This Week in San Diego Tech News - Oct 31, 2024

Well, hello there, friends of the pod. This is Neil Bloom and Fred Greer. And this is this Week in San Diego Tech News. Hey, Fred, how you doing?

Hey, Neil. Doing pretty good.

Good to see you. I missed you all last week, buddy. We've been running around the community doing the thing. I think we're all still kind of coming out of the San Diego Startup Week fog or from just a great, great, great week.

Startups get the party. Startups get the party started.

You want tech and tacos, Tacos and tech, you know we got tacos and tech is on smash for the green guacamole keeper. Counting's counting beans Contador Quentan frijoles found us trying to raise some queso la vida San Diego school be wrapping 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 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 to Tijuana Estee be full of hustlers from out surfing to penthouses right on the beach. Tech leaders who believe stars are within reach. We interviewing 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. 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 in tech, you know we got it. Hey.

How you doing?

Right now I'm doing a lot better. Last week I did come down with a flu, so I didn't miss most of start San Diego Week. But I've enjoyed seeing all the posts on LinkedIn. There was so many people out and about, networking, attending panels, speaking on panels. It was really great for our startup city.

It really was. It was fun. I was. I was there for like four of the five days. I also needed a little break because I was still coming down from LA Tech Week the week before and Stocktoberfest. So Oktoberfest was super fun. Probably 5, 600 people came together in Coronado for a few days. Of all things money, I would say we had just as much crypto talk, meme stocks talk, banking and wealth management, all the things. It was really cool. And there was a lot of San Diego's there as well as a lot of, I would say a lot of Twitter personalities in the money world. So Howard Lindsin held it down on stage for a solid two days, which was pretty cool. And then I was back and forth at Startup Week in between. Then I also went and spoke at our favorite class to speak at the social entrepreneurship class at UCSD Rady, which was. I spoke a week after you did Fred, which was fun to talk to that class. I've got a number of follow up meetings with a bunch of students who want to talk about career and internships and all this stuff. Always a fun time and it was kind of fun to do it one week after you did it. Shout out to Jody Jacobs who brings us in for that. And then was the main event all last week, Startup Week, which was super fun to do. Carlsbad, Tijuana, San Diego State, then downtown, the return of the Downtown Crawl, and then finally ucsd. It was pretty fun. What was super cool was some of the keynotes that we did actually. So first night in Carlsbad, first of all, it was always fun to close down some streets. It always feels like, you know, we're doing something big when you close down some streets. Which we did right in front of the Carlsbad Village train station. And then we had a bunch of talks that were really like interesting businesses, I would say, like not as many VC backed businesses kind of conversations, but we had the founder of Bird Rock Coffee, Chuck Patton, kind of like I interviewed him and Mike Glanz, who's the founder of Talitha Coffee, who's buying up coffee roasters businesses. So it's cool to hear the two of them talk because Chuck talked about, you know, hey, it took so long to get up to the first and then the third coffee spot, Spurdrock. And then he's like, it wasn't, it wasn't a startup anymore. And so he stepped back actually and sold the business after three Bird Rock locations. And here is Mike coming in, buying three 1015 location spots now. So it's kind of cool to hear, you know, the differences in their style and what they both like and, and what they're both good at as entrepreneurs, what they recognize when it's their time to move on or just get engaged. So that was a cool conversation. And then we Had Sarah from Fashionphile. Sarah Davis, the founder talked an amazing, amazing journey of where they've been. I know you and I got to know it a little bit a year ago when we did a tour of her facility. But hearing the story it hit, it resonated in a totally different way. I mean I didn't realize 25 years ago when she started it was just an ebay store she was doing for fun where she was just reselling super high end purses on ebay. This was before PayPal existed. So literally people were mailing her checks. Then she would mail like a Gucci purse in the mail and now they're doing 500 million in GMV. It's insane to hear to hear the story in between. So I hope you listening got a chance to hear Sarah's story because it's a pretty cool one. She, she kind of loves but also hates that no one knows that they exist in Carlsbad. Hidden gem if you will. But she's yeah, great storyteller. So that was, that was a great kickoff to the week. We then did a little Interlock Brevite supper club immediately after for about 15 founders, which was fun and that just set a great tone for the week. Down at Tijuana, SDSU had a ton of Aztec students out and about doing mentor hours with tech stars. Chase Fisher from Blenders gave a really cool talk with Jared Tolver about kind of the power of consumer brands and Nil right now and how and why they're doing stuff together with Blenders and the Aztec football and Aztec link. Which was cool to kind of hear an Aztec alum talking about, you know, working together again with his school. The downtown crawl I mentioned was awesome on Thursday and to bring, bring it back downtown, which we hadn't done since COVID happened, so first time since 2019 that sir was actually downtown. And then to close it all in was a heavy AI day on Friday at ucsd. I, I started I think with well, my Bio meets AI panel monthly event. We met at UCSD and then I had a, a conversation at 11am Just kind of moderating a panel and it went throughout the day, the Design and Innovation building and really ended on a super high note with the founder of Qualcomm, Irwin Jacobs, doing a really cool fireside chat with Cheryl Goodman. Man, the guy is sharp. He's still at it like such a. Gave an hour long talk, stayed around after and talked to people. It was, it was a great cap to the week. So I'm already excited for next year. We are a little tired, I would say in a good way. But kudos to Lisa, Ella, Erica and the whole team for just an amazing week. We really appreciate all of you for what you do to bring us all together for year 12. So really fun. You might hear in our voice that we're still kind of coming off the hangover here, but really fun already. We've talked about the fall being busy. Monday night, Spencer Hutchins organized his quarterly health Tech founders and funders event at Patient Partners office in La Jolla, which was really fun. Got a actual in person with Mike Kren. Him and I also don't get to see each other much, much like you and me, Fred, just because we're out in our own, you know, doing our own thing. So it was cool to see him and the Plug and play team was there and then a whole bunch of startup founders in the health tech space at that beautiful office. So we're already kicking off the week going I think right now as we're recording, Hussein's monthly North county meetup is happening right now. I think he's trying to crack the 200 mark. So we'll hear if they did it or not. But yeah, it is hot and heavy on events and we're probably, probably at a crescendo now. Probably will start to taper off as we have towards Thanksgiving and we'll talk about some upcoming events here in a second. But we got a bunch of other news going on, some fundings and I'm sure you'll hear a few more just up till Thanksgiving and then it'll get quiet again, I'm sure on fundings through the holidays and then a bunch will be announced right after the new year. So why don't we kick it over funding straight? You want to. I'll just turn over to you. I'll add some color on a few of these.

