San Diego Tech News Weekly – November 5, 2021

Yeah. Hello, hello.

Happy Friday.

Heck yeah. Hello. You guys can't see this necessarily. Neil's head to toe. I'm sure he's wearing the loyal socks too. But we're stoked on the loyal. Go, go, San Diego loyal. We got soccer now. We're stoked. We're excited about it.

Yeah, definitely. It is. It is Friday where we are. You could be in the future or the past, wherever you are listening to this and so don't tell us who won. No spoilers.

Fair.

But this is Neil Bloom here from Fresh Brew Tech and Interlock Capital. Community builder, entrepreneur, investor, and joined by my friend Jonah Peake.

Sup everybody. Jonah here building some marketplaces. Got some interesting news on lime recently. If you do the Google, I'll share some out later. And just loving San Diego tech. One thing that I just want to toss out there, we just love to do this live. If people want to join in and hang with us, that's awesome. But we also kick it out later in the week for those of you who are listening later. Hey, what's up friends of the future? But yeah, hell yeah, let's dive in. Let's talk about our five stories. We actually got one to start here. Super awesome. We love tusimple. You got something first?

No, go ahead.

Nice. Well, I know you love tusimple. We love tusimple. Super cool. Like the future of trucking robotics. This is headquartered here in San Diego and you keep talking about this, but they are getting closer and closer and closer to removing the human from the trucks. And I think that's super important for a number of reasons. We obviously have been talking about supply chain being constrained. We're talking about the fact that the, the truck driver populations aging out a little bit and so being able to sort of do some of these routes, you know, that are maybe not as desirable or more challenging to fill with their technology. I think that's super awesome. So what's actually coming out, what they're talking about now is running this route between Phoenix and Tucson, 80 miles, kind of low, quick jump there. And they're getting ready to pull the driver completely out. But this does take some major tech upgrades. You know, they have to obviously, you know, do some sub grubs where it's upgrades with software, hardware. But you know, you may, you may think about it. Oh cool. Like you just set up your truck. I was going to say monster truck, but yeah, pretty much is as sort of an RC car, right. You just put a remote control there. But the thing is they're planning for the unknown in addition to the known. Right. And so, you know, what happens when, you know, we have changes in the road conditions? What happens if there's unplanned hazards? What happens if there's erratic human drive Drivers, These are things that, you know, are pretty, pretty common. And what's really, really interesting about this move is they're the, if they pull this off, when they pull this off, they will be the leaders. So they are ahead of a couple of others. So Kodiak Robotics is trying to do this type of driverless route, but they're only doing this in a closed track. They're running a pilot maybe, you know, now, but they're not on open roads like our friends at Tusimple Embark, which another Southern California company doing something similar is planning to run a pilot 2023. So coming up and then, you know, but not, not, not here yet. So, you know, they're, they're in the lead. I think it's called Ian Ride. Ian Ride. I'm probably saying that incorrectly. They're from Europe, they landed in the U.S. they're also doing testing, but only on a closed track. So they can't, they're not doing this, this the same thing. So yeah, the two simples cruising along. Very exciting stuff from them. I like, I like that. And so a few Numbers, you know, Q3, they spent 85 million on R&D, that's up 24 million. The revenue is up a little bit. But again, you know, like tech companies, this seems to be maybe a little bit more like a Biotech Neil here, 1.8 million. So they're really spending on R and.

D, but especially when their market cap, their market cap is just under 8 billion right now to, you know, to justify almost 2 million revenue. Yeah. Think of them as a deep tech. Still not about revenue right now for them, you know, the big numbers is the miles driven. It's not necessarily like road time. It is sensor data and AIML time that gets to put the vision system through the paces and the decision learning trees through the paces. So 945,000 miles driven, semi or full autonomous trucks, up from 880,000 in Q2. So we're going to hit that million million mile a quarter mark soon.

It's amazing.

Probably in Q4 and like you said, they're on real miles. Right. It's not on a track. So this is pretty cool to be watching them. Yeah. Owning a little stock of them. I bought a few shares when they first look and they're kind of down and I Want to buy some more because you know these guys are out ahead and leading the pack.

Leading the pack. I think it's, I think this is an interesting distinction and I don't know if they've come out with this, but you kind of have to wonder, you know they want to get a whole ton of trucks on the road and they want to do a bunch of these routes and deliver a lot of merchandise. But you know what, they're, they're going to have some serious data on autonomous operations that might be another revenue source for them. I mean like you said, a million miles in one quarter. I mean they're going to know a hell of a lot and they might be able to, to sell some of that tech or at least those learnings to other companies trying to do some autonomous operations. So it's kind of, you know, there's some interesting stuff going on there. So I love it. I really like what I'm seeing.

