This Week in San Diego Tech News - August 26, 2024

Hello. Hello, everyone. Welcome back to another episode of this week in San Diego Tech news with your favorite San Diego besties, Neil Bloom and Fred Greer. I'm Neil Bloom run Interlock Capital and Fresh brew tech and tacos and tech communities for connecting the San Diego tech ecosystem. And this is my co host, Fred.

And I'm Fred Greer, startup reporter in San Diego writing about the fast growing companies and the investors that back them.

Startups get 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 border 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 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 in sombrero gotta shout out to 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 est be full of hustlers from couch surfing to penthous right on the beach. Tech leaders 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, we are excited to be back with you. Summer, as we've been talking about, has been in full swing, but hasn't really stopped in San Diego. Tons of events, tons of news going on. Funding's a little down, as you wrote in a recent article, but that's okay. It goes in ways, it's seasonal. We're writing checks. Was working just before this call, was working on a new deal memo for a new investment. We're making interlock in a local San Diego company. But let's dive into some other news. We've got patient partner, a local San Diego startup kind of in the digital health space. Raised a fresh 3.5 million in funding. Congrats to the team there. Patrick and George, what's the story that you've got here of this raise? Fred?

Yeah, so they just raised 3.5 million. This is kind of under the radar, hasn't been announced yet. I've actually reached out to both of the co founders to do a deeper dive piece. But yeah, they're a health tech company based in La Jolla Cove. They actually rent out or lease space. A former consumer company called Pura Vida. They have a really great spot, overlooks La Jolla Cove. But essentially they've created a platform that connects patients to I think other folks who've experienced similar, you know, health care issues and so they can connect directly and learn kind of more about procedures and you know, basically have support as they, you know, deal with their like different health issues. So they created a platform connecting yeah, patients and, and folks who've previously had a similar symptom or, or issue and they're able to, you know, find support that way and they found success. I think they partner with, you know, different health healthcare partners. And yeah, just this funny news is for them to kind of continue to grow their team. I believe they're less than 10 employees but they're one of the, you know, one of the many health tech companies in San Diego. Neil, you are pretty close with the co founder so you probably can speak to exactly what they do and you know how long they've been around.

Yeah, I was just actually looking back how long ago we met, I think it was actually during COVID we met or maybe just before when it was just the two of them. We we got connected through another mutual connection in town. They were renting out space and I think and we work downtown when we met and yeah, it really was both of them experience in more of the biotech medtech world where they had helped get medical device or other healthcare related software to actually get utilized or not software, sorry, like actual hardware. And what they found is after say certain surgeries or certain treatments, you know, maybe you got like a paper of here's what you need to do after treatment from the doctor. And there was this huge drop off of people actually going through the treatment and doing it right or well. And they discovered that you know, if there was a community to talk to, almost like reviews but live community to chat with people who may have just gone through say like a knee replacement and you can be like hey, tips and tricks like anything else I should need to do. So that's kind of where the original genesis started and it's grown from there. The whole point is to get full utilization of treatments obviously and theoretically doctors have more successes with their patients and kind of a Whole better experience for the patient in general. So really cool to see it continue to grow. They've been lean and mean. I really, I think this is only their second race, maybe second or third. Kept the lean team. They do have a gorgeous office. They're actually right there next to also that same building. Who's there? Blueprint equity is right there as well, as was Paige behind Genius Ventures. All were right there on the same floor, which is pretty cool to see downtown La Jolla there. So congrats guys. Keep up the growth and keep making impact in helping patients actually have good outcomes. That's for sure. Let's jump over to another story here. A new hardware gaming startup launched really under the radar here in Carlsbad and it is got quite the name behind it. Fred, you want to talk about this the story here?

Yeah. So I actually got one of this story back in May, local company that was being incubated in I believe Evo Nexus gave me the tip that there was a gaming company being started by former Oculus founder Palmer Luckey. Palmer Luckey sold his company Oculus to Facebook I think back in the early 2010s for over a billion dollars. He's also the co founder of Andrew, a defense tech company that's raised billions of dollars. So now he's doing something else. He's teamed up with I think an employee at Andrew to start a gaming company. He launched a kind of gaming handheld device similar to Game Boy and I believe he's partnering with a local San Diego company to manufacture this close to home. So Neil, what do you, what do you have on this, on this news?

Yeah, I've been hearing about this for a while. I've been keeping under wraps based on C comps sharing who are the design and manufacturing partner, also based in Carlsbad. I actually went down to see comps ribbon cutting opening of their plant in Tijuana and saw the mod retro devices being produced which was pretty cool. So they're being designed, engineered in Carlsbad, manufactured in Tijuana and then sold abroad.

Super cool.

