San Diego Tech News Weekly – October 22, 2021

High tech process that you love to see and you know, with a bunch of startup guys putting together a podcast.

Yes, we are.

Welcome everyone. Happy Friday to this week in San Diego Tech. I'm Neil Bloom from Fresh Fruit Tech Tacos and Tech Interlock Capital. All the other things that you do or do not know me about. This is enough for me to know me that I'm a guy on Clubhouse with two good friends including Jonah.

What's up?

Thanks, Neil.

Also guy in Clubhouse doing some past experience in operations, building marketplaces, playing in the crypto space. Loving Fred's latest post and I hope you dig a little bit deeper into crypto, Fred. So I'll kick it on over to you.

Thank you, man. Yeah, honored to be here. I am the tech journalist in San Diego, Fred Greer. I write about startups in San Diego and some write about some of the largest companies here in San Diego and it's an honor to be here.

Awesome. Well, let's jump in. Our format is diving into bigger tech stories. Usually it's not all about startups in San Diego. There's some big tech things that we always want to talk about and part of that is also life sciences, which we collectively us, all of us here as a room. My ask to you is stop talking about it as two different worlds. Biotech is tech and San Diego will be even further on the map when we talk about them in one sentence. So with that this first story, San Diego scientists are working on a vaccine, one vaccine to rule them all against coronaviruses. This is an interesting one. Scientists at the La Jolla Institute for immunology won a $2.6 million grant, should last about five years, to develop a shot against all coronaviruses. So not just COVID 19, we're talking Covid 1 through Covid infinity, apparently. Jonah, take us away with a little science by Jonah and what this all means. No.

Awesome. Great. Tee up. No. So one thing to think about, and I think some of us, we're obviously so sick of coronavirus, but we forget is that COVID 19 is just one of many. SARS was MERS, COVID 19, obviously. And there will be more potentially. But this funding, we're happy to have this funding. It came from the National Institute of Health and the goal is basically to ward off future pandemics. Anything that really is originated from the coronavirus line.

Basically.

This is really complex. What they're trying to do is find something along the surface of the virus. We've all seen kind of the spiky ball that doesn't change. Apparently when they evolve or change, the surface changes. That's why it gets really tricky for us to find those spike proteins. We need to basically train our immune system to look for something. Well, when it changes, the body doesn't know what to look for. Even slight changes can impact really everything. From a Vermont guy over here, think about it as snowflake. They're all very different, but they're all similar in many ways too. But what they're actually hoping to really drill down on a little bit deeper here is a little bit more detail, like how many doses do people actually need? That's something that seems to be debated in the news. How far apart do the vaccines need to be administered? Do they use RNA like Pfizer Moderna or some other method? And there's a ton of people attacking this goal. We're happy to have a team in San Diego working on it. We hope that our San Diegan scientists are the ones that break through here. But I just hope that anyone really gets to the bottom of this so we can get out of here and then hopefully, Neil, Fred, we're sitting in the same room recording this someday. So looking forward to that day. But until then, good luck. San Diego, La Jolla Institute of Immunology. Hope you guys pull it off.

Yeah, no, we love, we love seeing it. Let's go big, right? We go for life changing things here because just solving COVID 19 is, you know, it's going to come and go soon, we hope. But we got to stay relevant for everything ahead.

Fingers crossed. Knocking on wood. I don't know, Rabbit's ear, all the things.

Let's jump into our next story. And with that, you know what that means. IPO alert number 15. IPO of the year. Ventix Bioscience, Encinitas Co. Which we're going to, we're going to touch on Encinitas having an amazing week for tech and biotech, which is the same thing, by the way. Ventex Bioscience went public Yesterday, being the 15th public company of the year in San Diego. They raised 152 million in their IPO to pursue drugs for psoriasis, Crohn's disease and other. I think sounds like not just gastrointestinal, it's kind of all over. So they had a good day. They started training and they were up 31% on the NASDAQ. I didn't check them today. Did we check how they're doing today? I did not, but Jonah is going to do that while we keep talking about them to make sure that they're up. I also don't know their market cap of where they're sitting, but I think it's a billion Plus. They're the 15th startup to go public this year, which almost all of them, if not one or two were pharma related. We've had some tech, but yeah, it's a hot year, that's for sure. They raised 165 million prior to this 152 million IPO. You got some news for us on the stock?