Yeah. So I would say the big thing I'm seeing on the funding side, you know, the first half of 2024, we saw very few tech financings. And going into Q4, I'm starting to see that pick up a little bit more on the tech side. We have two tech deals to run to share with you guys today. Wildfire Systems raise a series B funding. They raised 16 million. We also have another tech company called Serenity EHS. They raised a 5.5 million. Wildfire Systems has continued to grow and find success. I believe they create software platform for rewards and loyalty like a loyalty loyalty platform for brands. And it was founded by a former ebay executive Right here in Solana beach and they've been around for a few years now, so it's great to see them continue to grow. I think Intuit Ventures and Mucker Capital led that round, so it's great to see some local SoCal investors on the cap table. And also Serenity EHS. I was wondering why I haven't heard about these guys, but I actually remember Brittany Myling, who used to cover the tech scene at the Union Tribune back in 2019, did a piece on them when they raised the seed round. The headline was X ServiceNow employees launched tech startup Serenity EHS founded by former executives. And so they just raised 5.5 million. This is really cool because we see big companies like Qualcomm and some of the senior executives spin out their own companies. And so I'm seeing the same thing with ServiceNow. I'm going to reach out to them to find out more about what they do, but it's just good to see overall tech financing pick up. We also had some grant funding I think we talked about in the previous podcast, but there was three companies that received funding from the dod, Allogenesis, Celebrity and Orgo Bio, and they're focused on bio industrial materials for the government. So it's great to just see that companies are able to get more capital during a pretty slow, slow downturn. I'm talking to a lot of bankers and investors and they're saying that the IPO market is still, you know, closed and frozen. They don't expect it to open up until the second half of next year. So some of this funding, some of the fundings are, will still be kind of tough going to the tech founders. I know you're talking to some folks, Neil, about helping kind of close some rounds and you know, it's definitely still tough out there, but you know, there's still some companies who have found traction and they're able to close additional funding.