This is really, you know a story by the business journal here that shares how this is Palmer's just really just like tribute to really the original Game Boy. We just loved it and felt you know, it's completely out of, out of stock, out of service and bringing it back for OG gamers in that regard. So one tip of the hat to getting another consumer hardware company off the ground. But also gaming in Carlsbad is really relevant. There's a lot of studios in Carlsbad and now to have another one added to the list here and being produced both the physical games. I don't actually know that part if they're producing new games or licensing Nintendo. Do you know that answer Fred?

I'm going to find out. I'm curious on that as well.

Yeah so and I think it's completely self funded I think to date not taking outside funding but worth watching and definitely worth adding to kind of the San Diego gaming companies here in town. Speaking of Santa companies and notoriety, the Inc 5000 list came out, always comes out around mid summer. A lot of San Diego companies mentioned on the list. Do you want to go through some of them here with us Fred?

Yeah, so there was like there was like over 50 plus companies that were included on this list ranging from law firms to tech companies to professional service provider firms. We're just going to talk about the tech companies today. So the ones that stood out to me was Wildfire Systems. They've raised not raised but they were in the top. They placed in the top 100 out of 5000 which is pretty big. Truvada which is a fintech company Shield AI which is defense tech or work is which is more I think software as a service a zip dev not really a tech company but they work in the tech community. They ranked I think around 860. Sochi go share quartile Neil, does these names sound familiar?

Oh yeah, these are long standing some long, some newer standing companies here that have been growing, you know over time but this is a year by year list of growth so it's really more about how to grow over the last year. That's kind of how the ranking goes. So it's not about legacy, it's not about how much have you raised it's just where were you last year and where are you this year? It has to be self reported so and then verified so a lot of companies do say that they don't participate in this at times for whatever reason and maybe you didn't have great growth or you just don't believe in in rankings at all. So you know I, I definitely feel like I'm missing seeing some names that I'm used to seeing at times but it's year by year dependent on that year's growth. So great to see some of these like yeah like a Wildfire a newer I would say they're a newer they're about five year old company whereas like a cordial's maybe been around like 10 years and still growing in that regard. Shil AI obviously to see them, they've been around I think about 10 years. They raised a lot of capital this year and they're growing really fast. So all good things. Obviously want to see more in the top 100 but you know, it is what it is based on seasonality and year by year and how the economy is doing as well too. But great to see 50 plus companies named to this list for sure. Let's talk about a local investment firm, Tide Rock Capital. Tide Rock is a, I believe Encinitas, maybe Solana beach based investment fund, but more private equity. They invest in small and medium sized businesses or what they call lower middle market where they are investing specifically in business to business businesses that usually are like family office or like kind of longtime founders who've been running the business for a while. So they come in and acquire businesses. They've announced three investments that they've made in all kind of all over the place. A wholesale bakery, a electronics recycler and kind of an IT business as well. So three new investments from them that they are kind of pulling into their private equity model. They actually talk about in this article by the Business Journal how they've already had a few investments in some of these areas. So they actually are you know, getting power of combination of. I think they've got a few recycling tech, recycling businesses that they're able to combine now here as well too. What do you know about, about Tyrock and kind of their focus here?

Yeah, so I think you were correct. Yeah, they were started, I think they were based in Encinitas, recently moved to new office, really nice office in Solana Beach. I wrote about them 2021 when they raised 100 million to acquire additional business to business companies. So it's great to see three years later they're, you know, continue to follow through that mission. And yeah, they've raised money from family offices. High network individuals are kind of a holding company strategy, PE type style. They buy a business between I think 2 million and 7 million EBITDA. And yeah, they're pretty small. They have under like 20 employees but they're mighty. They're always, you know, growing, growing, growing from an investor standpoint. And you know, San Diego doesn't have too many of these growth investors. There's JMI Equity, their Seaside Equity partners, there's Tide Rock and there's probably a handful of others. And so I think this just showcases that hey, you know, San Diego does have some investors here and tightrock is one of them.

Yeah, especially investing in like local businesses. Or local to a market is is unique and not a lot of that obviously a lot of real estate investments funds around. But to see other business investors both whether it's minority or majority like like these guys are doing here is great to see that's for sure. And, and Ryan Petticore, the CEO is actually really involved in the community. I know he's an active YPO member and is very engaged in the community as well. So great to see just more capital available for companies here. First of all, I'll just make a note here we talk a lot about startups which are kind of a bet less than 1% of businesses. Most businesses maybe even have plans to be a gross from small to big like startup speed. Many end up staying small. And so just to see that there are other avenues for capital for the companies that don't beat billion dollar unicorns which at this rate we're getting, you know, one to two a year maybe just good to highlight that there's just other pools of capital for businesses that are growing at their own growth rate. Let's, let's end this on one last technology story to talk about. We actually if you've been following us for a while you notice we've talked we've noticed a lot of battery tech within the San Diego county area. Not surprising with the growth of EV and really just kind of alternative energies in general. And so a company, Kulr I think K U L R just got a new contract with NASA to use lithium ion pack battery packs on the Artemis rocket program which is a go to Moon and then to Mars program. And so to see just yet another battery tech company that I hadn't even heard of before getting pretty big customer if you will. NASA is a good sign here, that's for sure.

