San Diego Tech News Weekly – October 15, 2021

Yeah. Hello, hello.

Happy Friday. Good to see you all for this week in San Diego Tech, our weekly tech news podcast. We don't just talk startups, we talk big tech and macro stories that are happening in San Diego. I'm Neal Bloom. I'm with Fresh Brew Tech, also Interlock Capital. I'm an entrepreneur, investor, community builder, and friend of all of you. And this is Jonah.

Hey, what's going on, everybody? I'm the guy. I couldn't find the mute button. Jon. Done a ton of ops work, marketplace stuff like Lime handy, Postmates, actually, if you want to pop in. Doing a quick rundown with the REC Innovation center on Monday. As we're just talking building marketplaces should be really fun for those students. But that's coming up. But we're talking big tech today and we have some pretty, pretty fun, big stories that we can dive right into. Neil, you want to lead us off?

Let's do it. And just a reminder, we are recording this, so we can't really have you come up on stage because we've got a funky way of recording this on Zoom. So if you have something you want to contribute to this, either tweet us or send us a DM here on Clubhouse. But this will be live on the Tacos and Tech Podcast network pretty quickly this afternoon to hear these as well. All right, we've got some recent fundings of startups, and while the fundings are prominent, so are the people who are investing in them. So Section 32 and Qualcomm Ventures, both local funds, have invested in some San Diego companies, which is great to see. We love local capital flowing to local companies. Article by Mike Freeman that popped up on our radar. Shout out Mike Freeman at the Union Tribune. Gretel AI closed a $50 million funding round and this is a data privacy cybersecurity startup. And they have raised from section 32, which, what is pretty cool about this, section 32 has predominantly been a healthcare tech focused fund, but they are doing some hard tech too. So the section 32 team comes from Google Ventures. They're the founders of Google Ventures. Actually, Bill Marisa started Google Ventures, then moved to San Diego and then said, you know what, I want my own fund. And they're on fund, I think two or three now added a Mike Polini, who is a medical doctor by training and investor. So between the two of them, Google Ventures background and doctor training, that's kind of why they're in the digital digital health space. But Greta AI is cybersecurity, which is super, super cool. Data privacy. Oh, go ahead.

Well, I was saying we need this, we talk about this a lot. I mean people are, you know, data breaches. Data, you know, integrity is really interesting, but yeah, I just thought it was kind of interesting how they operate. It was kind of in a unique metal, you know, method. Basically what's kind of cool is, you know, they're categorizing data, labeling it, anonymizing it and then removing links to customers. So it's kind of like leaving behind fake data. So it's really cool. So you can actually still use it, you can still operate with these data sets, but you can't really tie it back to anything. So if there is a data breach of some sort of, you really don't know whose or whose data you have or what it is. I don't even think you can make much use of it. But pretty kind of cool method to basically allow your engineers to manipulate data without actually having it as, or having much risk applied to that.

Super cool. And it's a pretty new team actually, only started in 2019 by some really successful entrepreneurs. Actually some have had success here in San Diego. The team, uh, Harvest AI team. So Alex, the CEO of Gretlai was the Harvest AI CEO and he sold to Amazon. I think it's been like four or five years now, um, and then is back doing this thing. He's also got co founders from Stackrocks who got acquired by Red Hat, another data privacy company and E Flux who were acquired by Netscout. So really successful second and third time entrepreneurs building this company. And they're focused kind of all over the place in terms of whether industry is pretty protection wise. Healthcare, health tech, fintech, life sciences and education. So great to watch this team build and grow here locally in San Diego. So congrats.

That's crazy.

It does.

Like you said, you know, you had a health tech investor going in on this, but it really doesn't seem to matter, you know, whose data they protect. I mean all these industries, I'm sure that there's more that aren't listed, have just enormous data sets. But what's cool is they're actually able to, and this may be, this was in the article, but they're actually able to anonymize health data in such a way that healthcare can actually monetize it. I don't know how I feel about that or how you feel about that, but it's a way to actually monetize the data that they're sitting on without giving up the person or individual's personal information. So kind of a unique business model they're opening up to.

It is cool. Let's move on to our next highlight. We touched on this company last week, Ameonix. They landed a $6 million investment with, including Qualcomm Ventures to prevent lithium ion battery fires. We love batteries. We obviously hate when they explode. And there's been a number of prominent stories about Teslas catching on fire. So obviously I don't know how widespread it is or not, but it absolutely is something we should be tackling. I like zero explosions. Thank you very much.