Yeah, there's. We're noticing on our own portfolio, you know, people have been out working to get the term sheets for a bit now at the series A and B. It's tough on the precedent seed. We're doing deals pretty regularly. I mean, we've got two closing right now that we're participating in that I would say are pretty hot. So it feels like it's very dependent on, you know, your relationship to the capital. Have you had long term relationships with VCs or are you just kind of starting from scratch right now and just trying to find that? And that seems to be the difference that's always been the difference I would say if closing around quickly or not. And you know, it's really are you capital connected? So to the founders, make the time to make the relationships with the investors first before you just, you know, send that, that blind email saying hey, will you invest? It's going to be a long slog if you're just doing cold outreach for funding, that's for sure. Let's talk about some deep tech that's happening. Nuclear power has been making kind of international national airwaves lately from Microsoft and Amazon. Both making some big investments in in nuclear power for data centers. I hear Three Mile island getting reactivated and some others. There's this massive deal, a $900 million Series A for power fusion up in Pacific fusion up in the Bay Area on the nuclear front. And that's a good sign for San Diego as well, which actually has some really long legacy in the fusion and fission space both. At ucsd I was an undergrad. I know there was a center of excellence for fusion and then General Atomics. It's got a deep history in this space. And so, you know, I think this is another chance for us to shine here. We also have like a nuclear power plant that has kind of been in the. Been getting turned off. This might be a chance for it to get turned back on. With San Onofre, which I know is. Is being talked about how, you know much about how General Atomic is benefiting from the. The new nuclear news.

Yeah, I was wondering the same thing. I know Brad Grace has covered General Atomics fairly, fairly well. Also Plug and Play Ventures. They had the head of finance speak on a panel about how, you know, they're doubling down on a few different initiatives. The Union Tribune has a piece talking about how they passed a pretty big milestone, how nuclear fusion energy can become a reality. And I haven't had a chance to really dig deep into it, but I just know General Atomics is one of the larger players in the defense space. And so I've been hearing a lot about not only data centers but also like nuclear power. I think Amazon also is doubling down on nuclear power. It's a trend that is continuing to grow. I'm not sure the whole details on it. What are your thoughts?

Yeah, so look like fusion specifically, which is what General Thompson working on. So they have like a few center of excellence. Yes, they've been doing drones, but they also have this whole kind of energy sector as well, which includes fusion electromagnetics. So they actually build a new launch pad for the carriers instead of Steam, it's actually electromagnetic launch and then fusion which is this huge research center called D3D. And they just hit their 200,000th re experiment on it. They call it a shot. So actually every time they, they take a shot in terms of trying to split atoms and experiments. These are happening right here in San Diego, by the way. Like we're actually, there's a lot of people who are, you know, doing, doing, been doing nuclear experiments way out in the desert. This is happening right in San Diego in our backyard. This is something that, you know, fusion specifically they talk about in the article. It's always 30 years away. It's something where creating the perfect energy source is just always way out there. So it's been a research experiment for forever and the goal was to turn this into a commercial viable product. And that's, that's really what they're working on. So you know, I would. What, what the hope is in this article highlights is that with this new renewed investment, private investment into nuclear, the hope is that this will go from research to commercial viability. And so just the fact that there's 700 researchers right here in San Diego specifically working on fusion means that when there's talent pool density and San Diego is great at deep tech and hardware tech, this should be an area that we should be looking at. Actually I actually caught a webinar this morning as well that Larson from Harpoon Ventures was doing and he was interviewing one of his portfolio companies who has, who is doing nuclear power. So it's definitely an area that is getting more investment interest and it would be great for us to, you know, continue to put a spotlight on it. I am actually, I'm right now curating the content for Techcon SoCal and I'm going to have a deep tech panel or deep tech track and one of them explicitly will just be on nuclear. So keep an eye on that. Techcon SoCal is happening in January of 2025. So this is an area that I definitely am interested in focusing on just because of how much headlines it's getting right now. So we'll report more as we hear more, that's for sure. You definitely hear us talking about a lot about energy, battery tech and solar. And actually why don't we just jump to another solar or energy conver deal. I'm going to skip one here real quick, Fred. Empower out of Carlsbad. They have been working on space based solar panels. Kind of a new generation of them. You know, solar panels been powering space space vehicles since 60s honestly but you know, Empower specifically kind of has a.

