San Diego Tech News Weekly – May 12, 2023

Foreign this is Neil and Fred here. Happy Friday. If you're listening to this, it's Friday, May 12th for us. We will get this out live as soon as possible. Fred, how was your week?

It was great. Hello. Hello. I'm glad to be back on the SD tech news and it was a great week. You know, I think there's a lot of great news to talk about and you know, we one, I had a post on the Q1 funding and you know, the funding round so we can talk, talk about that. But I thought it was a great week. How about yours?

Yeah, it was a good busy week as well. He skips right over intros. Let's do it. I am Neil Bloom. I am with Fresh Brewed Tech, a tech media platform. We do events, podcasts, newsletters, blogs. Just make sure that everyone knows what's going on in San Diego. And I also have an investment fund, Interlock Capital, where we are as a group of hundreds of tech operators pooling our energy, time and expertise and capital to invest in great companies. And I'm honored to have Fred here. We've been collaborating for a while. Fred, thanks for joining us.

Of course. Yeah. So, Fred Greer, startup reporter in San Diego. I write about fast growing startups as well as some of the large companies here, Qualcomm and Illumina. Great to be here.

Great to have you. Well, let's dive right into the report that you published this week. We've been collaborating on venture capital data for years, you and I, and now trying to get to some consistency quarterly. So we pulled some crunch based data, some connect data. What was some of the first things that jumped out at you about Q1 Venture Capital Data too?

Yeah, so the biggest thing was, you know, a lot of media are talking about how it's a slowdown in venture capital funding nationwide. However, when I we crushed the numbers, we looked at, you know, different databases, you know, San Diego pulled in 1, 2 billion in funding.

Yeah, it's. Can you still hear me?

Yeah, it's kind of going in and out, but I can hear it.

Yeah. Yeah. You know, it actually is surprising because the numbers globally or yeah, maybe kind of the major venture markets were down like 50% in Q1. That said, even those numbers were a little biased by, you know, some big funding rounds that happen in Q1, including they consider Microsoft's $10 billion funding in OpenAI, you know, an investment. So that of that was a big number that affected globally. And Stripe also raised multiple billion dollars of funding in Q1, so that also those were Big enough numbers that globally it affected that. Yet still, it was still even with those big numbers it was still the global venture Capital was down 50% year over year in Q1. Now 2022 might have been another piece of that high watermark globally. And so maybe that's the same in San Diego that we saw. It's maybe a little bit of a lag or a high point. There were some big rounds that happened late Q4, Q1. So I think that's still a good sign that still a lot of capital coming to, to the region and that's. I think we can dive a little bit into that as well. Largely the capital that was raised came from out of town to San Diego companies. Right. Not a lot of local capital investing in local. Local companies. True.

That's, that's spot on. Yeah. So we had the major round was a company, a legacy biotech company which is investing 450 million into its bio biotech campus in Oceanside. And we had, you know, Sochi and Fabricate Labs equal atm. These are kind of like these later mature stage startups that have raised funding from, you know, outside VCs from San Francisco, Louisiana, New York, etc. And those are all $100 million plus rounds in the last quarter.

So that's a good sign. And the trend over the last 10 years have been, you know, more capital going to less number of companies and at the later of stages and I think that part will continue. You know, companies that do well are going to continue to get funded. I think the trend to look at this year is seeing how much of that would been later stage capital actually moving to earlier stage. So that's something that we're going to want to keep an eye on. It was mentioned at Interlock Summit by Dave Freeberg how he thinks a lot of VCs are kind of moving away from late stage companies, especially any of the unicorns that have lost a lot of their value thinking, you know, they're not going to recover from that. Let's go put a bunch of new seeds into new companies. So that'll be an interesting thing to, to see. I don't think we teased, I don't know if we saw enough of that data in this quarter yet.

Right, that's, that's true. One thing we did see some M and A activity, Prometheus Biosciences required for, you know, almost nearly 11 billion. NuVasive was purchased by Global Medical for 3.4 billion and, and Screwball Whiskey was acquired by I think the second largest Whiskey or alcohol maker. And so I'm curious if we'll see more consolidation or acquisitions over the next quarters as things slow down.

Yeah, agreed. Yeah, that is a, those are some big ones, especially those name brands in San Diego. NuVasive is a big player in the med device space, specifically in the spinal surgery space. So and Prometheus being an $11 billion acquis, people are, people are talking about that big time. So yeah, I think more will, more, more will come from that. That actually brings us to our next company which is that we wanted to mention. Are you ready to move on to viasat?

