This Week in San Diego Tech News - August 16, 2024

Welcome back everyone to this week in Santa Tech news with your favorite besties, Neil and Fred. Here I'm Neil Bloom, part of Interlock Capital, Fresh Brew Tech and the Tacos and Tech podcast. And here's my co host, Fred Greer.

Hey Neil, glad to be back talking the biggest stories in startup and tech. I'm Fred Greer. I write about startup and venture capital scene here in San Diego.

Startups get the party. Startups get the party started. The party Startups get the party started. You want tech and tacos, Tacos in tech you know we got tacos and tech is on smash Boulder green guacamole keep accountants counting beans. Contador Quentan frijoles found us trying to raise some queso la vida San Diego school of rappy rapping Fire tortillas round jalapenos in these modern times a crack have 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, the Tijuana est? Be full of hustlers from couch surfing to penthouses right on the beach. Tech who believe stars are within reach. We interview and founders who be shooting for the Moon. Hashtag SD TechOS with your host, Neil Bloom. Come on. Startups get the party. Startups get the party started.

Welcome to the Tacos and Tech podcast where we interview tech leaders in the San Diego tech ecosystem. We also read the latest tech news on this Week in San Diego Tech News. Follow us and subscribe online to your favorite podcast network. Well, it's been a summer and we're in the August time period where things slow down a little bit. I feel like this is when most of the vacations come in. So news is, you know, hit or miss sometimes. Come August, hopefully, like we've mentioned before, it's going to be a hot fall in terms of events and other things. So we told people, go take your vacations in August. And it seems like people are doing it. So that's good. We got a few stories here. Let's dive into a few of them that have come across our desk recently. There's been, I think, a pretty big biotech exit. Kind of feels like another every week another big biotech exit. Also another week, another biotech shutting down. So that's been the story of all of 2024. In the biotech world. You had a hot article on this. I think it was hot. Breaking late, breaking for Fred here. You want to tell us about this billion dollar exit?

Yeah. So the headline is San Diego VC fund capital efficient biotech startup gets acquired for 1.3 billion. And this was acquired by a German farmer giant. So we did a piece basically highlighting Avalon Bio Ventures. And this is a biotech focused fund that is operated by Avalon Ventures, which is a long standing biotech venture capital firm that's been around since 1980s. They've invested over 750 million in early stage startups, both life science and tech. And so the piece will hyperlink it in the show notes, but essentially it was Neuro Therapeutics. They only had like nine employees, they've only been around for five years and they were scooped up by a big German farmer giant for $1.3 billion and they acquired the assets. What's interesting about this story is that this venture capital firm not only invests in these companies but they typically incubate them and then they hire, you know, experts and consultants and they, they run it pretty lean. And so I think they only raised about $6 million and they got acquired for over a billion. And so that's, that's what I call a home run, massive success, mega exit. And it's a pretty big win here in the biotech scene.

Huge win. That's so awesome. Love to hear that. Yeah. Avalon's got a long history in locally. They've invested in some of my friends, companies like Score Stream, Shout out to Derek over there and Stack iq. They even invested in Zynga, the gaming company. But overall it seemed like over time since I've been watching them, about 10, 15 years started to skew a bit more bio, bit more bio. And it made sense when they raised their last fund to be a biocentric focused fund and now it's already paying dividends in that regard too. So we love to see the exits because we know it recycles and especially it's local. It's going to recycle too. So that's pretty rad in that regard. And great scoop by you, Fred. Let's talk about some earnings season. It was earnings season for some of our public companies just recently. Over the last month, a few of the companies have reported earnings like Qualcomm, Resmed, Sempra, we, I know we did a piece recently on Qualcomm's recent partnership with Manchester United, but then they did an earnings call. You have a pulse a little bit on what's going on with Qualcomm related earnings recently.

Yeah, so Qualcomm stock is up, but I did read an article recently that their deal with Apple is set to expire next year. You know, Qualcomm has really been riding the AI wave. I've been seeing a lot of news around, you know, their dominance in the computer market, but also kind of saying, hey, you know, our chips are powering some of this AI movement that's happening this year. We saw Nvidia stock skyright, skyrocket to the roof. And Qualcomm has been up pretty substantially as well. It is up currently 20% year to date. And we also have two other companies, ResMed and Sempra, which stocks are also up 32% and Sempra at 5%. And this comes after the following, the, you know, the Q2 earnings report. However, a few few days ago, I mean the stock market tanked and then it recovered to almost all time high. So it's like, it's kind of hard to follow. What, what are your thoughts on the recent stock market, Neil?