New.

A new investment if you will on space based solar and they landed a pretty big deal with Airbus that the giant aerospace company out of Europe. And so Kevin hell CEO there just kind of came out. I feel like they've been in stealth a bit with this big deal that kind of came out. Have you been following Empire at all, Fred?

Yeah, I actually covered Empower when they first moved to San Diego from very small town. Empower came from like Albuquerque. They were focused on creating solar energy like materials for satellites and other industries. So yeah, they landed a pretty big contract with Airbus. Sounds like it's a multi year deal actually connected yeah the CEO to the business journal and they did a nice piece, recommend checking that out. But yeah, they've been around for some time and it's awesome to see the growth and kind of like the, the space, the spacing. We always see SpaceX and you know we have obviously have bias at here. We also have some smaller startups that are also serving the space industry and I would say Empower is one of the top companies locally that serves in the space.

Yeah, it's another area that I hope to focus on during the deep tech trek. Space and energy in that regard as well too. And I think Kevin is scheduled to be on a future podcast coming up here shortly here on the Tacos and tech podcast. So listen in for a deeper conversation around that. Speaking about some other tech companies here. Sochi, which we just talked about hitting the 100 million error milestone, just hired a new CFO which is always a good sign, especially once you hit that magical 100 million dollar mark. It's usually when you're starting to make an inflection point towards, you know, what's the long term future here. Are we going for IPO or bust or M A you, you follow this, this hiring here, Fred?

I did see that, that was, it was a good, it's good news. I'm curious if yeah, any, any plans to go public once the, the markets open up? Yeah, I think they have about 45 employees locally in San Diego. They have 70 employees around different other tech hubs and this new hire is C suite. So yeah, it's great to see, see the movement and we like to track you know, who's moving around what company. Also saw another early employee at Drata move over to another tech company, Sarah and you know there's a lot of movement in the market. I'm seeing early stage, early employees move on to new gigs and it's pretty common in this harder space.

It is, yeah. And specific associate CFO hire, he's got some big tech experience being at Su Info Pantheon most recently. And you know that's kind of what you start to see is these companies. Sochi by the way has been around 10, 10 plus years. I think that we were in EVO Nexus together 11 years ago. You know this is where you kind of bring in pretty different talent. You even question are they still called a startup anymore at this point. Right. It's a scale up or even like is it growth stage really all these kind of naming conventions come to mind. So we want, that's what we're trying to do with our companies. We're really trying to level them up and catch up to the incumbents. You got to do it like so fast. You got 10 years to do what you know your competitors have been doing for 30 to 40 years. Especially in. Well I don't know if Sochi's in that space. They're, they're specifically like enterprise social media marketing platforms. So social media has only been around maybe 20, 30 years but still they, they got to catch up and beat what the everyone else is using incumbent wise which may be just direct push to Facebook. Well this is a whole platform to power everything for you there. So keep your eye on, you know, just one hire usually means that the company's at a trajection point here that is, is worth watching what they do next. Let's just talk one, let's talk some real estate here. There's been a property in the Tory, what is it called, the Tory Hills area that's been under development for a while that just did a ribbon cutting. So it's a breakthrough properties that a beautiful space. If you haven't gone there yet, it's, I think it like has kind of a. What do they call this soft opening. Over the summer I went and worked from it a few times. Have you heard of this, this new breakthrough property that's just coming online here? Brad?

Yeah, they actually just did a big ribbon cutting I believe a week ago or two weeks ago they had, the mayor was there pretty close up. From ucsd you have the CEO of Breakthrough Properties, his name is Dan, who lives in la. It was a pretty big, pretty big deal. All the who's who in the life sciences space was there a lot of service providers, real estate folks. It's huge. I think you shared with me Neil that this space is 100 leased. They're still kind of, you know, showing, showing companies this cool office Space and I think, you know, there's just so much happening and Carmel Valley and Del Mar and Sorrento Valley, there's a lot of momentum building up north. You know, I hear a lot about how downtown is the next, the future of life sciences. But I think with this grand opening, I think it's still going to be, you know, this Torrey Pines, Del Mar, La Jolla cluster for life sciences. And Breakthrough is doubling down and they have a great team that's, you know, hitting the ground running. I'm hearing they're doing things differently. You know, they, they really give that white glove service to tenants and people who are looking to move into, you know, class A building space.