It's funny, it's actually super rare. I think it just gets such a spotlight because, you know, electric cars are so new. I mean, we see, you know, car crashes constantly or car. Cars, you know, having issues, but really we don't, we don't think about it as much. Kind of like car blind to it. But yeah, this is, this is important. I mean, if we can drive down any sort of instance of, you know, battery basically getting to a point of thermal Runway, which is a technical term for basically generating more heat than it can dissipate within the battery, what ends up happening, and this is where it kind of gets a little scary, is if a battery actually gets to that point, it can catch fire. Lithium is pretty volatile, but that's not the only thing, right? If you had a tiny cell and it catches fire like that, big deal. But what ends up happening is one can catch the next and you have these arrays of cells, and so one catches fire, which then starts the next. And now you just have, you know, hundreds or thousands, depending on the vehicle size or the electronic size kind of combustion or going up in flame. And so, you know, we, we never had this happen in lime, but we always had to think about the right fire extinguishers to have for lithium fires and how to think about it. If the event of that actually happening, which, you know, luckily never did, it's super rare. But, you know, this can happen in a couple of scenarios. So if a battery gets punctured that, that can cause something like this to happen if it shorts out or, or there's overcharging. So you have to think about how energy is getting into these batteries and really they just have a simple solution. They partnered with some battery manufacturers to put basically what they call as an energy release or like a circuit breaker inside the battery cell, which is kind of cool. So it starts to get to a point where maybe there's some risk and it takes over and kind of dissipates that risk. And you got batteries everywhere. There are phones, tap tablets, wearables, probably devices that shouldn't have batteries now have batteries and they're really going, you know, getting added everything but pretty cool like travel.

Remember remember back when we used to get on planes? Oh yeah. You know, you'd have to take things out of your suitcases and stuff that had lithium ion batteries, remember?

That's right.

Way more disruptive too. Right. You couldn't even there's certain suitcases that even have batteries in them to charge your phone. Couldn't take planes and that kind of stuff. So yeah, this is applicable everywhere. Hopefully make our lives a little safer.

There was that phone, that specific phone and I'm forgetting the model that was going going crazy on airplanes that was starting to cause this. They probably needed a circuit breakdown honestly.

Exactly. Well, Carlsbad based company. So we love seeing north county continue to increase its role in tech and Qualcomm Ventures getting in on the deal. So great to see. Qualcomm Ventures is I think in the top three active corporate venture arms. So they're writing a lot of deals and actually we actually every time they invest in a company, whether in San Diego or not, we listed in Fresh Brew Tech's newsletter. You'd be surprised how often they're writing checks and a lot are not in San Diego, but this one is. So we love to highlight that when we do. Let's jump over to our next story. The Union Tribune put out an article on the 26 phenomenal San Diego women in business that you should know about. And we are proud to know some of them. But. But man, I want to know the rest. That's for sure. Some fantastic leaders here include. And so some of the background here, they didn't just take current today. They looked also at leaders who helped us as a city get here as well too. We're talking Mrs. Scripps herself and all the way on up. So one highlight to cover Sylvia Ma. She is quite the angel investor leader here in the community. Got a great, great highlight here. Sylvia is the head of Stella Ventures, Stella Labs and Ad Astra which is at all have female focus in terms of investment and helping female entrepreneurs get up and build their business. So love seeing Sylvia get a highlight in this list. Specifically she also helps put on Women Venture Summit every year. So shout out to Sylvia. Another great connection in here is Donna DeBary. Donna has, I can't believe she holds two of these roles at the same time but because she's incredible. Currently vice president of Inclusion at Seismic, one of our large unicorns here, but also same time the executive director of the Central San Diego Black Chamber of Commerce. So shout out Donna, like holding down two very important roles. Great to see and great to be recognized for that. Martha Dennis, she's widely known as being one of the kind of prominent early workers at Linkabit, which is the first company that the founders of Qualcomm started. And she rode that wave of early telecom in San Diego that went on to help her create Windward Ventures, which was like a late 90s, early 2000s venture firm with her and Dave Titus. So super prominent in the telecom and early venture space in San Diego as well. And she's always had a hand in Evo Nexus, helping there as a mentor. Arlene Harris, commonly known as the first lady of wireless. She's co founder of Great Call, which maybe many of you know as the Jitterbug or cell phone for old folks. Her husband I believe is kind of known as the founder, like the inventor of the cell phone way back in the day. And she was right there involved from a tech, tech development perspective too. And Great Call had a great exit recently to Best Buy which now runs the Jitterbug product line. So yeah, this list will be tagged in the show notes if you want.

