This Week In San Diego Tech News

Hello everyone and welcome back to another episode of This Week in San Diego Tech News with your besties Fred and Neal. Hey Fred, how you doing?

Hey Neal, good to see you. Good to be back as well.

Always with you, nice to be online with you and with our friends who continue to tune in. And listen to the stories that we bring to, to them. Also to our friends who are the ones in the news making the news that we're happy to share, and then let us know what's going on so we can amplify. We are here to bring awareness to the San Diego tech ecosystem about all the great things that are already happening. Honestly, we then try to convene some people ourselves into some of our own events and share more news as well. So Thank you all for tuning in. Make sure you're subscribed and following Fred on LinkedIn, on X, and at his Substack, Business of San Diego Substack. You can always— you probably found this through the Rising Tide Partners Substack. So thank you all for subscribing there as well too. Fred, we've got some news. We finally got some funding to talk about. We've got some events coming up. But first, it's been a busy last week. Just thought we'd do a little debrief on some recent events. I've hosted a few groups together for some fun events. We've kind of got this new Rising Tide partner way where after we fund a company, we show up with as an LP and investor base and dive in deep with the company, get a tour, get a really good onboarding of the product and see where we can open our doors as a group, you know, dozen, two dozen. So we just had our second and third company portfolio visit of two different companies. One of CSATs is a company that we reported on recently for them closing raising a $20 million Series A for autonomous ships. These are under 20-foot vessels that they're doing at a variety of roles, whether it's monitoring, interception, data, and other kind of detection and, and data link transfer. So it was really cool. Mike Flanagan, the CEO and founder, and team hosted a group of us to really get a deep dive into the boat world, which are being made right here in San Diego at about 50 boats a year at a clip. But they are already got the next plant coming online in the next few months. They'll be doing 200, 250 boats a year, which is pretty cool to see. They're right there off of the 5 and like Balboa, just north of Costco. They're gonna stay in that area. So it was really cool. You'll see some posts from Rising Tide Partners about our, our visit. Yeah, really impactful to see the hardware. You got to see hardware in person. Another one, I'm just going to cruise through these if that's cool. Blue Nalu hosted also our group, the Interlock Capital and Rising Tide Partners investment group, for a tasting, for their largest tasting, largest group tasting they've done to date. They didn't really just have like 2 to 3 people, like some sushi chefs to taste it. But we got a taste of the bluefin tuna toro, which will be their first product out to market this year where they're— and they're expecting FDA approval in March, which is pretty huge. So as soon as they're approved, they are in market. They've got their 3 restaurants picked out already in San Diego. And let me tell you, I was impressed of the taste. Like, I'm still actually pining for more of their poke. Their bluefin tuna toro poke was delicious. So I'm looking forward to that being on the menu. It's going to be— like I said, they already have 3 restaurants that are their launch partners here in town. So thank you to Lou and team for hosting us. And there was a sushi chef there making live sushi for us, which was pretty cool. And then lastly, we kicked off really San Diego Angel Conference season with the San Diego Angel Academy, a one-day 101 education level deep dive to really understand the mind of the angel investor. What is it that goes into it? And so I hosted and emceed the whole day at SDSU, thanks to Kathy Pucher and team for hosting us. And we had 50, 60-plus people in the room who were there who are in various stages, some who have been doing angel investing, some who are who have just done their first and some who are curious but haven't done their first check yet. So it was great to have people in the room. Ashok Kamal, the executive director of Newfund Ventures, was there to kick off the day with me. And then we had a series of angels who, man, had been at it 3, 4 decades, some of them. We had some Viori angels who told the story of almost passing, but then not, the story of investing deeply into deeply passionate founders and failing because Apple Pay was announced the next day, We really, we got some great, great, great lessons learned. Brian Dirkmaat gave a great talk on kind of the legal side of documents you can expect. And then close out the day with Will Alanik from Fusion II, which is a new VC fund in town from a bunch of exited biotech med device founders who started a fund. So, and then we, and then an open social with all the SDAC applications. Um, we just finished, we got 135 applications. Now it's time to go review them and bring that down— number down to 6 who will get the investment by end of May. So it's been a busy week, but I'm excited for SDACs and angel conference season to be kicked off. All that said, let's jump into the news. Yeah, Fred?

Yeah, I was just commenting that, uh, you know, San Diego has, you know, some great weather over the weekend. We've been keeping track and I think it got over 80 degrees on Sunday. And, uh, there also was another event that I saw hosted by Startup San Diego. Uh, they had their Techstar Startup Weekend. Uh, they hosted it at the KION, uh, KION Carlsbad coworking spot, actually Rancho Bernardo. And I think there were about 3 winners. And they also, you know, celebrated International Women's Day. Definitely a busy week of events. There's also ACG San Diego, which is taking place this week. There's something for everything. So it's really cool that you're doing these, you know, gatherings at companies. There's conferences happening also, as well as sort of events. So yeah, it's definitely a busy, busy month so far. And we're only a week into March so far.