Yeah, very cool tech and cool to be doing it here in San Diego. I know they've got a UTC presence so congrats. Too simple. Public company, one of our few public tech companies, IPOs this year. Speaking of fundings, we don't always dive into it here because we like to talk big tech but there's some massive fundings that happened just in the last few weeks. Another week, another multi hundred million dollar funding round by companies. We don't have confirm confirmation that these are unicorns in themselves. But we should, we should get back to you on that because we've, we've got a live, we have plenty of big.

We got it.

We got a live unicorn watcher all full time with binoculars out scoping for the next unicorn. We've had a one per week in October, expecting the same in November. But Bio Link, which is a company that should be after your, your diabetic heart. Jonah raised a hundred million dollars to build the perfect most smallest glucose sensor. Non invasive is their big goal. Non needle based.

Yeah.

And actually go back a ways with Josh and Jared, the co founders of this company. They were UCSD PhDs. We met in 2013 when we both had companies in Evo Nexus. Nice. At the same time. They were called Electrozyme back then. They had a big rebrand to Biolink.

A few years later.

Yeah. And what we all were doing as evo Nexus companies was we were putting time on a recumbent bike in their office and they would put a bunch of sensors and these patches on us to determine if they could get our glucose level from our sweat that's what I think their initial PhD project was. And they've obviously had continuing developments successfully because you know, this new hundred million dollar funding has really shown from some early feasibility studies that this device can actually track glucose levels and other biomarkers continuously for up to one week without the use of a needle based applicator.

Yeah, let me give some context on why that matters. So the typical system though, getting better still. What it does is it has basically a needle that, that has a sensor wire sort of embedded in it, think hollow needle. And what it does is it goes under the skin and then it leaves behind the wire so the needle comes out. So you're still kind of puncturing the skin, you're still, you know, it's discomfort, you get used to it. But at the same time it is, it's not this sort of non needle based or sort of non invasive patch that it sounds like they're coming after, which sounds pretty sweet. So if they're able to pull that off, you know, looking forward to, to testing that tech.

Yeah, super exciting patch is going to even have its own screen on it.

No way.

Yep. And Josh and Jared, both co founders, have at one point held CEO stints but they brought in a new CEO about a year ago, Richard Yang, previously at Dexcom and Medtronic. So some pretty big industry expertise. And now with this new fresh 100 mil of cash, they are growing. So congrats to the Biling team. Another company that just had a big raise, I think they just announced the same day this week Cloudbeds, $150 million raise for hotel tech, travel tech company. Adam and Rich, co founders of this company, raised money with SoftBank. And what's kind of surprising about this is travel has got to have been completely upside down during the pandemic. This is a trillion dollar industry by the way. And demand is already now for travel is already is already at levels above 2019 for just travel and the demand for the tech around it as well too. And luckily Cloudbuzz is one of the few that prospered. They created this software for small hotels, you know, for inventory management, cleaning management, kind of running kind of the whole operation behind the scenes for most of your hotels which are mostly small. They've now raised 250 million in total funding. Quite the war chest. And it's gotten them pretty far. 22,000 customers in 150 countries.

It's massive.

Cloudbuds is, I know they're little, not little, they're bankers, Hill based but obviously global team and operations and they took money from SoftBank, also the global giant vision fund that's been funding tons of companies. You know them from some big names like Uber and WeWork, but they have actually funded eight companies in San Diego to date. BrainCorp, Flock Freight, Accel Robotics, Cloudbeds, Vuori, WilIOT, Vividian Therapeutics and Netradine. A lot that we have talked about on this podcast and clubhouse before, so you may recognize some of these names. So SoftBank's liking what they're seeing here in town. Doling out 100 millis left and right.

Wow. I like it. Keep on coming in. We got plenty more companies that need funding that money to keep that money from the angels and the early stage investors in San Diego. I know SoftBank's global, but let's help these companies succeed. That's amazing.

Yeah, absolutely. Just a note, I don't have the official. We should be tracking weekly stats now on VC funding just because so much hot is week by week. But in the show notes of this and in last week's episode, we talked about kind of the Q3 report. In it we saw that six companies had 100 million or more round raises. We had two in a week. Plus we've had a lot in October from Vuori, uh, and a few others. So we're gonna, we're gonna blow that number out of the water. I know for Q4 already. So, yeah, Q4 report coming at the end of the month, end of the quarter. Plus a big graphic visually made that's on LinkedIn and in the show notes of this show.

Yeah, yeah. And then Neil's post this on, on Twitter as well. And fresh for tech, you can find it there too. So you can kind of keep track of some of these, these updates in the Q3 report.

