This Week in San Diego - March 7, 2025

Well I am here at UCSD hanging out at the Design and Innovation building mostly because Greg Horwit told me to. And he's doing his every other month meet the VC event tonight at 4:30. But the whole day the VC has been hanging out. So Sean Tzu from lowercase Capital is down. He's a UCC alum, graduated in 2012 and it's cool to have him around. He's just taking different meetings throughout the day, different round tables. He had a lunch and anyway that's cool. And then so just the fact that I'm here, of course just run into ecosystem. So Brian Dirkmont walked by, he's hosting startup office hours from 2 to 4 and who in my office at the time? Two student founders that I have been meeting as I have been present. One who I presented at Jody Jacobs class. Pravard just came up, said hey, I want to build the deep tech ecosystem in San Diego. I said come with me. And he helped co organize TechCon SoCal with me and every time I'm on campus he just kind of we just hang out together.

That's awesome man. I love that.

18 year old wonderkid like has 6 degrees already. He's 18, he's a junior by credit wise and joined the army rotc. Co founded two companies already.

Wow.

Wants to hang out and build deep tech ecosystem with me. So I'm like I love it.

So UCSD is on the come up man. There's some great talent coming out of there and that's great to hear that there's like a week to VC happening. Like there's a center of gravity pool at UCSD and I think it doesn't get enough credit sometimes but it's awesome that you spend more time there. I need to spend more time there. You know, being UC alum too, it's great. I love it, love that you're spending some time there today.

I know, I, I agree with you. Like it's hard to come on campus to be honest. Like it's just there's this you know, natural and physical barrier where you're just like and I gotta like pay and I can only be there for two hours. But when you just decide to just plant yourself for the day, you just figure it out and do it.

Just figure it out anywhere else.

So yeah, shout out to, to Paul and to Greg Horwit and to Pravard who I know will be listening to this later because it's you know, fun to be around and see, see things changing and growing and all that stuff. So. So. And then. Oh, I'm going. Yeah, I'm going to the Triton basketball game tonight, which should be fun. You want to come?

They've been crushing it. Are they. Is it March Madness right now?

They apparently if they win tonight, I think they pretty much have a chance to be in the bracket, which is huge.

That's huge, man. I went a few weeks ago and I was like really surprised. Just like the school spirit, it was a sold out basketball game. I have never felt so much energy in so much UCSD sports history. And I used to work at the athletic department for a little bit during my time and there's been something that's changed ever since Division 1. I think this year we're starting to see that effect of Division one. And yeah, the UCSD men's basketball, I think the coach has been there for a long time. He's done a phenomenal job of just turning that organization around and putting them on the map. It's awesome to see. So I'm curious to see how your thoughts are attending tonight's event. Hopefully get the win and make it marked madness.

I know. Hope so too. I have never been to a tribe basketball. Even when I was an undergrad, I had never gone before. So I'm excited. The JMI sports team, actually they reached out and invited me to come out. So how did that happen? Actually, they came. Oh, they came out to. Well, I know them from the days when they were at the Loyal Nick Miranda and then they came to our Fashion File Carlsbad event a few weeks ago and then invited me this game. So that's how serendipity happens in San Diego.

Startups get the party, startups get the party started.

You want tech and tacos, tacos in tech. You know we got tacos and tacos on smash border green guacamole keep accountants counting beans Contador Cuentan Frijoles founders trying to raise some queso la vida San Diego school of rappy rapping fire tortillas round jalapenos in these modern times A craft beer and coffee My coding yoga posse fold the body origami we be surfing Coronado eating tacos el gordo the tacos stand in puesto lucha libre and sombrero gotta shout out to cost Angels by the ocean watch the sunset La Jolla shores Entrepreneurs trying to get funded When San Diego Startup Week is popping in the summer Oceanside de Tijuana esti be full of hustlers from couch surfing to penthouses right on the beach tech leaders believe stars are within reach. We interview and founders who be shooting for the moon SD techos with your host, Neil Bloom. Come on.

Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. Startups get the party. Startups get the party started.

You want tech in tacos, tacos in tech, you know we got it.

Hey.

Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. Startups get the party. Startups get the party started.

You want tech and tacos, tacos in tech, you know we got it. Hey.

Let'S dive into some news. You put out a great overview just recently on the business of San Diego Sub stack and I already had. I've had a rolling list in our joint shared notepad and most of them are on here too. And I was grateful that you put it out and put it together. We got a bunch of recent rounds raised and I would say all over the place. Like we got autonomous surface vehicle battery, tech, AI powered platform for vehicle inspection, and then a bunch of life science. You want to go through some of these together?

Yeah, let's do it. So I, I won't. We won't go through every single one, but I'll call out the ones that I thought were pretty notable. We actually had some news that broke today. Gotta mention it, SHIELD AI just raised some massive funding. I think it was like 200 million additional funding just broke news today. So yeah, we might, can. We can do a deep dive at a later date. But that just happened today, so I think that's, that's pretty big. So surely as a kind of a uniform defense tech company in the region. But the article I put out with Business of San Diego Substack really just pulls out, you know, tech, life science, and also the top headlines that happen in the month of February alone. And I would say if you looked at January, the funding that we had showed a trajectory of like, hey, this might be the another big year of VC funding for San Diego. I will say going into February and March, it seems like VC funding has kind of ebbed and flowed a little bit. There was a lot of life science funding that went in in January, in February, we're seeing, you know, disbursements between life science and tech. We did see some pretty big funding rounds. We had csats, which is autonomous vehicle service vehicle goes in the water. They raised about 10 million Series A. We had UCAT power, which is kind of a clean tech data center. EV there in that space, they just raised 4.8 million. I'm actually reaching out to the founder to get an interview to kind of learn kind of what they do because I believe they are kind of a two, two part company. Maxwell. It's like Maxwell and UCAP Power, they both kind of run in like in conjunction. So yeah, I'm interested to see, to learn more about what they're, what they're up to. I'll pause there. Neil, there's. Was there any funding that you kind.

Of stood out to you already? Just to talk on these a little bit. You know, I was at a defense tech dinner put on by Ellen Chang Monday night and CSAT CEO and was there, which was cool to meet him and hear kind of, you know, where he's feeling how San Diego can be leading in the autonomous water surface space. Which is kind of cool to see it in that regard. And there was a lot of enthusiasm at that like defense tech hub. Why isn't San Diego on the map? Let's do it. Let's go. I may have already spun up a website, san diegodefenseday.com to put on a physical demo day on an aircraft carrier. So that may be happening already. Sneak that out there. But the UCAT team, if I remember right, this was a. Maxwell was actually acquired by Tesla and then spun back out. Is this where UCAT came from? This is the spun out team that left the Tesla team, right?

That is correct, yep. That's cross bat, I believe.

Yeah, yeah. Battery density in Carlsbad is pretty cool to see. So that's awesome. I put out a LinkedIn post today or yesterday about what are the next 10, 10 billion dollar companies to go public and hit in San Diego. And in fact Shield AI's seed round lead investor shout out to Homebrew commented that it's SHIELD AI to be next. It's been cool to see the Homebrew team cheer on San Diego Tech because I think they have one or two investments here and you know, called it one day early because maybe he knew a little something was coming on this investment here from SHIELD AI. So two defense tech deals coming together at the early stage and late stage, which is awesome. I also want to make sure we talk about your life science conversation you had about performance of the ecosystem. Life science side versus other cities. You want to take time to talk about that here or later in the fundraises?