Seriously. And I'm about to hop on a plane and head to South by Southwest for about 12 hours on Friday. So I know people are out and about as well., let's jump into our first news here. It's got a big press, I would say, mention or just tweet mention on X. The new $100 genome by Element Biosciences came out. I think, I think we've been promised $100, the $100 genome for a long time, but this one seemed to break some headlines and break some people's brains a little bit. You want to give us the scoop here on by Element?

Yeah. So there was a great article by Eli Walsh from the San Diego Business Journal. It says Element launches benchtop capable of $100 genome sequencing. And Element Biosciences has been at it for a while. They were founded in 2017 right here in San Diego. It's woman-led by a lady named Molly He, and they have about 400+ employees. And initially they launched with a $5 million seed round, I believe, right out of here at UCSD. They pitched the idea to some VCs at the Geisel Library, I believe. So yeah, they've actually hit this milestone of releasing their first product at $100, going toe to toe with Illumina, which is one of the largest employers in this space who has kind of helped lead the way in genome sequencing. So this is big news. I did see someone from Salk, the president, tweet about it or post about it on LinkedIn, and we got a lot of hits and impressions. This definitely was big news in the life science ecosystem.

It is definitely, and Element, you've heard their name a lot 'cause they've been around for a bit, but I feel like they've done a good job of keeping the brand out there in a way that most biotechs don't, you know? And maybe it's because of their founder there, but you've seen their name for a bit out in the news and even at the consumer level. I feel like I almost saw them something related to skincare or skin line as well a few years ago as well too, you know? Doing kind of biotech meets consumer. So really cool news to hear. We're going to track this, obviously, see where this ends up. Just as much as we talk about what's happening, you know, to the software world being, you know, disrupted by AI building its own software, if you will, I think we'll see the same in what gets brought to market from other high-tech leading industries. So excited to see that. We'll keep tracking it for you. There was a number of biotech fundings that caught our radar here as well. You want to take us through these fundings?

Here, Fred? Yeah, so we've been tracking some of the fundings. Uh, there was some news by, uh, Candid Therapeutics. They actually had a merger, I think a reverse merger, with a company called RallyBio. I believe it was rumored around a $505 million deal. I reached out to the leadership team to talk more. I believe they're in quiet period until that finalizes. Um, but yeah, they're the latest biotech company kind of have, you know, a big funding, you know, funding merge. I expect to see more of this. You know, we saw a lot of SPAC deals in 2021, but reverse merger seems to be pretty popular. We also have two other biotech fundings. They were new to me. We'll link them in the show notes. I think one was called Spinogenix and another one I can't pronounce. Quarter Curator. So we're going to link those. But yeah, I think we're starting to see a pickup or uptick in life science funding after kind of a drought of early-stage deals. And so we're starting to see a bright spot for some life science companies, which is, which is good overall.

It is, especially for Spenogenics and Creator. I think these were seed and Series A deals. It's great. Those are the hardest deals to get done. I love to see that. CanTherapeutics, $500 million reverse merger means they've gone— they've joined with RallyBio to be a public company. Which is not the end of the journey whatsoever for Bio, right? It's just another leg up and could be another 5 to 10 years. You could go buy their stock right now and still make 100x maybe on where they end up down the road. So Bio is a, is a long journey, but a worthy journey for what you end up curing, that's for sure. From the funding side, Newfund had some news out. So Newfund Ventures, which candidly I'm a member of and I've been a member of a number of their funds, is a local angel group that also has an annual angel fund. So they collectively invest into a fund that invests in the companies, usually about 15 to 25 companies per fund as well. And they, they kind of as a group do the diligence, and then individual members can invest directly into those companies as well too. What are some of the news that came out of their recent fund, Fred?

Yeah, there's a headline in the Business Journal: Newfund closes most successful year since 2021. They did an exclusive interview with Ashok Kamal, who is the executive director of Newfund Venture Group. They also have expanded beyond San Diego recently to Boston, Seattle, and Austin. The article talks about how, you know, they've maintained averaging roughly around $10 million annually every year since 2019. And they remain active in both life science companies seeking pre-seed or seed round funding. And they also have done over 100 funding rounds since 2019. So they are pretty active in expanding their national footprint. Shout out to Newfund. They're one of the key players supporting the early entrepreneurship ecosystem here in San Diego.