Well, oh man, the macro is, is not for me to speak of as an expert, except that it was, you know, seeing the Japanese yen scenario that caused it threw a lot of people off. A lot of people thought, oh, black swan. But they were able to back out of the bank, decided to un. Undo their decision and the stock market recovered really quickly. So I think it shows that we're on, we're on tippy toes right now. Like there's a few companies doing really, really well and that might be masking everything else going on, which is that companies are kind of teetering. They're like, are we really doing well? I don't know, should I cut, should I spend? I don't know. Like, I think actually, you know, a little bit closer to the edge than we all think. Related to Qualcomm, obviously we've been known for a while, they've been trying to diversify revenue for a long time. That, that Qualcomm Apple dispute only proved like, all right, this, yes, we found agreements, but there may not be long term friendships here. And so, you know, we've seen the diversification for sure into cars, into many other platforms. And I hope that bears fruit, that's for sure. For Qualcomm, I think it's great for locally because it'll get applications of technology into other industries which is good for our innovation economy. Handsets are such a monopoly. But if we could find Iot for everything that has been the promise that would be great for the startup community to find put IoT and chips into many more things. So I think it's great. ResMed did release their earnings. They pretty much were in line with plan so they met expectation. They're up on revenue income margin. So they actually up year over year on, on all those areas. I did see them actually trim a little bit of, of employees so you know, everyone is trimming a bit but I don't think they're doing the massive layoffs that we're seeing kind of on the big tech side as much. But ResMed is a little bit different. They're you know, more in the sleep world med device, they're not as immune to or they're more immune to you know, changes in Covid and, and kind of other diseases like they're working on problems that like sleep. Like everyone has that issue at, at all times. So I, I don't expect too big of change in resmed in that regard. And so therefore their stock is up because you know, they've met expectations and they continue to see an opening market for them to help on sleep tech. Last one here, we want to cover Sempra. Sempra in the energy space. The energy world is super interesting especially with the change of some big oil and natural gas players because of the Ukraine, Russia war. I think Sempra has been a net benefit because of that of finding new options in Europe to get natural gas to European markets. So their revenue, their stock is up. Do you have any more color on on Sempra?

I don't have any more color on Sempra but speaking just in generally, people don't think of San Diego as having too many publicly traded companies. But there's also other companies here like Amazon, they recently leased office space and UTC Mall and we also have a few other players like Apple and Google as well. And so I mean these are the main ones. Resume, Qualcomm, Sempera. It's great to see that their stocks are up and yeah, yeah, I actually.

Have, I've got a public facing spreadsheet called SD Publics that Jonah Peak and I put together a year and a half ago that actually tracks every day stock changes in every publicly traded company. I'll link in the show notes if anyone's interested but it's something we've been tracking. I probably haven't updated of the most recent IPOs but there haven't been that many so it wouldn't take that long to update. But it's something we were tracking for a while to just see how many public companies are there and we actually even have historical in there. So how many were there that are no longer public or no longer San Diego? Anyway, super interesting to always keep track of. Let's talk about some other news in the community. Let's go to more of the startup side. San Diego Angel Conference has announced that it is moving its affiliation from USD to sdsu, which is a big change up when it came to town, I think it's been five, six years now. It was, you know, first of its kind in really California in general where it would train a whole new class of angel investors through an actual process of a pitch competition. So they actually said, hey, you want to learn to be an investor? Great. Join us for a six month curriculum where we get people to apply, learn what angel and venture capital is, do the diligence on companies and weed down to a pool of six companies and then in the room in front of everyone actually make the decision and cut a check to the company right then and there for equity. Awesome program started by Misty Rusk, which honestly has started a bunch of angel conferences in a number of cities throughout the years. I've seen them spread to Seattle, all over kind of the western United States and it really, I think began in San Diego. So great program and moving it over to, to sdsu, which is, you know, a net gain because of what SDSU has been building up over the last year between tech stars and their Mission West Valley. Mission Valley campus. What's your read on this, Fred?

Yeah, I just want to share a few facts on Angel Conference. I did a piece with Misty earlier this year and they launched in 2017. Some notable companies they've led investment rounds in is Aqua Cycle, Limber Prosthetics, K Health, among many others.

They supported Shout Out, Verity, sorry, portfolio of Interlock.

To date they supported more than 500 startup companies and they've collectively raised over 300 million from investors across the globe. According to Ms. Russ. It's a big get for SDSU. It seems like they're continuing to add to the powerhouse there next to techstars, which they also have with sdsu. So it's a big win for SDSU and kind of a loss for USD in a sense.