To go read more.

Great prominent tech leaders in our community. And not just tech, they've got a list of great other great leaders in the community like Jenny Craig and Judy Mizet, founder of Jazzercise. People have had a pretty big impact on not just San Diego, but the business community as a whole. So great, great list to highlight here.

Yeah, definitely, definitely look this up. 26 phenomenal San Diego women in business you should know about did that. Is that new Apple show based on Jazzercise? Have you seen that one?

Oh, it might be, yeah. I forgot what it's called.

I think, I think so. I don't. It's.

It's.

We started. It might be worth checking out, but it's even cooler if it's based on what she's done.

Totally. One last name that's mentioned on here, Mary Walshock. She is a mentor of mine. She wrote the book on tech community innovation or ecosystem innovation back in like in the 80s way before Brad Fell was writing the Startup Community Way. She took a history lesson of San Diego from its roots of a military town and a research town and how that turned into an innovation hub and capital shout out to Mary, who has done tons of things right now she's focused on helping UCSD expand to downtown San Diego as well as bringing the community together from the innovation campus that UCSD is building right at the other end of the trolley line, right at the veterans hospital. So anyway, great list. Let's go on to our next story here, which is a new investment by Softbank in activewear maker Vuori. Softbank is loving San Diego, man. They've invested in a bunch of companies. We're going to talk through that. But they made a pretty massive investment, $400 million investment in Vuori, which takes them to a $4 billion company. So I don't know what our $4 billion unicorn sound is besides air horns, but shout out to SoftBank and Vuori on that. Vuori hasn't raised since 2019, which in VC raising years, while it sounds like 2, 3 years is like 10, it's a long time. And they obviously were focused on growth. They were Last valued at $200 million and obviously have catapulted during COVID from E Commerce and from literally us ditching all things clothing except Athleisure and now go from a $200 million to a $4 billion valuation.

Insane job.

Yeah. So Encinitas based company that has a store has started their own storefronts. We call them D2C, as in direct to consumer. Because they own, in a sense, the journey of selling. They're not necessarily focused on only going through Amazon or only going through Walmart. I'm sure they have those channels, but they've got their own storefronts, both physical and digital. So D2C, it's one of our, I think it's our first DTC unicorn, which is great because commonly San Diego is known as a B2B town. We know we make things that either sell to businesses or just in other products or on the life sciences side. So great to have a name brand prominently here. But they're taking on some pretty big other brands like Lululemon, who's obviously established themselves as the Athleisure brand. What's Lulu's market cap comparatively to Viori here?

It's 50 billion for Lulu at this point, which is pretty massive. And so you kind of wonder.

I.

Mean, I guess Softbank's got to see something in this brand to kind of see the growth potential. But at Lululemon size, I mean, almost everybody's heard of it, so there's not really a lot of. I mean there's probably growth potential, but it's not the same that Biore might have. Whereas, you know, some of us are just starting to hear about this brand or we're starting to see their logos around town, which means there's a lot of growth potential. But SoftBank, per the Forbes article, actually was saying they need to take the leader spot in the category in order for this investment to really make sense for them. I mean, if they're already valued at 4 billion, I mean the growth, they really need to kind of continue to grow, which is pretty crazy. But another thing that was really interesting that kind of came out of that same article was where the money was going. And usually you get this money going into a company and they're going to spend to hire a whole ton of people and they're going to grow as fast as possible. But looks like instead this is actually headed to shareholders going right into their pockets, kind of bring some security to other stakeholders in the business and basically allowing people to feel a bit more comfortable to put the foot on the gas. I don't know if people are maybe tied up pretty heavily in equity within the brand or if they needed to kind of feel a little bit more comfortable. I mean, it's a risk in some sense because if you, you know, if you're paid today, you know, you got to find another way to kind of stay motivated. And that might just be, hey, we want to have world domination here. But it also might go the other way where you say, hey, look, I'm rich now and why am I going to need to kind of keep putting all the effort into making sure this brand gets even bigger and bigger. But again, I mean, not a super old brand. I think they really found it in 2015, but man, they timed this thing just right. And I guess sometimes it's better. As Rex Ryan, our former jets coach, used to say, sometimes it's better to be lucky than good. I know their products good but man, they time this, they time Covid well and you know, we're all, we're all wearing our comfy pants at least and you know, they're, they, they move right into that. So congratulations guys. I'm loving, I'm loving that it's a, you know, like you said, it's a, it's a direct to consumer, it's a consumer facing brand. It's a big splash. It's going to put more eyes on San Diego and that's something that will really, really help the city.