Yeah. So we don't have a market cap listed here, but we do have a high of 2107 or an open of 2107, a high of 26 and a low of 1632. They're sitting around 1930 right now, so it's down 8%. Could be a good time to get in. I guess it depends on how you feel like the trajectory's going.

Yeah, as with most of these kind of pharma clinical therapeutics, it's. It's a few years log before they even have a product that will be approved. So, you know, we are not here to give investment advice, but I do like to invest in biotech companies a little bit a few months to a few years after they've been public because they usually drop at some point in the lull between clinical trials. So congrats, Ventix, congrats Encinitas for another notch on the map. Is this a good time to mention Encinitas? No, let's do it when we talk about flock rate. So Joni wanted to take us into our next story.

Yeah, let's do a quick break and then we'll get back. Back to Encinitas, obviously. Beautiful place, Love it up there. But there's a really cool story about San Diego county looking to expand further into renewable energy. We're sort of testing the water, waters, if you will. You know, wind and solar are obviously huge in the region, but the board of Supervisors is basically. They all voted yes to approve really looking at alt sources. So it's kind of a little bit lightweight. In the beginning they said, yes, we want to do more stuff. But they're looking at three different options to add to the mix. Offshore wind, like we've seen in Europe, significantly geothermal and wave energy. So three kind of really interesting technologies. Offshore wind, we see we're kind of lagging behind Europe significantly. Unfortunately though, the Navy has kind of been pushing back on this, saying that these are wind exclusive regions or zones and there's a lot of them. And they say that this might interfere with training missions. And so I don't really know how that works or how that negotiation is going to work. But there is significant ability to generate wind power off the coast. So we'll see how that unfolds. Geothermal. 6% of California is currently geothermal. So essentially that's when you're using the earth's heat to warm water or you're letting steam out, which is pretty cool. We actually have 40 plants running in California, so there's a significant source there. And obviously we're sitting on so many fault lines here, we kind of think about that from an earthquake standpoint. There's a lot of movement, potentially some heat down there. So we can use geothermal as another option. Wave energy is super cool. I mean, think about like a day when we don't really have waves. Kind of rare. And so the National Renewable Energy Laboratory estimates that California or the west coast rather has the potential for 67% of the needs for this region. That's 23 million homes. Obviously there's an asterisk on that. The technology is not quite there yet. But at night when the sun's not shining, the waves are moving. We always have some swells in the water. And so we're working towards being able to add that to the mix. And there are some companies that have pilots going on in San Diego. CalWave is one to keep an eye on and a few others. But really, to kind of summarize the reason why we're pushing this direction, you know, the city has a goal of 100% renewable by 2030 and to slash net carbon to zero by 2035. And I just wanted to kind of point out net zero basically means that you're sequestering as much as you're producing. So if we have vehicles on the road producing carbon, we have to of go negative to balance that out. So it's cool that the city has these goals. They're not very far away. I mean, 20, 30 and 35 are right around the corner. And the last real thing that's kind of make they're making sure to add to this mix is what we don't want to do is just knock out a whole bunch of jobs and eliminate a lot of industry. It's kind of an interesting thing in the middle of this industry kind of going towards green power versus keeping jobs. But you got to imagine that if you're building a lot of infrastructure offshore, you know, wind farms, geothermal or anything really, that requires installation and maintenance, you know, there's going to be work around it. So I think we'll be able to kind of make a nice balance there.