I think so, yeah, because it felt like each university had its own little place in the ecosystem and now it is a loss. So I hope USD finds another program to support and build and grow because we definitely need more programs in general. Uh, and you know, looking forward to seeing what the next year Is like over at Angel Conference. I hope that means Misty's coming with it because she's the founder and lifeblood of this behind the scenes, even though I know she's tried to scale herself out of it a little bit. But hats off to Misty and the whole team there. Uh, you went over and got a recent tour visit of Tusimple. This is San Diego's interesting story of this, of this company, Chinese slash San Diego company that is doing autonomous trucking went public. Tell us some backstory here and then tell us what you, what you saw from the visit.

Yeah, so Too simple is, you know, used to be unicorn tech tech startup darling in San Diego, Mike Freeman written pretty frequently about. I think Brittany Myling must have covered it when she was at the Union Tribune. And you know they make autonomous big rig trucks. They were valued at 8 billion at its peak. They went public I think via SPAC in 2021. Yeah, it's safe to say they're not, they're no longer public. They've done layoffs of like cutting I think roughly I think quarter of their workforce. And I recently got the chance to check out their office space down in utc across the street from UTC Mall, Westfield. And I can't say how much square footage they had available, but it was a lot. And they're currently subleasing to other startups who, who might want to move into those spaces. It kind of sucks, you know, Too simple was one of the, the cool, cool tech tech companies in San Diego and for them to go public, I really was hoping to them, really hoping for them to win. I think they're still around actually. So yeah, just some backstory there.

Yeah, no, I, I would love to like get more of the story too because yeah, they were valued between 8 to 9 billion at their peak as a public company. Like we don't have many tech companies valued at that here. And to actually be doing autonomous truck trucking between I think it was Tucson and Phoenix was where they were, they were live and we're already starting to get to go across multi state so I don't think they're doing that anymore. I think they've got, I think Tusimple's got a totally different business model now, so. Interesting. And we should, we should do a part two to this for sure. And someone should go get that cool office near utc. Maybe you get like a truck as part of inside too, like an autonomous truck that we're at. But anyway, another thing I'll add before.

We jump to the next story is I Did see the co founder, he's starting to build a stealth company so I'll be curious to see what he builds next if it's in trucking or if it's something completely different.

Ah, okay. Well one make an intro and yeah let's follow up for sure. Let's move over to Evo Nexus, San Diego's longest running nonprofit focused or, or yeah I think that's how they've been calling themselves a non profit incubator where they have, they're what brought me to San Diego 11 years ago. Incubating companies, hundreds of companies and they've just made an announcement of a new healthcare focus Health tech focused incubator accelerator. You want to tell us a little about the news here?

Yeah, so they're partnering with several organizations, some that are huge. We talked about one, ResMed, Abbot Laboratories, Sharp Healthcare and so they're going to be working with these organizations to accelerate startups Evo Nexus. They've as you mentioned they've been in the community for a long time. I think of some of the companies that have gone through Evo Nexus that have made an impact like Eco ATM for example. A few others I think go share a few others.

Omnia had a huge nearly billion dollar exit by them. Etikogenome $100 million exit I think by illuminating like some big, some big ones for sure in this, in the space.

Yeah it's interesting to see them to try to go in the healthcare space. My last partnership I saw them do was a few years ago was with Qualcomm focused on 5G and that IoT technology. And so to see them jump dabble into healthcare it's you know it sounds like they have the right partners involved but they really touch everything. They do tech, they do healthcare. I'll be curious to see what, what startups come out of this incubator.

Yeah what I like when Evo does this is that they bring you know, real executives from real tech companies to the table to actually give of their time to startups. And like think of if you're you know a little two person, three person startup working on a sleep tech device. Like be pretty hard to meet the chief medical officer of ResMed. But Carlos now is, is involved. Carlos Nunez, who's, who's the CMO at ResMed. Like you have access to it and so one what's cool is that they use them during the vetting process. So they're having you know, domain experts at the kind of corporate enterprise level seeing what's interesting and new out there. And then they're determining, hey, this would be interesting to us at ResMed. I'd be willing to work with them over the next year or two years even, and to give them feedback. Maybe they personally angel invest and maybe they work out a partnership with these companies as well too. So I think that's great, especially to look inward and say what. What companies do we have in San Die that could actually benefit our startup community? Like that's the smart way to do it. So I'm proud to see that evo's continuing to connect kind of big tech and startup tech here to look at the domain expertise there. So kudos to Rory and the Admiral for continuing ahead. Speaking of, we're going to talk about them in a second, but they've got their demo day coming up in September, linked here in the show notes, so make sure. I don't think it's live on their website yet, but Rory did email me to tell me it is September 16th at Qualcomm, so it will be a way. I'm sure they'll talk a lot more about this partnership as well as meet some new companies there. But we got one last piece of news to share. We actually tend to actually having a good news cycle here. Metropolis iq, a kind of a gov tech, data tech company, has kind of come out of stealth and really cool to see the team come live here. You want to give us the lowdown on Metropolis iq?

