This Week in San Diego Tech News - April 15, 2024

Hello, Hello. Happy Monday to you all. Neil and Fred, back at you. Hey, Fred, how you doing?

Hey, Neil. Happy Monday. Got to be back and doing great. How about yourself?

Doing all right. Recovering a bit from a trip up to Santa Rosa last week, where I was joined by all of the economic developers for cities in this whole state of California, getting to know more of what every city is interested, especially in attracting businesses to the community. And we had a lot of the San Diego cities with us, especially the north county cities they really represented. It was cool to see such a strong group from Oceanside, Escondido, kind of the Innovate 78 region. They showed up and supported each other. We spoke on panels and they won an award. So it was cool to see San Diego representing up in NorCal and also just kind of touting how as a region, talk about bringing companies to your neighborhood. And while it may feel competitive to go to one city or another, like, this region is super collaborative and bridge building, which is the vibe we know here in San Diego pretty well.

Yeah, I love that. You know, I think travel is back, you know, from LA to Santa Barbara. You know, it's great to see other ecosystems collaborating with each other and sharing knowledge. And it's just, it's. It bodes well for the region totally.

And we got some events coming up where I know we've got people traveling into town to San Diego, so we'll get to that in the stories. But we got a ton of news to talk about here. From startup to big tech.

Startups get the party, startups get the party started. You want tech in tacos, tacos in tech. You know, we got tacos. And tech is on smash for the green guacamole Keep accountants counting beans Contador quentan frijoles Founders trying to raise some queso la vida San Diego school of rappy rapping paella tortillas us 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 taco standing puesto lucha libre and sombrero Got a 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 to Tijuana St. Be full of hustlers from Couch Sur 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 hashtag SD TechOS with your Host Neil Bloom.

Come on.

Startups get the party. Startups get the party started.

Welcome to the Tacos in 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. Let's start at the, let's start at the top. Let's start at one of the largest San Diego based companies here, Illumina, probably one of the largest by market cap in the genomics space in San Diego. They've had a challenging few years. They tried to acquire Grail, which was a spin out of their own company and it was blocked at the FTC level of stopping them from acquiring and being cornering too much of the diagnostic market. So has some changes to leadership and they're announcing some new hires here. So what do you, what are you hearing here from the new exec hires here, Fred?

Yeah, so Illumina, you know, they're really reshuffling their leadership positions. They're bringing on a new chief financial officer, I believe his role starts in the coming weeks and they are reporting their financial results in May 2nd. You know, obviously with the, the FTC blocking the acquisition of Grail, Illumina and their board has been trying to figure out how to navigate that situation and a lot of senior executives have left. I think I read a headline that one of the executive team have joined a smaller biotech startup and so they need to find new talent to kind of steer Illumina through this dark period. I think they'll be fine. Illumina is a leader in their space and they have some of the smart talent. So really just gonna be watching closely to Illumina. It's, it's good that they found other folks that they can bring in, but you know, they're still very much in the midst of trying to navigate the challenging year that they're in.

Yeah, I mean it's interesting to, to have watched their rise, but also to watch the spin out of talent. I have noticed a ton of former Illumina people all the way from execs to, you know, individual contributors spinning out and starting genomic related startups too. So I look at as Illumina as almost a little bit of an incubator of for genomics, for blank or for X. You see, I see a lot of that, which is interesting. And so it'll be interesting to see, you know, the new leadership and how they move the company forward in that regard. And either they're looking for New revenue lines, which is what they obviously were trying to do with Grail going from not just a hardware and software powering research institutions, but also offering a diagnostic kind of a whole new service. So I would imagine this is really about, you know, increasing and diversifying revenue as well. And that'll be interesting to see if they keep talent within that may have spun out to start new things. So we'll keep our eyes on that. In general, the economic environment has been interesting. We've seen some, you know, M and A, especially on the biotech side. We've seen a few IPOs where we feel like maybe the market and the window is opening for iPodOS. And now we're starting to see our own unicorn. So billion dollar plus valued companies starting to make acquisitions of their own. So we've noticed a few, you know, software hardware companies making some acquisitions here. You want to take us through some of these, these acquisitions of our own companies acquiring others.

Yeah, so the first, the first one to talk about is drata, which is a unicorn compliance tech company that was started I believe a few years ago and they're based in San Diego and they just acquired a company called Harmonize IO, which is a kind of AI company that's doing interesting stuff. Compliance DRA has grown tremendously in the last few years after getting its unicorn valuation as well as Showed AI made an acquisition of Australian called Sentinent Visions Systems. Showed AI is also a unicorn company in San Diego in defense tech. We talked about them on a previous podcast before and so right here, Neil, you can probably speak to this more. But you know, we're starting to see things heating up. Smaller startups, large startups are looking to acquire and to grow. We're seeing that also with biotech as well.