I think it's great. That one San Diego I think is a trendsetter here, but also we have industry here like Sempra and other pretty major energy tech builders that you know, when you have skin in the game and it's part of your business model, you do something about it. Not just a nice to have. And so I'm excited that we're leaning forward even in California, which tends to leap forward. But also we've got these industries that I stand again for our whole community doing the right thing too. So that's awesome. It's super cool. Fred, you want to lead us into our next story because it's a another unicorn alert. I don't have a sound yet. Do we need a sound for new Unicorn Alert?

Yeah, Fred, what does the unicorn make?

So yeah, I know a unicorn. We need a sound for that. But jumping right into the story, Flock Freight has raised a $215 million round from SoftBank making it San Diego's latest unicorn. Flock Freight joins an elite class of SD unicorns. Seismic Telium, Shield AI and ClickUp. They were founded in 2015. There's a great CEO named Oren. He has been leading that since 2015. They're the millions are in hundreds of revenue. They employ around 300 folks and they plan on hiring 300 more. It's really a big success story in San Diego. And chime in here, Neil and Jonah here because this is such a big story that started Sucking Unicorn last month.

Yeah, this whole idea of cargo pooling is super cool. And Oren joined opening night of Startup month just a few weeks ago. So you actually can grab the recording of his talk. We actually, I guess we preempted it because it was called the new Unicorns panel and it's kind of my fault. I thought they already were at Unicorn, but.

Well the thing was they were a unicorn. When they raised their last round from SoftBank, their valuation was rumored over a billion dollars. So they were technically unicorn, but this kind of just confirmed it.

Yeah.

That's amazing.

I'm glad we can point out to the outfield and then hit the ball there. So cargo pulling super interesting and very relevant in San Diego to be leaders in logistics tech. This is the idea that some cargo shipments and trucks are completely full so someone buys out the full truckload. And others it's just got a few boxes or maybe a half load of a truck and totally different pricing models between the two and so the routing when you've got a whole bunch of different buyers, products on a truck has got to be super complex to figure out in terms of footprint, gas mileage, time of driver being in, in the cab. All those things have to go into it. And so I believe that Fox Freight has built a really smart model to maximize efficiency of cargo going to specific spots and fill an empty space with, with extra cargo that may have missed out on being on the load. So super relevant, not just right now because of COVID but the whole trucking industry is going through a whole generational shift where so many are retiring and you know, there's a huge massive gap in skills and new truckers coming into the spot. So if we can be more efficient with our trucking, we can hopefully fill the talent gap.

I love their branding. Also the billboards in Encinitos.

We have the maker of the billboard in the audience, Sandy, a fresh brewed alumni. Saw on your Instagram that you did the design work there. So congrats on that getting the billboard up and loud and proud. Welcome community to the flockers.

Two quick things I just wanted to point out about what they're doing in their technology. I don't know how many people work in the trucking space. We didn't do a ton of it, but we had trucks probably arriving daily or in some days we had five or ten trucks at line. But sometimes a truck would roll in and they just take one pallet and then they take off to their next journey. But think about this from a perspective of they've said they've eliminated 15,000 tons of emissions to date. And in some ways if you have two trucks half full, being positive here, half full, obviously you have two trucks running, but if you can fill one all the way up and optimize how it's moving, you're obviously cutting down on emissions. The last thing is the previous pre Flock freight system was to take your truck to a central location, kind of like they were describing this hub and spoke, unload the entire thing and then reload it in a different way to go in a different direction. And so think about all that downtime, think about all that coordination and then people kind of hauling around, you know, forklifts and pallet jacks and all that sort of stuff. So they're, they're really solving a huge problem, a real problem. And you know, as the supply chain kind of gets back in order, they're really going to be much more needed once we unload all those, you know, long beach containers sitting There. It's going to be really cool. Love what they're doing.

Yeah, absolutely love it. Yeah. Like you mentioned, the container issue is even bigger. I think there's 101 ships now sitting off the port in Long Beach. So even just the short term mess that's happening there. But the bigger thing to really hype on here is Encinitas. Encinitas now got another unicorn this week. Last week it was Viori, a $4 billion unicorn which even has retail storefront also in Encinitas, plus headquarters. And then this IPO that we talked about with Ventix too, man. What past seven to 10 days for the little beachside town of Encinitas. Pretty incredible.