Yes. So the Business Journal had a pretty great piece. Karen Parman, she wrote a piece on August 14th. Essentially this is a tech company, SaaS company that's using generative AI and basically pulling data from different sources. This is like Federal Consensus, Federal Reserve, other public and proprietary data sets and they're creating insights and they're charging subscription for it. And so this guy, the founder, he's actually a former San Diego economic developer and so he has firsthand experience working with this data and he's using technology to make it better. And so you probably have more details on this, Neil, but I love to kind of learn more about the startup.

Yeah, well it's gotten to know them a bit over the last year. I've worked with Eric and co founder Josh Shapiro for probably maybe five, six, seven years. Eric Caldwell was originally the, I think the director of Economic Development for the City of San Diego. So we did some stuff with him with through the EDC and through Startup San Diego. And then he actually got recruited to go work for another govtech company called the Atlas, which was a portfolio investment of mine. So Got to see him there a bit. It was cool to see him go from public to private. You don't see that often. The Atlas was building kind of like LinkedIn for government employees and it made sense to pull in people who'd worked in local government to kind of help build that business. I think Eric and Josh got to know each other because Josh Shapiro was chief Impact officer and strategy officer for UCSD extension. Pretty much was like Mary Walshock's right hand person for pulling data reports and you know, kind of anything that was needed to get grants, win corporate development and corporate programs. And that's actually where I got to know Josh as well too. And so to see the two of them come together, Eric and Josh, and say hey, we see this need out there of data for governments. Josh was the pro in creating data reports. Eric was the pro in understanding what governments needed at their fingertips to on a quarterly, monthly, yearly basis. It was pretty cool to see. So congrats to to both of them in coming out of stealth. I know they've already got a number of customers locally and abroad know a number of the cities are already using them. So congrats guys and wishing you the best in in the the path ahead. Let's go to some events. As always we we love to pull from Jonah's social coyote. So click a link to find a much deeper list than we can ever find. But we were recently at some events so we'd love to share just, you know, our own thoughts at events that we were recently at. I was recently at the Carlsbad Life in Action Clean Tech gathering hosted at Aptera, which is a electric vehicle company. Talk about space, man. They've got a huge space that will be the future plant, the manufacturing plant for assembling these three wheel solar powered electric vehicles. And they had a bunch of the iterations like version 1, 2, 3, 4 there, which is cool to see. They showed us they even have the duct tape path of where the robots are going to go and assemble what part at what point in the space. And there's a whole bunch of clean tech leaders locally from from north county came together for it hosted by the city of Carlsbad. And then they pulled out one of their newest cars and gave everyone a ride which was super rad. I have never been in something that accelerated so fast in my life. First of all and it felt and it looked inside just like a Tesla like screen everything. There's a video up on my LinkedIn somewhere where I probably yelp like a little girl. And it was pretty cool. So go, we'll put a link to that as well. I'm happy to share the, share, share the love of that. But thanks Aptera for hosting a cool group of people. You were at the new fund gathering recently. Tell us about that.

Yeah, I retweeted that, that those photos you posted on your Twitter, I thought it was a great event, all the diversity that was there too. Yeah, I was at the summer social hosted by Newfound Venture Group, which is the largest angel group in San Diego and I think they're pretty large in general on the west coast. They had, they had a kind of housewarming party in Del Mar hosted at one of their members house and it was great. Got to connect with a few people including the head of jlabs. He's a, he's a new head there and I'm looking forward to kind of grabbing coffee with him soon. And it was great to just meet with other angel investors. There's some, some companies that I met, a husband and wife just recently sold a company for life changing money and now they're looking to learn about startups and you know, they haven't invested in a startup before. Heard about new fund and trying to get, trying to get involved. So I think what they're doing is pretty cool and summertime so a lot of these investors are on vacation and so people are coming back and it's great to you know, reconnect with those in the community whether they're, you know, former Qualcomm employees and there's 20, 20 plus Qualcomm former Qualcomm employees there or Illumina and now they're, you know, becoming angel investors. So it's awesome to, to see our community thrive not only from a startup, you know, creation perspective, but also like the, the capital, local capital. So it's great.