But fundings are one thing. Funding is really just help us build companies which help us create jobs. And that means, honestly, most of the people in San Diego who have jobs have big needs on running their household, living and working every day. That comes from civic tech, that comes from government investing in our community. Which leads us to our next story here, how San Diego gets drinking water from the ocean. This is a really big deal for San Diego. We are so dependent on some really scarce resources right now. The Sacramento River Delta, which needs, you know, rain and snowfall up in the Sierras and the Colorado river. But. And that water travels hundreds, if not thousands of miles. It would be amazing if we could be totally dependent on ourselves, a seaside community with some great coastline.

Yeah.

So take us through a little bit about what we've been doing with desalination here.

Yeah, this is cool. I. It's funny, it's a kind of start to think about desal. It's obviously a really amazing piece of technology. It's super important. But I kind of like to think about it like that early wave of flat screen TVs. When you look at it, you're like, damn, that's expensive. But you kind of need that first wave to be purchased and kind of bring the technology and the demand down. So it kind of feels a little bit like we're at that phase. You know, if you look at the numbers, it's not obscenely expensive, but it definitely isn't economical quite yet. But if you look at kind of where San Diego gets its water, obviously we've had some rainfall, but we don't have the infrastructure to capture it. So oftentimes it just goes right into the ocean. But basically our river is coming from the Colorado river through the Coachella canals, like around 19%, maybe a little less. The Imperial Irrigation District transfer, Colorado river again, but a different Avenue, that's 31%, so a bit higher. And then Metropolitan water district, that's Rockies and Sierra, as you were saying, 18%. Desalinization is really only 8%. So kind of a smaller number of our water is coming from desalination. So this facility, this is a Carlsbad Desal plant, a billion dollar facility in North County. It's opened in 2015, but it's basically adding 50 million gallons of fresh drinking water per day, which sounds like a lot. And if you really think about desal, it's kind of funny, it feels really complex, but we really just need to understand what goes on behind the scenes. It's kind of in two sort of major steps, right? We've got this Mega Brita filter which we all know to, to kind of remove a bunch of the sort of the main stuff, the bigger things, the particles, the algae. And then you have a winding maze of pipes and, and other tubes that basically is removing everything that's left, which is mainly, you know, salt and a few other things. And so then we send it through reverse osmosis, pull out the last bits of, of items. That's essentially a semi permeable membrane. If you're a forgetting what osmosis is, reverse osmosis just use some pressure to force water through these tubes. And now we have pure drinking water. So the end product is basically, you know, costing the city on average about $5 per month. So, you know, I think that you Know, side by side with current water prices, probably pretty high. But, you know, $5. Isn't all that, all that bad to try to really start rolling out technology right like this and really drought proofing our region. They say ocean is drought proof, which is just true. I mean, we're not going to lose our ocean level if it doesn't rain. But it is just sitting there. So it is a nice, nice way to get some drinking water. You know, it's not perfect necessarily. There are some risks. There's a byproduct, obviously you're pulling a bunch of salt out so you have this sort of what they say is toxic brine. I didn't go too deep into what they mean by toxic, but I think what it means is, you know, the salt level is significantly higher and that that can impact wildlife in the area where it kind of gets put back out into the ocean if that's how, uh, it's, you know, where it's getting sent. But again, that, that's something to be aware of. There's obviously water intake, so that's super important. Where's that coming from? Are there creatures in that area? And then the last piece is there's some energy required. So where's that energy come from? If we're desalinating water with coal, that's bad. If we're using solar, that's, that's better. And so there's a few factors to kind of keep in mind. Yeah.

I mean, first.

Thank you.

Science by Jonah. And funny enough, I actually wrote a senior thesis when I was a young UCSD mechanical engineer on building a diesel plant at the San Onofre Station and using nuclear power to power diesel. So this kind of brings back both some scary memories and like, you know, hey, look, we kind of did it even though we shut down the nuclear power. But yeah. And actually the Carlsbad plant where they built it on was a former power plant. So they used some infrastructure there. I believe, if you remember that giant smokestack that you'd see off of the Carlsbad Agua Hation Lagoon that has now been taken down and it's now the, yeah, this decel plant. But some of the things that it's so hard to stack up, the costs of infrastructure. Like if you were to look at the thousands of miles of canals and pipeway to rebuild, some of that stuff got to be in the billions compared to putting something right by the water.

Right.

But in the short term, all most people see is oh my, my bill increased. Therefore it's Too expensive, not worthwhile. But yeah, it's hard to stack up the cost of over time, 20, 30, 40 years of infrastructure repair and that kind of thing.

Well, one thing to keep in mind too, I think we talked about this in a previous podcast, but, you know, water is going to get more competitive and we need to be independent. I mean, there's already regulations going to place that water from the Great Lakes can't leave the region. You know, and it's not that we want to pipe it out this way, but it shows you that as water gets to be higher in demand, we're going to need to think about where it comes from. And we're, you know, we're lucky that we're lucky to have all this beautiful sun, but not a lot of rain here. So we need to, we need to fill up our pipes at some point.