Yeah, I mean we can talk at a high level. I met with a 20 plus year biotech analyst, he works at Cantor. I Thought they were a boutique firm. I guess they're pretty large, they have thousands of employees. They're kind of an investment bank firm for late stage companies that help them raise capital and prepare them for the IPO stage. And he shared a very interesting statistic. He actually sent me some of the research following our conversation. But we met in Del Mar Paseo which is one of the best meeting spots in San Diego I think and seem like that post really resonated with the community. We'll link it in the show notes. But essentially he said that just looking at San Diego life science companies publicly traded in the last year, if you look at their stock performance, we saw about 80% increase in stock performance in San Diego alone and compared that to other cities like Boston, San Francisco, other similar lifetime subs, they saw about a 10 to 20% increase in stock value. And the quote he provided me was, you know, San Diego's biotech ecosystem is incredibly robust. It's also incredibly investable for both public and institutional investors. And I thought that was super fascinating. Everyone knows San Diego is a top three biotech hub behind Boston, San Francisco. But I think what we're seeing from the publicly traded companies is they're out outperforming companies in those, in those other cities. So it's really just, you know, a cool thing to just share. I think everyone is passionate about San Diego but it's cool to see the numbers behind it and you know, we're just getting started.

It is pretty amazing. We used to do a little like San Diego public stock index check in year. Dear man. We got to bring that back because we were comparing our public companies to other public companies. Maybe do a little sub index on our public life science companies in that regard. Kit, Vince, Gerald, by the way, you know who the most recent CEO is or was maybe for the last 40, I think two years is now our new Secretary of Commerce, Howard Lutnick. So very storied company and you know now, now having a pretty, pretty significant role in what's going on in globally. And that's good to hear from the talent at Kenner Fitzgerald. Giving you that kind of data I think is great advice. And now we can hopefully help build the way there. Hopefully we're on the map even more. Something else to talk about like at the highest level there in terms of building off of that is a recent IPO that happened. You want to talk through the most recent IPO from here. Biotech in San Diego.

So this is the first IPO in San Diego this year. Aardvark Therapeutics, they netted about 94 million. They focus on obesity. I believe they created a therapeutic that targets people who are looking to lose weight. And I actually met the CEO at Bio 2024. They have this big conference in downtown San Diego where thousands of biotech folks from the top hubs come to San Diego and they have a bunch of networking opportunities. I remember being at one of just like the off sites, I think it was at someone's car garage somewhere. There was like 100 plus CEOs and investors and yeah, I remember talking to Art Mark, CEO who's also a UCSD alum which just talks about the proximity of San Diego and I think he had just raised series C funding or Series D funding was pretty significant. We did a story for the business journal and then yeah, a few months later, six months later, it was in June, you know, in January of this year went public. They're based in UTC area. I think they have about, you know, 50 employees or so and it's been pretty positive. I think their stock is went up and just great win for San Diego and hopefully we can see more of that.

Totally agree. I think we will based on one. How many fundings happened last year, how many exits happened which will recycle. We've already seen the recycles of people exiting and then starting their next biotech company. And there's a bunch more fundings that happened recently as well too. Some names that we have grown used to hearing funding wise like Carlsmed and Chroma Code and then a bunch of early stage deals that happened as well too which would love to see especially the Biochanic team, Resolute Science and Roboden, all early stage biotech or health tech platforms. And on the. No, that was all life science in that regard. But on the acquisition side, let's jump to that real quick. We saw a. Usually we're used to seeing our companies get acquired, but one of our unicorns actually made a large acquisition here. You want to share the news of Drata?

Yeah. So Drata is a compliance unicorn in San Diego. They were started I think in 2021 by former portfolio Portfolio, which is another company in San Diego that got acquired, I think your former company. And so these guys have spun up a new company called Dratif. They've been kind of growing tremendously. I think this might be their second acquisition now. Yeah, they just acquired a company called Safe base for 250 million. And like as you said, we've seen a trend of, you know, startups being acquired. But now we're seeing San Diego based companies acquire local companies. That could be a cool train to look at. I think Seismic has made some deals, there's a few other firms have made some acquisitions of smaller firms and Drata has been continuing to grow. I think they have over nearly 800 employees now or more than that. So it's great to see them succeeding in the space and they've almost become a leader in the compliance space. I think soc compliance and a few other things they do. And yeah, it's a huge news. I thought it was pretty significant.