Let's do it.

Viasat, which actually has a pending merger happening and had a big deal of launching its Viasat 3 which is a major multi billion dollar satellite for them. So a lot of isat news. They are a communications company. They traditionally were building private communications work for defense, private marine. They even I think do the communications work on like Air Force One. But in the last few years have gotten into consumer communications work beaming Internet to planes into everyday households as well put them as a competitor to Starlink at this point a very different strategy. Starlink has I think close to 3,000, if not 3,500 satellites in this, in space as a constellation. So one they can hover over a smaller area, but also for redundancy as satellites just fail. They've got a ton more in space whereas viasat can cover a similar area with one satellite. So, so they've got one satellite per continent, which is why these are such big deals to get them off the ground. So Viasat 3 launched successfully within the last week. It probably will take months still to kind of get it into final position and start actually getting turned on and all that kind of stuff. But great to see and that was a long delayed flight launch. Great to see it finally up in space and supporting its coverage.

Yeah. Another thing I would just add is that ViaSat employees link over 5,000 employees. So they're a large employer in San Diego. So it's to see this acquisition news and you know, they're competing at a time where, you know, space industry is really hot. SpaceX is launching things every, every year and I think Amazon is also in the space too, so. So it's an interesting space. Neil, you there?

Yeah, sorry, some audio issues here on my end. Yep, hear me now? Yes, I can. Okay, I, I got cut off there at the end of your sentence there. Sorry. The viasat though does have a big pending merger that is approved in the US with another giant satellite telecom communications Company called Inmarsat. I think it's like a seven billion dollar acquisition or merger. So if approved, which it sounds like it cleared the gate in the uk, it could become a much larger company as well. So more to come from viasat in terms of where it sits in the world and in space based on where how big of a company it could be coming up soon.

Totally.

There's some events coming up that are worth noting. Connect has a few. The big public one is Summer Social in June. I just picked up my tickets. I hope I'll see you there, Fred. It should be pretty massive event, hundreds of people for their Summer Social. I know it's in Encinitas this year. It used to be in La Jolla Pre Covid, so they've moved it up north a little bit. But before then there's a VC gathering happening by Connect that is private but is a way to kind of unroll the cool companies that have just been named in late April to about 100 VC funds. So it's just funds only. I don't even think it's direct individual angels. They're just focused on getting companies who are Series A ready get in front front of funds who could be helpful to funding them. So looking forward to that at Petco park in the next week. I've already been hit up by a ton of VCs who are coming to town saying, hey, want to make sure we meet up while we're there. And that's so Mike Kren and Connect do a great job of just getting the outside VC community to just get exposed to San Diego. I know the LA and SF teams love to come down for the day. It's not a hard sell and just meet a ton, a ton of teams and many will probably be back for the Summer Social as well. Especially anyone who's in driving distance away as well too. So I'm looking forward to meeting a lot of the cool companies in person. I think we've got two of the companies in our portfolio and now I get to meet more and maybe it's a future investment opportunity in meeting a bunch of the new companies who are ready for the next round of funding.

Yeah, shout out to Mike Corinne for getting the VCs outside of San Diego here to understand there's real companies here that are building and you know, I think it just elevates the ecosystem. Another event that I'm kind of looking at. Someone sent me a DM on Twitter asking is there any Tech A Week Tech Week events planned? And LA Tech Week is happening the first week of June. So if you're in the area, I plan on maybe attending that. But there's, you know, also some cool events happening, you know, both in San Diego and in la, which I think will bring out a lot of, you know, startup founders and investors. Great networking opportunity.

Yeah, you're right. LA Tech Week is coming up. I am also planning to be in the LA area for some of those too, so those are good as well. There's also the CTO talks is coming up and they they've started put on a monthly CTO talks event. I try to remember where it's being held, but if you look up CTO talks, you will find a monthly talk by a cto. And then the the original founders of the Ethereum meetup are working on some AI events coming up. So hopefully not bursting any bubbles, but there is an AI hackathon being talked about and planned for June as well. So keep an eye out for those events. A lot going on and we appreciate you guys listening in. If you have events that you'd like for us to share, please send them our way. @freshbrewedtech.com you can reply to our newsletter and it goes to the whole team, which you can sign up for on our website or shoot, you know, me or Fred, a DM on LinkedIn or Twitter. And we'd love to get you plugged in as well too. So have a great weekend, Fred. Enjoy.

It's been a pleasure. Yeah, thanks for having me on and look forward to the next one.

All right, thanks everyone. Take care. Talk soon. Bye.