Yeah, Susie Harboth is really kind of the brainchild here and she is a serial biotech properties builder and not just like build a building, but build an ecosystem and a community around it. So she previous, I mean deep in her background is, is actual biotech that she's built biotech companies and then she went on to do Launch Bio Co found Launch Bio and Bio Labs. And these are not just properties, these are ecosystems for companies to at all different stages build and grow into. And that's kind of what she explained to me is kind of the same thing that's happening through the Breakthrough Properties, this new one. But they also just across street have another one that's like kind of collab space as well too. While this new property has got some of the biggest like Pfizer and others there too. So their goal is to really create a space for founders to grow all the way up within this kind of same portfolio of properties. Also in gorgeous views of the. What is that lagoon called? That kind of lagoon that overlooks Torrey Pines beach and Del Mar over there and a pretty badass bar and restaurant as well too. So I've been working out of it a little bit and actually the ARC Prize team is going to be working out of it over the next two weeks too. This is this global AGI million dollar prize to see who can best. We actually haven't done a feature on that yet. We should maybe in the next one because it's coming up on time for them to award the prize. But there's some people from arcprize based here in San Diego and they'll be housed over the next two weeks at this new Breakthrough Properties. So you might see a popup event that I might do with them alongside there as well too. That's our. Those are the news for the week stuff that we're catching. We'll have more next week, but definitely some events coming up. I'm doing an event with the IPOP AI team. This is a newer startup you probably saw on the Innovation Day. They had a big splashy event there. And it's two serial founders, Brad Chisum and Andy Ballister, who are building this platform for Vision Tech. So it's kind of like a. It's almost like a no code platform for Vision Tech. So if you are doing something in the Vision Tech space, ping me and I'd love to invite you to this workshop. We're doing really kind of democratize a set of tools for anyone doing Vision Tech. It should be super cool. So November 5th we're doing that. I've got a few other events I'm doing in the gaming tech space coming up over the next few weeks. But first this Friday is the San Diego Founders Hike. So we've got a brand new location just a little bit down the beach at this, at the Torrey Pines Glider Port. We've done a few test runs of it, so it should be good. Parking is even more accessible though. It's a little bouncy on that dirt road. But we're gonna have a good time this Friday and the first Friday of each month, which should be good. Plenty of other events coming up over the next month. I will give an early shout out to early December. We're doing Tech the Halls, a holiday dance party which should be really fun in a warehouse up in Carlsbad and then way out in the distance. I've mentioned this a few times. Techcon SoCal is coming up in January, which we're already starting to organize the panels right now and the other events on your radar right now, Fred, or you just. Just catching up from the last few weeks?

Yeah, I would just say check us out on socials, on Twitter, on LinkedIn. We're pretty active on sharing cool events. I think UCSD is hosting an author. He's a former VC. I think the book is called Breakthrough Patterns or can't remember exactly what it is, but we definitely link it in the show notes Mike Maples.

He's a current vc. Yeah, yeah, he's still, he's still writing checks. It's definitely a good one. Greg Horowitz bringing him in town, which will be awesome. You know, Mike actually is the son of a famous Microsoft early executive and Mike Maples Jr. Is a founding partner of Floodgate Ventures, which is a really active investment firm in the Bay Area as well too. They're early investors in like Twitter or Lyft. You know, a few of these that you've probably heard of. But yeah, it's October 31st. We'll see you all out there. Make sure you follow Fred on his socials, follow his substack, the Business of San Diego substack and follow me on socials. Most. We're both Most active on LinkedIn and Twitter. And I've got the Fresh Brew tech substack. Thank you all for tuning in, sharing this, and we'll see you soon. Thanks, Fred.

Thanks, Dale. See you next time.

Absolutely.

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 need tacos in Techies on smash for the green guacamole keeper Captains 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 staying in puesto lucha libre and sombrero Gotta shout out to 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 within reach we interviewing founders who be shooting for the Moon Hat 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 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 in tech, you know we got it, hey.