Absolutely. Let's jump in, dive into another list of recent honorees. The Top tech awards just happened a few weeks ago and it's a yearly celebration of tech leaders both from for profit Nonprofit government, big tech, startup tech. And it's full of a panel of judges that are all tech leaders in their own regard. CTOs, CIOs of companies. So a few winners that we're familiar with here in town. Top tech executive the year, Dave Henderson from Millennium Health. So congrats, Dave. The CEO of the year went to Zeb Evans, CEO of ClickUp, one of our other big fast growing unicorns here in the community. Congrats to Zeb. Also awarded Nonprofit Business Leader of the Year as the Chief Information officer of Rady Children's Hospital. Albert Oriole. Love that we're celebrating just tech leaders in general across all industries and big and small Startup Honoree of the year, Arti Arampour, who we recently had on the Tacos and Tech podcast. He is co founder and CEO of Seekster, a digital health company. And some honorees from the city perspective. City of Carlsbad's Chief Innovation Officer David Graham was honored for the as the government honoree. So congrats Mr. Graham. Love seeing you in that role and doing a lot of good in North County. Public honoree for public companies, Eric Haller, who is executive VP of Identity fraud and Data labs at Experian I think gets the nod for top public tech exec of the year as well.

Very cool.

Yeah, it's great. Love it. Congratulations everyone and thanks to the Top Tech Awards for still making this happen year in, year out. Usually it's an in person party. This year we obviously had to do virtual, but I'm sure we'll be back. Hopefully. Fingers crossed, everyone in person of some sort next year to celebrate.

Can you imagine like how hard it is to kind of distill this down? I'm looking, I'm looking at the judges here. It's like there's 24 people who have to kind of go through all these. I don't even know how they kind of came to the end of this. I'm sure there's some criteria but man, there's like a lot of, a lot of judges here looking through a lot of really awesome executives and leaders in San Diego. It's pretty, pretty cool to see who came out on top.

What's great is they typically will invite honorees after you've won to be judges in the future. So you know, it's great to be celebrated for your excellence and then say hey now help us pick the next year's honorees. I think it's a great give back in that regard too. There's another list that's been Put out about San Diego's largest public companies and how they did stock performance wise. We love to talk stocks here because we can. I'm a holder of a bunch of San Diego public companies, stock and private. But we're talking talk public companies in San Diego by market cap and how they did financially. I think everyone knows Qualcomm's the biggest by market cap in San Diego, but I think you'd be surprised at how big of some other companies are here in town, including Illumina and Dexcom. These are companies who are both kind of straddling the tech and biotech line. Right. They're making tech that affects the biotech world. You want to dive into some of these?

Yeah, I think some of these are pretty impressive. Pretty big, like you said, you know, Illumina, number two on this year's list, nearly tripled since the company was added to the s and P500 in 2015. So not that much time there. And they're. They're 3X, which is. Which is pretty awesome.

So they're on this list because of percent gain, performance wise, of their stock in the first half of 2021. Correct.

That's what it's sounding like. That's wild.

Yeah. So 21% gain in performance in just six months. Think normal year, a full year. 7% gain is what the stock market averages. And they did 21% three times that in six months. So obviously beating the market big time. Sempra, another company on the list, one of the only two Fortune 500 companies in San Diego. I hope we change that now that we've got some bigger market cap companies.

We'll see. They move from spot four up to spot three. So they're moving towards the top. We'll see. We'll see what happens next year.