Yeah. I assume that SoftBank will continue to invest in San Diego. This is their second major investment into a company in the last month. I think Insinitas is going to continue to benefit and San Diego benefits as a whole.

Yeah, totally agree. Well, congratulations to the Flockers and Flock.

Freight office is awesome. I just saw a photo on their post. So anyways, I hope, I hope I.

Can go to the Nixon Building. That's what it was.

I was like why do I recognize that yet so sick.

And I believe they're also redoing the old Whole Foods which has been empty for quite a while as well too. Be great to see. Yeah, a little downtown. Encinise has got, got some tech besides, besides Flock Freight also Equid was housed in the same building, that part of the complex, the old Whole Foods. And they just completed their $500 million acquisition by Lightspeed Partners. Team still there. And Bluma, a bank tech fintech company is over on second street, so just one block over. Also setting up shop. So downtown Encinitas new tech hub. Love it. Wow. Speaking of tech hubs, let's talk about this next story. UCSD just won a million dollar grant to fund an accelerator for underrepresented entrepreneurs. We love this story because it's actually a San Diego thing. This is not by the way, the first underrepresented accelerator in San Diego. We got Connect all, which is a partnership of City of San Diego and Connect. But this one is going to support 90 individual entrepreneurs and startups from underserved communities in San Diego. It's a federal grant that UCSD won and it's from the Office of Innovation and Commercialization run by Paul Robins. They're one of 50 organizations from 26 states that came from the federal level. About 36 million was doled out and there's I think, I guess a second tranche of 40 million coming if they hit specific goals. So going to help create hopefully 90 new companies, which is fantastic. UCSD has gotten pretty good, I guess at tracking UCSD affiliated startups and they claim there are 760 active UCYST affiliate affiliated startups operating across the country in the world. And that these combined generate an estimated $16.5 billion in annual revenue, which we all know usually trickles into the economy in some way or another. Besides jobs through secondary services vendors and other things too. So that's pretty cool to be able to track that. But now to know that you're going to go meaningfully create new companies, I just read a. Not necessarily a stat, but the idea that new job creation comes almost entirely from new company creation, that's kind of interesting. So you know every company that exists already, they're going to, if you take them at the aggregate, they're going to create as many jobs as they kill as many jobs. Apparently that's, that's a known economic development indicator. But new job creation comes from new company creation. So love to see this, love to see supporting companies especially for underrepresented areas of San Diego. So keep an eye on that. A few other things coming up. Fleet Week. San Diego is a military town and sdmac, which is an organization all about military advisor something, Sorry, someone's gonna write me a note afterwards telling me what it is and that's fine. They put out a report that shows, you know, one in jobs in San Diego are military related. Compare this by the way to the recent Biocom report that showed one in 20 jobs are life sciences related. So pretty significant impact of the military on San Diego economy. 110,000 service people, 35,000 civilian military people, plus all the government contractors that are building tech around this. So it adds up to about 350,000 military related jobs which is spending is like 35 billion in direct spending from the military and that drives 55 billion in economic activity. Jonah, way to help me out here. Sdmac San Diego Military Advisory Council I got curious too. I had to figure it out. Thank you. No, we've got to get.

We got.