Yeah, it's great to see for sure they I think have the claim at least in San Diego. The fastest to unicorn. It was like zero to 18 months or something. They had three funding rounds and then pushed them over. I think they jumped right to like 2 billion valuation wise with their third round of funding. I think a series A or a series B all bam bam, bam right back to each other. So Markowitz brothers and Daniel Marashlin continue to grow a good SaaS business here in town. Some other news I don't think we've actually had a pod to our own to break the news about Ecosystem Wise kind of shockwaves I would say through it of Connect and Preby's foundation kind of linked to each other to a certain regard. So Connect, a 40 plus year innovation nonprofit, really kind of the public face of the startup community in San Diego which had a big merger with San Diego Venture Group about seven years ago which brought Mike Kren into the leadership role of Connect. When the two organizations joined forces it was actually Connect with San Diego Venture Group and they dropped the SDBG at some point. Mike Kren was CEO and just announced that he's stepping down to lead a new $50 million fund with a family office, the Prebys foundation which is big news in the ecosystem. Love to see new local money being invested and I think they have a San Diego only mandate in investing. What do you, what do you take of this news here, Fred?

Yes, this is pretty big news. You know Mike Cran has spent 10 plus years, you know, really building up the life science and tech startup community via the vehicle of Connect San Diego Venture Group. Before that I think he, you know, used to work at cooling, do a PD there. He's done a lot for the community and he's going to continue to do that. I think now with his next, his next venture. I will just tease that you know we're going to have more venture firms in San Diego announcing some Some large funds. So this 50 million dollar one is pretty significant. I think in the next few weeks we'll see another VC firm spin up and claim San Diego. And you know Mike Crin, he spoke at our panel event in January which was kind of the VC outlook event and he said hey, you know, we're seeing you know, more, more investors, more companies move to San Diego. They haven't been raising their hand because they've been kind of been afraid for getting overwhelmed by deal flow. But you said, you know, living amongst us and you know it's super positive and it bodes well for San Diego and I couldn't agree with you more. I think we're going to see more local money being spun up in San Diego and hopefully it's reinvested here and we're expiring the next generation of investors. I think it's going to continue to compound and put us on the map.

I completely agree. Can't wait to see more funds be announced. I know, remember last we did a kind of end of year biggest funds. There was 2 billion dollar plus funds that spun up last year. A fund to fund Stepstone which had an infrastructure related focus and a clean tech infrastructure fund. I'm excited to see what spins up new here as well too. And more capital locally is great. I think it's interesting they're hiding among us for this fear of deal flow because to a certain regard I actually relate to that like as soon as people know oh you're an investor, like it actually turns very transactional. People are like oh let me start pitching you out. Let me turn on now. It's like as exact opposite of what I want. Right. I find oftentimes where I used to wear my analog hat and jacket I don't now because but I'm out there in the public but I just like need people because just it's more of a human nature thing. People just start, you know, pitching you and you're like I want anything but that's to be pitched. So I kind of relate and understand that. But at the same time we, when you're out every day of the week in your community meeting people you might be meeting great founders. And so you know, it's on us, the people who are connected in town to engage and connect. The investors are who are here and show them good deal flow and show them like you can come out and there are people worth meeting and you can't hide. So I call on you and me and, and everyone else to just invite the people who are Here every day way easier than hey, you're in town once a year, let's make sure you got some time there. So it's on us to like make those connections. And it's on us even more now that Mike Kren's kind of moved on to be honest. Like he was has The Rolodex of VCs to San Diego and so I know he's not going far, but still a little bit different. It's now on all of us to do that work as a community to make sure that our local companies are seeing the VCs and vice versa, the VCs are seeing our company. So it's kind of a call to arms to everyone in that regard. Let's round out with just a few kind of general like not as much startup news. You had some news here I hadn't seen this. That Warner Brothers is shutting down their San Diego gaming office, which is a bummer. I think they opened like during COVID So it's been a tough time I think to get people in a brand new office in Carlsbad. It's a beautiful office by the way. It's a behind the lofty coffee if you know, in the Carlsbad village there, it used to be part of the Carlsbad antique shop and they turned it in this beautiful space. So bummer to see that. And funny timing when we are doing our second gaming tech gathering with Carlsbad Life in Action on this coming Monday, which we have some awesome gaming companies coming out for that. We keep continuing to do the monthly Carlsbad Life in Action gatherings and then the. The Waymo self driving car company. It has been seen in San Diego, which is awesome. I cannot wait to jump into one of those. You gonna do it? You're gonna jump right into a Waymo.