Yeah a few details add I think they're founded in 2015, publicly traded, their stock isn't too high, it's about 27 cents. And yeah there's a great story by Brad Graves at the Business Journal. We'll make sure to link that if you want to check it out.

Yeah, yeah, good to see. Good to know. I worked on Artemis actually 12 plus years ago. I'm more on the rocket engine side and to see you know continued contributions of aerospace companies here building towards it is is a great time. So great to see here related to that events coming up. We will we've always list what's coming up. We always mention it's gonna be a busy fall, a lot of September, October people just pack in the events before Thanksgiving. So get ready for that. But you just went to an event with Launch Bio I believe, right?

Yeah. So Launch Bio had a summer social last. Last week I went and got to meet a lot of folks in the community. Some people were service providers serving the biotech community. Some people like JLabs head of JLabs was there, James McKay from from Connect. It was just great to mingle and meet folks in the biotech community. They also had a panel prior like an hour before the social and I believe Grant short on from JLL and a few others spoke on that panel about you know what to seeing what they're seeing in the in the growth biotech scene which was a cool way to kind of engage the community and share and share notes. But yeah, what about yourself now? Did you attend any events last week?

It was busy last week for sure. It's almost a blur now. Let's just look forward. We've got the monthly Carlsbad Life in Action gathering. This month is Life Sciences held at Thermo Fisher, one of the larger big bio companies in Carlsbad or in Cassandra in general. Coming up within the week is the SD founders hike as well and that's always a fan favorite. I enjoy it as well too. Something we don't something just that have on your radar is that the next class of the San Diego of techstar San Diego powered by SDSU class is about to be announced. So I know they did a mentor dinner and shared what companies are there which I'm very excited about to see these new companies. So keep on the radar. We'll probably talk in the next episode of the companies that will be accelerating at SDSU from September to December time frame. Some other events coming up we've got Wharton Angels biotech panel celebrating kind of new and Legacy Luminaries on September 12th. September 16th. Evo Nexus Demo day is coming up which will be cool to see hosted at Qualcomm. Be good to see some the next kind of class of companies that they've been incubating for a while. We've got Dev and Data night meets CTO talks at seismic on September 19th. Be great to host it at Seismic's office in Del Mar area. You want me to keep going here, Fred?

Keep going.

So we've got a pitch deck workshop by probably one of the longest running local pitch deck designers. She's just always been on tap and on call. She gives probably 10 years of experience of helping people build their decks for them on September 23rd which is also the same night that the Carlsbad tech gathering for will be happening at Shipcom all before probably one of the bigger days of the year Connects Innovation Day September 24th. Huge gathering of tech companies big and small. Huge startup area of presence and big tech usually shows up as well too taking over Petco. So if there's one event that you've been waiting to go to in one day to meet kind of the whole ecosystem, I would put that day on the calendar for sure. That same week as the Top Tech awards where it's kind of a CTO awards ceremony. Should be fun. I've been going for years, really enjoyed it. They always kind of put out a pretty fun party, whether it's like ride in it. I remember when the first Tesla was in San Diego they had like riding a Tesla which was kind of fun. They've done it on the field at Petco park, they've done it at Del Mar Racetrack. Always fun venues and fun things to do there too. So come out and celebrate your CTO. I know I nominated a whole bunch of CTOs this year for it, so I'm excited to see if any of those those people won. And that's just September. That's just in our on our radar. Make sure you go and check out all the events going on through at any time. Usually my first look is the Social Coyote where you can subscribe and get it on your newsletter Newsletter every Monday in a fun local voice by Jonah Peak. So plenty to go on and we look forward to seeing you out there, that's for sure. Fred, always a pleasure to do this with you. Thanks for the time and for covering the ecosystem. Make sure you are subscribing to Fred Substack at the business of san diego.subsack.com and as well as freshbrewtech.subsect.com so you can get these podcasts in your inbox and in your ears. Thanks again for listening. Thanks Fred.

Always a pleasure Neil. See you next week.

Cheers. Likewise.

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 tacos in techies on smash border green guacamole keep accountants counting beans Contador quentan three holies 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 coast Angels by the ocean watch the sunset La Jolla shores Entrepreneurs trying to get funded when Cindy San Diego startup week is popping in the summer Oceanside to Tijuana est Be full of hustlers from couch surfing to penthouses right on the beach Tech leaders who believe stars are within reach we interview and founders who be shooting for the Moon SD TechOS with your host Neil 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 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.