Totally. No, and as, as a new fund member myself, I was sorry to miss it. Sorry to miss you again. But I'm glad you were able to go out there like new funds. They've, you know, the reason they left TCA Tech Goes Angels is because they were charting their own course and they really have, they've got members. I think only like 50 to 60% are local at this point. Like there's so many people who've joined from Alaska to Boston because they've heard about this great group in San Diego. Like how cool is that that we have a group of capital providers like that. So really cool. Congrats Ashok Dean, Caitlin Sirhat, like the leadership team, you definitely continue to you know, lead and bring a lot of people together who want to socially invest, which is what New Fund's doing. Last event that I went to last week was the CEO retreat in Via de Guadalupe down in Mexico by Silicon Valley Bank, DLA Piper and Arcus Nexus. I have been saying I want to go to this event for years, and I finally made it happen. So thank you, Dyra, for pushing on me and inviting me. It was so cool, to be honest, one that had no idea that we had such a historic wine scene just one hour from here. I think people talk a lot about Temecula. I've been talking a lot lately about Escondido. But this, I would say, is at another level, honestly. These were like wine estates that we went to that are really tucked off of these dirt roads in these valleys that you would have no idea that they're these big estates. And we did it all with like just 20 of us, mostly Series A + founders, people mostly founders who just recently raised Series A. So, you know, add a new trajectory in their path and we got to spend a lot of cool time together. What was even cooler is that the owners and the venters of the wineries came out and like, really talked about their craft. And you could tell they're like, really proud. Even if we couldn't. We, like, some were speaking just Spanish, were getting translated for us. You could tell how proud they were of winning these international awards for their wine. So I'd recommend that go check out the local La Valle de Guadalupe scene. The food scene too. And the views were incredible. So thank you to Silicon, My bank, DLA and Arcus for bringing us all together for that really, really special time. For sure. We got a bunch of other events coming up. We've got just in the next few weeks, we have the North County SD Startup Mixer. This is Hussein's mixer, as most people know, man, I think he'll probably top 200 at this event. Like this next one, it is a big event, which is pretty cool. August 21st. The next one after that is EDC Summer Bash, which I know you've been to before, Fred, and I'm hoping to attend as well. What else we got on this list? Carlsbad Life Science Gathering. So another life science event. But at the end of this month at Thermo Fisher, which is probably what I'm saying to goes larger biotech companies and their bigger presence. I think it's their biggest campus in all of Thermo Fisher is in Carlsbad and they're hosting for that you have some events here on your list as well you want to mention?

Yeah, I think we have. Yeah. Evo Nexus demo day you mentioned it's happening September 19th or 16th. September 19th, CTO talks Devin data Night Seismic. That's your event that you're hosting. And September 23rd pitch deck workshop for ST startups. And we will highlight, we'll hyperlink all these events in the show notes. There's probably like two. Two more you want to mention, Neil.

Yeah. One back on September 12th, the Wharton Biotech panel. So Wharton Angels are putting on a biotech panel with some luminaries in biotech. What else here? The Carlsbad pitch. So Pitch deck workshop. Longtime pitch deck pro Nicole Andrew. She's been hired by almost every startup in town to help them design their pitch deck. She's going to give a workshop on how to build or pitch deck yourself. That night is the Carlsbad Tech gathering at Shipcom in Carlsbad. Kind of be a mix of CBG Retail tech of North County. And then the probably the biggest event by population wise of the year will be Connect's innovation day on September 24, which should be a really good day. That's a lot so we'll let you go find the rest. But there's so much more coming in October like Stocktoberfest Interlock Summit 2024, just putting it out there. San Diego Startup Week and everything else coming around as well too. So get clear schedules, get your work done so you can come out and play with the community and connect with other people. You hear a lot of people are moving to town which means every time you're meet new people out there as well who are going to be valuable to you. And as always Fred, pleasure to do this with you. Pleasure for you all to be listening to us. Make sure you're sharing this with others. Subscribe to Fred's Substack SD the business of San Diego Substack. Make sure you're sharing this tacos and tech Fresh brew tech substack with others as well too. And we'll see you all an event near you soon. Thanks Fred.

Thanks Neil. See you next time.

Startups get the party. Startups get the party started. You want tech and tacos? Tacos, you know we got tacos. And tech is on Smash bowl to green guacamole keeper Countins counting beans Contador Quentan Frijoles found us 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 press gotta shout out to angels by the ocean watch the sunset La Jolla shows entrepreneurs trying to get funded When San Diego Startup Week is popping in the summer Oceanside, the Tijuana St. Be full of hustlers from couch surfing to penthouses right on the beach Tech leaders who believe stars are within reach we interview and found founders who be shooting for the moon Hashtag SD decals 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, party? Startups get the party started. Startups get the party Startups get the party started. You want decking, tacos, tacos and tech, you know we got it, hey.