Yeah, no, very cool, very cool to see us leading the way in water independence. Another thing that just like water as a necessity in San Diego. So is our largest company by market cap. Qualcomm can't have a show without talking about what Qualcomm's up to. Big tech, the biggest tech here and impacting all of us from our smartphones and now devices and everything else you can think of. There's been this macro level conversation about supply chain issues within cars and everything else because of chip shortages. And we've got a whole host of reasons because, not just Covid, but the transportation of supplies from overseas and just being stuck out at sea in Long Beach. Actually, speaking of which, there's some great Twitter conversations by the Flexport CEO about what's actually happening in Long Beach.

I don't know if anyone's seen that.

But really cool and interesting to see what's impacted supply chains here.

Yeah, I was going to say he brought them all tacos and set up a taco truck at the port there to sort of get some inside perspective. I think that's a really good lesson just for anybody who's building a company to get out there and talk to your customers, give them tacos, they'll give you all the information you need.

Yeah. And so what Qualcomm specifically is impacted with is around these chip shortages and chip supply chain issues. Qualcomm showed in their earnings that they've avoided that. Luckily they've got some resilient supply chains, better than expected Q4 earnings led by high end Android devices. So laptops, drones and cars, things going into that. And so they're using a dual source technique. So this allows you to kind of diversify your supply chain lowers the risk. Sole source, obviously, you know, if you've got a great partner who can just pump out stuff, great. But the diversity of your supply chain obviously is shown to be very important because you never know what could impact a company from oil spills, pandemic weather, material shortage, politics in a region and just leverage from the supplier itself. But sure, there's risks there of having multiple suppliers because you're not going all in on them. Are they going to really place the bets that what it takes to scale up and be consistent? And are they going to share your IP with others? So Qualcomm's been successful so far. They're still running a limited supply, but they're planning to be ahead of what they thought was going to be impacted. They showed 9.3 billion in revenue this quarter, up 43% from last quarter. Got to imagine that's from 5G handsets just rolling out. Especially Apple announcing that in Q3. I saw personally both, I think I've ordered a laptop and a phone and it's here within two days on a plane from Shanghai to San Diego. So not having too many issues with tankers when you, when you just ship air like that.

Oh my gosh, it's so expensive. I don't have the numbers ahead of me, but I remember we were trying to work on the supply chain for scooters and we. I can't remember exactly what we needed. Something simple to fix a whole bunch of our fleet. It was like the truck takes a week, air takes a day, and it's like 5 to 10x the cost. So you're like, man, this dollar part is now going to get really expensive, so we better take really good care of it so that it's, it's pretty, it can be pretty brutal.

Yeah, I mean, this is super important for Qualcomm right now who, who are diversified in their product offering. They're trying to not only be in phones. Right. They're trying to be in Iot of everything, whether it's trucks and cars and, you know, even health, health monitoring to VR headsets and everything else too. So they need to be able to say to brand new suppliers, you know, final finished product makers who are trusting on them to say, yeah, well, we'll take a lean on Qualcomm putting some devices in cars now. Well, Qualcomm needs to be able to show up and it looks like they are. So that is proving to do well for them.

Well, they don't want to miss out on the metaverse, let's be honest. So, yeah, if that's going to grow like it is, I think it makes a hell of a lot of sense to work into that world. The VR cockpits of cars, Iot, I mean, they're, they're positioned pretty well. We know this. They're big. They know what they're doing. But thought it was, it was pretty cool that we talked about supply chain a little bit from a different angle.

Definitely. You know, listen to other podcasts and us talking about stocks a little bit. I think we might have to put in a little legal thing here that everything we're saying here is not financial advice. We may own some of these stocks, which, in fact, I'm big on owning all San Diego public stocks. But this is just for information and entertainment purposes only.

Do your own research.

Yeah, by listening to this podcast, I mean by investing in your community and investing in local San Diego companies. So with that, that is our show. We did mention We've got the Q3 Venture Report infographic up. It'll be in the show Notes for this podcast. It's up on LinkedIn and Twitter. Shoot us a note of what you want to see in it for the next quarter. We'll put different information in if we think there are other things in there, but we talk about funding rounds, IPOs, who got acquired, what new venture funds actually popped up, and what companies opened an office in San Diego from outside. So give us a look@freshbrewtech.com and go loyal. Big day for the San Diego Loyal playoffs, their first playoff game. We would love to see a win here to prove that it was a great season coming from the pandemic ashes.

Let's do it. All the goals. Score all the goals. And find us on Twitter. Share stories you like with us. If you see things in the community, on the tech stories or things that you like, you know, tag us, tag me, tag Neil. And we'd love to have a conversation about it. Yeah.

Thanks for joining us on Clubhouse every week, 12:30pm Pacific Time, and on the Tacos and Tech Podcast Network. Thanks, everyone.

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