We need to be fact checked all the time. So anyway, not just it's enough to know that the military is important here, but what are they doing to engage with the community. Well, Fleet Week is coming up November 4th through 11th and not just celebrating the military, but also some major STEM events that are happening for K through 12 and above. November 4th and 5th stem events are happening downtown at the Broadway Pier. So make sure you Go and check out Fleet Week to get your kids inspired in stem, but also know and think up some ideas of where we can be taking this great tech that we're building in the B2B and life science and other world. How can we be applying that to obviously an industry that is significant in San Diego? So the more we can blur those lines and work together and collaborate on interesting ideas commercializing defense tech and vice versa, taking commercial ideas and applying it to the defense world, I think it would be all good for San Diego. So Fleet Week coming up in about a week or so. That's most of our news. I want to talk about one acquisition here which will pull some out of you, Fred. Two startups here in town, an early and a late stage startup came together. One decided to acquire a piece of tech from the other. So Classy, the maker of nonprofit SaaS is acquiring the events software from Lend L E N N D and the platform is Fondi that they had built but is now being called Classy Live. And in fact, if you've been on any event during Startup Month this month you've been on Fondi and now rebranded as Classy Live. So hopefully you're enjoying that. But what we love is to see two startups collaborating that way. And I will disclose that I'm an investor in Lend, so happy to see that from that angle. But in general, just the fact that a later stage startup is finding value in another early stage startup. And first of all, this, Lend Lend had a pivot hardcore. Their platform, they're an events management platform. Live events, Live events, events died during COVID Right. And within months they spun up a virtual conference platform to rival Hoppin. Maybe some of you know, Hoppin, this also massive startup that pivoted out of nowhere during COVID and you know, built it to a point that it was usable and valuable enough for another startup to buy them. So love to see that. Fred, you obviously know both teams. You know, the classy team. What do you think of how they're doing?

Yeah, I think the takeaway here is Classy is a household startup. You know, they have a big success. They raise 118 million earlier this year. And one of the CEOs that led the company, he said that their focus moving forward would be acquiring companies. So I think this is the first stab of consolidation and I think it's great that it's a consolidation in San Diego because it's a success story for the acquisition. But then also Klassie is going to grow stronger. But yeah, I think Klassie is a topic 5 top 3 startup in San Diego. They're not really a startup anymore, but they started, you know, in the early days just, just as a platform servicing nonprofit. So it's just, it's just, it's a big win all around.

I think that's really interesting point. We have this debate like over drinks constantly of what, like what a startup is and when you're not a startup. I wonder if you just touched on something we hadn't really thought of. When you start to acquire companies to really boost innovation, is it does that mean that you've grown to a point where now you're just a startup or you're just a company and you can drop startup from the name versus innovating inside, you know, and growing to that point, it's so hard to know because it could be your culture, it could be how you operate, how you innovate, I don't know. But that's an interesting point that you made about them kind of maturing in some way.

Yeah, it's a good point. Jonah.

Yep. I think I what's better for all of us for San Diego if you're a startup all the way through ipo, if we're going to call you a unicorn, I think you're still a startup at the unicorn stage. You're just a very rich unicorn. You've even got seismic worth 3 billion plus investing in other startups yet they haven't gone public yet. So yeah, I don't know. I guess it depends on what our goal is of still calling it a startup or not. But unicorn startup, I'm game to give them title still.

Point is moving target. It's so impossible to define. But as Fred pointed out in YouTube, Neil, I think it's awesome that a San Diego company's pulling in another San Diego company. So let's see if we get more of that. That's kind of rad to see.

Yeah. And in this case scenario, lend lives on as they do. They just sold the technology, so they got an infusion of cash for some IP and the tech itself and get to go focus back on live events which are coming back. So it's good for both sides that there's value and they continue building what they sought out to in the beginning. But yes, that's our story. That's our week. Good week in San Diego tech, that's for sure.

This is awesome.

Thanks for joining.

So many notes. I was going to say, I don't know how we picked these five. Dang. There's a lot going on, probably more next week. But yeah, good to see you guys.

We'll be right back at it next week. We also have Fresh Brew Tech's email newsletter coming out next Tuesday, so keep an eye on that, which will give you a little bit of a preview of what to expect on next Friday's show. But thank you all for chiming in. See hopefully next week at Startup Month closing event. Jim 10-29-in the flesh at Sorrento Valley's Tech Center. It's the last event of Startup Month, so, man, the month went fast, but we hope to see you all there.

Hope to see you there. And find us on Twitter. Fred's got a new story dropping soon, so you can keep track there. Follow him, Follow me, Follow Neil. We'll see you online.

Cheers, everyone. Cheers.