being up in north county. So yeah, lots going on in June. So excited to see you in the flesh, Fred. The good to see in person and we'll do another one of these soon too because we know that there'll be some other news coming up shortly. Yeah, I can't wait.

It's a lot of great things happening and it's summertime here in San Diego.

Very exciting. Well keep track of events that are happening and other news on freshbrewtech.com and if you want in depth dives into founders and new tech that is coming out, check out Fred's SD Founders substack. You can subscribe to both. We'll link to both in the show notes here. Thank you all for tuning in and we'll talk to you again soon. Cheers.

Cheers.