Yeah. And in fact, most— many of you might know them as their original name, Tech Coast Angels San Diego Chapter. Company that actually funded my startup back in 2014, and which is why I became a member in 2019 to— once I had my exit to kind of reciprocate back. And during COVID they very much had to go online and found their membership, you know, kind of grew in different pockets in different areas. So it's kind of cool to see, especially as they run like a volunteer president role with Serhat Pala, who's a successful entrepreneur and in VC who's, you know, taken a group locally in San Diego to go visit other ecosystems like Austin and Boston to build, you know, relationships, and which eventually turn into more members, which is more capital put to work. So it's great to see, and congrats to them on growing it. Let's talk some big tech. Uh, there's a local, um, presence from BAE Systems, a large multinational defense tech company, you know, right up there with Boeing and, and Lockheed. They're— while they're UK-based, they have a huge presence in the United States. In fact, I interned at the Bay Area office of BAE Systems in the— in back in the day during college. But their local San Diego office does a lot to support the NAVAIR program, which is the, the military naval air presence as well as the Air Force. And so they've got a— they want a new contract of nearly, I think, $100 million to support the F-16 program, one of the older, you know, fighters in the Air Force quiver now at this point. But so, so plenty of maintenance work to be done. BAE Systems locally, which is engineering group, supporting that. F-16s are being used heavily right now in the war in Iran. And I got to imagine that the military is thinking, how do we extend all of our programs so we have as many weapons at our disposal? Great to have local engineers helping that. That's, that's battlefield experience in a sense on your products that you don't usually get often when you're designing some of these big systems. You're getting feedback and saying, how do we And with today's tools, how do we change the maintenance program to support them faster and quicker around that? So great to see. And hopefully that trickles down back into our defense tech ecosystem here. Last story on our list, just caught it just before we hit the record button here. There's an article in the UT about a new proposed undersea internet cable between the United States and Australia. Whoa, that's a long one. And it's looking at like Maybe Carlsbad might be the area where this connects in on the U.S. side. Fred, you get any more details more than what I shared already? Yes.

Good scoop by you and Tribune. This is going to be interesting to follow. Basically, this, this new fiber optic cable will come ashore near the area of Carlsbad, specifically near the Palomar Airport Road. And yeah, I think I saw a statistic or a fact that a lot of the internet cords are actually in the water, in the ocean. So, yeah, interesting to see this being proposed. To have a cable that goes from Carlsbad all the way to Australia. And there's a few companies involved in that. If that were to go through, just something we will be following. This is a good scoop.

7,000 miles of cable. Pretty crazy these days. This kind of cable is actually like a defense piece. It's— it's— you see actually cables getting cut In other parts of the world, this is actually a system of national security that actually I would think someone like a CSATS could be used to protect in their regard. So really interesting to track. It probably brings together a series of different domains and expertise that again, we'll continue to track and share as it progresses. We mentioned events. There's a lot happening. Fred, you've got a scoop on one happening at UCSD just in the next few days here.

Yeah. Yeah, there's a Longevity Innovation Forum happening on Wednesday, March 11th. This has some speakers including people from like Altos Labs, which is a leader in longevity space from the Bay Area. And there's a few other speakers from like Homelabs and RenewBio, among others. Yeah, this will be a conversation around bringing together longevity science, biotech innovation Uh, we'll continue to bring more news there. I'll be in attendance. I believe it's happening on the 11th and the 12th, uh, in partnership with UCSD.

Oh, awesome. Great to see. Uh, another one coming up in the next week is the, the return of San Diego AgTech Gathering up in Escondido. Now the physical hub that we've been working on is actually officially, um, on contract and being built out, so we're excited to share the early dwellings of what will be, the ag and food hub of San Diego, right in downtown Escondido. So come on out, check that out. Uh, as well as March Mingle, the annual and 20th annual March Mingle, tech's biggest night out, I would say, all in one night, uh, coming up March 25th. And the next day, our monthly AI bio gathering is getting together at Founders Corner on March 26th. So plenty going on. Like I mentioned, about to hit up, get on a plane here in a day or so to head to South By. A few of us actually, I think Brad Moser, Shout out to you. I think we're going to meet up there and a few San Diegans who now live in Austin are going to get together while in Austin. So thanks everyone for tuning in. Fred, as always, thanks for joining. Remember to follow Fred's Substack for more events that we mentioned, the ones that we're putting on. Check the Social Coyote and Eventship. Fred, thanks for joining in here. Always a pleasure, Neal. Always. We'll see you soon. Thanks everyone.

Cheers.

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. Gotta shout out Tech Coast 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 SD be full of hustlers from couch surfing to penthouses right on the beach. Tech leaders who believe stars are within reach. We interviewin' founders who be shootin' for the moon. #SDTechos with your host Neal Bloom. 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 and 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 and tech, you know we got it, hey!