Sempra is an interesting one. They're kind of a mandated big company. Right. Like we have to buy their energy. So therefore they have a big market cap because they serve a big customer audience from us. But Dexcom is serving a very small, specific area. They're having diabetes space, you know, detect insulin and glucose. Sorry, glucose levels, I think. Jonah, you. Are you a Dexcom customer?

Yeah, I'm a fan. It's funny, there's like 21 million people in their target audience and that's not that many. And they have a really pretty small percentage of that competing with some, you know, bigger companies like Abbott. But it says their shares have gained 500% in just the last five years, 100% year over year. It's like, pretty enormous. And, you know, they're getting ready to launch an even newer CGM G7, currently on G6. The new ones coming out, I think with, you know, the connections between phones, watches, other apps, you know, this is only getting better. And surprisingly enough, you started. We're starting to see some athletes now just saying, hey, heck with this. I'm just going to buy this technology because it's so helpful to kind of keep me at peak performance. So they have growth potential beyond just this, this area. They haven't even touched type 2 diabetes yet. So, man, this company might, might just continue like a rocket ship.

Well, just from a side note from this article, which almost is a little outdated, you know, they said first six months of the year, they. Dexcom was a $41 billion market cap company. I'm pretty sure they're a $60 billion market cap company now. So they've actually increased 50% just from June to now. And I would imagine they're on path to do that again, but December. So theoretically we could be Looking at a 200% growth market cap in just this year alone. We'll see where they're on track to do that. But yeah, great company to own since you can, and I own some stock. ResMed falls at number five. Maker of sleep tech, Reality Income, Realty Income. Sorry. They are a reit. So real estate focused, you know, owner of tons of real estate.

Wow.

Too simple. One of our few tech IPOs of the year went IPO'd in, I think March or April. We covered it on a past podcast. They are doing autonomous trucking and they have seen a growth in the first half of the year.

One note on them before we move on. They're actually up against a really, really important benchmark. They are now saying let's send, or trying to say let's send trucks on their routes without anyone in them. And if they can accomplish that, that's going to kind of vault them up into that next tier for, you know, for safety and actually being able to do a bit more. So, you know, normally or leading up to this point, I think they've had sort of the safety driver, someone sort of, he's there just in case. I don't think that they're engaged all that much or need to be, you know, doing all that much. But, but now they're saying, hey, let's just, let's just send this thing on its own. Let's see what happens. And so those tests are coming up soon and that's really going to change kind of perspective on this company if they pull this off in a highly successful way.

Of that the last three rounded out are all Biotech Fate Therapeutics, Marathi Therapeutics and Neurocrine Biosciences. And while it's not necessarily shocking to see them, what's more shocking is how many tech companies are ahead of them. And I love seeing big tech in San Diego, you know, owning the list of top performing companies. And it's great to see biotech there too. But you know, I love everyone, everyone loves to talk about San Diego as a biotech town. But look at our public companies, they beg to differ a little bit. We biotech, by the way, is tech.

So we're an athleisure town now.

Yeah, San Diego is athleisure and that does that round out our stories. Yeah, we've got that is the week, a lot of kind of funding and financial news, which is great and shouting out some great people in the community. A few other companies that did raise on the startup level, Serafina Thera did a 5 million Series A, which is a real respectable Series A for a biotech. Usually I'm seeing Series A in the biotech like 50 $100 million rounds. So it's kind of nice to see head down to earth Series A raise from a biotech company, a company that moved recently from San Diego or from San Francisco to San Diego. Groove just announced a $45 million Series B. I just grabbed it and saw it on Mike Kren's LinkedIn just a few minutes ago. So we'll go grab that story and make sure we talk more about it next week. Love to see companies moving to town from other areas. So maybe we'll do a highlight on Groove and how they moved from the Bay to Athleisure headquarters. San Diego.

Heck yeah. Come on. Everyone's welcome. Come on down to San Diego.

Well, that is our show. Thank you all for spending some time with us here on a on a Friday or whatever day of the week it is that you're listening to this at a later time too. Remember, it's you can find this recording on the Tacos and Tech podcast as well as in our weekly or every other week email newsletter by Fresh Brewed Tech. So without further ado. Well one, we'll see you all hopefully at other events of Startup Month which are occurring through the end of the month, including our next in person event on October 29th in person in Sorrento Valley and otherwise. Jonah, have a good weekend.

Hey you too. We'll see you out there.

Cheers. Bye, everyone.

All right.