I'm excited for the Waymo. I think that's gonna be cool. Especially for San Diego. There's certain neighborhoods that are, you know, are kind of hard to park at. North park comes to mind and you know, downtown it'd be cool to stick a Waymo to Petco park and see the Padres play and get picked up and dropped off at your house and not have to worry about parking. I think it's San Diego is one of the great test centers to test that out. It's. It's cool to see, you know, tech spending more time in San Diego. It's going to definitely be a net positive for our city for sure.

I'm already going to download the Waymo app to see when I can get in one because yeah, I'm so excited. I recently, only very recently got the experience of full self driving from a Tesla and honestly you can't put that genie back in the bottle. Is life changing like as much as Tesla has ridden the EV wave, I think it's the self driving is a whole nother level that is what makes everything appealing about transportation. So to see those two coming together, maybe, at least in San Diego I'm all for it. So you got any other events or anything on your list here to shout out?

There's always something going on. I would just plug Social Coyote. Jonah Peak does a great job of curating kind of the, you know, the community public events happening across San Diego from downtown and Orange County. And when there is, you know, different VC events or CEO events, I try to share them on Twitter and LinkedIn when possible. What's on your radar Neil?

Well, depending on when this goes out, you may may have already been gone but the San Diego Founders Hike is upon us first Friday of every month. 6:30 in the morning, Glider port. I think it's supposed to rain. We're still doing it anyway. Rain or shine we will have a good chunk of people out there. We've got like I mentioned the Carlsbad events coming up in two weeks. I'm starting a very regular founder build day in multiple parts of the community now. So now we're on month two in north county. We're doing month one at Anser in the convoy area and those will be all will start happening on third Thursday. We're going to start Founder build day and third Thursday happening multiple locations throughout the county. So we're looking for the downtown hub to get that going as well too. And man, if you think I do a lot of events now and you've seen, you think how does he do it? Don't, don't even count on it because I got so much coming right now. There's just such a hunger and appetite for curated gatherings specific education. I think the ecosystem honestly is just starting to like re wake up right now and I'm excited. So we will see you all out there. Fred, it is a pleasure to be on the mic with you and thank you all for tuning in. Make sure you're subscribing to all of our substacks and our newsletters and sharing so that the job of amplifying and educating is on all of us. So Fred, thanks for joining.

Always a pleasure Neil.

Cheers everyone. Thanks.

Startups get the party. Startups get the party started. Startups get the party. Startups get the party.

You want tech and tacos, Tacos and tech, you know we got tacos and tech is on smash for the green guacamole Keep accountants counting beans Contador Quentan frijoles founders trying to raise some queso la vida San Diego school of rappy rapping Fire tortillas round jalapenos in these modern times a craft beer and coffee my coding yoga posse fold the body origami we be surfing coronado eating tacos el gordo the tacos standing puesto lucha libre and sombrero got a shout out to coast Angels by the ocean, watch the sunset la Hoya shores Entrepreneurs trying to get funded when San Diego Startup Week is popping in the summer Oceanside to Tijuana SD be full of hustlers from couch surfing to penthouses right on the beach Tech leaders who believe stars are we within reach we interview and founders who be shooting for the Moon SD TechOS with your host, Neil Bloom. Come on.

Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. Startups get the party. Startups get the party started.

You want tech in tacos, tacos in tech, you know we got it.

Hey.

Startups get the party start ups get the party started. Startups get the party. Startups get the party started. Startups get the party. Startups get the party started.

You want Tekken tacos, tacos and tech, you know we got it. Hey.