Yeah, I mean it's interesting to these two companies side by side, even compare them. So Drata came out of stealth January 2021. So that was kind of their first pre seed raise, if you will. These are my former, actually co founders of a previous edtech startup that we did, Portfolium. And the company portfolio was sold just at the start of the pandemic, actually a year before. And the team of Drata, you know, over the course, honestly within a year and a half raised more than 300 million in funding over four rounds. So exploded out of the scene super fast into just growing and scaling into the cybersecurity world and you know, now are buying up both tech and revenue in a sense to keep scaling because they really got to grow into those valuations that they Raised at kind of Peak, Peak VC World Landscape 2021, 2022 time frame. So they're growing, you know, they're buying revenue or buying tech to increase revenue there, which has been interesting. And then S.H.I.E.L.D. which has been around way longer, like, like 10 years at this point and has raised, you know, we just highlighted their 500 million dollar raise just in December alone. I think they've raised you know, on equity alone probably over 3,400 million now in funding but over a 10 year period. And so you know they've had a time to. And they're a defense tech company which takes a really long time to get contracts with the DOD in that regard. That's kind of like your sole customer in a different branches. So it's interesting just to see two companies that are kind of valued similarly now but have very different backgrounds and histories and growth track records looking for you know, buying up market share or buying up tech. It's pretty much what's happening. So you know, I think we're going to see more and more of these story lines on the tech side I think we'll see both our startups who are struggling or you know, need an aqua hire get tucked in and you know, rather than just going out of business, M and A is absolutely an opportunity to kind of keep the brand or the business or the team working on the things they're building or if you're on the upper end, growing really well but need to grow even more looking for tech and startups to as well. So yeah, I think over the next year or two we'll see more and more of this M and A conversation going on. Let's move over to some raises. So platform science, this is one of the leaders in logistics tech raised a $125 million growth round. I believe this is a Series E, right Fred? Yep.

Yeah, it's a growth, growth capital and yeah, platform science. You know, luckily I, I was able to break the Scoop. They raised 125 million from both VCs and strategics and Jack Kennedy was actually speaking at your conference, the Interlock Capital Summit last year. And so I actually got to pull some quotes from that conversation. As you know, I think he was sharing with the audience that he was on track to hit I think over 100 million in revenue and they've grown tremendously. I think they weren't even trying to raise capital at that point but because of their success they're bringing more additional cash to grow their business.

Yeah, logistics tech is a really interesting sub segment of San Diego we've, we've got big tech like Walmart Labs having a big engineering team here at some point powering kind of internal engineering for Walmart. So like logistics of their fleet and even in store routing and mapping. Got Amazon having a big engineering team here also working on the logistics tech part of Amazon Delivery and Amazon Fresh. And then you get into, you know, there's a Qualcomm spin out that was Omnitrax that Jack Kennedy actually spun out of Qualcomm way back in the day and sold it to Vista Equity. And then Jack is back doing platform science which is a software play for big trucking. So in a sense it's kind of both, not just fleet management but it's what he would describe as the app store for the truck. So imagine all these different kinds of sensor tech and other things all live through software connecting these big rigs through to platforms and they are the software layer where you can download your, the app for the rig to connect to whatever service you're using for that. So it's been really interesting to watch them power through. An interesting insight is like the physically where they are. The street that they're at in UTC I would say is like logistics tech center, like Litics is on their street. Naron is also a logistics tech, I think it's an in cab video software company and Apple is on their street too which obviously does a bunch in maps and other logistics tech as well. So it's an interesting density of late stage logistics tech company right on the street that they're at. So glad, glad to see them doing well and growing and we'll continue covering logistics tech world because I think it's interesting and Fred and I will probably talk about a upcoming tour we're doing in with another logistics tech leader coming up soon. So a little tease off that you want to take us through the next raise here.

Yeah, so the next raise is an IoT company called Trident IoT. They raise a 10 million seed round and that's a pretty massive round for a seed company. Just came on my radar recently and so I'm looking to learn more about what they do exactly. But it seems like they're creating silicone, they're a silicone provider and our RF technology company and you know San Diego has a few IoT companies. One that comes to mind is Williot and they raised I think over 50 million in funding and they do similar in the similar space with IoT and RF technology and so yeah, it's a pretty good fundraising soup. I Think the story here is tech funding and IoT funding and you know, logistic techs is picking up Biotech really, you know, took the first quarter, it took I think over 80% of the financings and now we're starting to see some, some tech finances in Q2. So it's, it bodes well and I'm looking forward to learning more about what they do.

Yeah, with Trident, you know, they're kind of at the chip level in terms of building, you know, wireless connectivity, but at, you know, at the chip level and it's for other industries besides mobile. And I think having such a density of Qualcomm for handset for so long, you've seen Qualcomm diversify and like you mentioned Willia and others people diversify into making more connected dev. We see that in a bunch of our local med tech devices. So like from a Tandem Diabetes and Dexcom doing connected Diabetes tech and Wiliot which is actually doing connected tech for clothing, which is really interesting. They do it in the retail space, they do connected devices there and then Trident as well, which is kind of building at the base layer, trying to make another chipset and chip stack to plug into more devices more of the time. So they're up there in North County, Carlsbad area, but you can imagine within the San Diego region and Southern California in general, there's a ton of talent for connected deviceware here. So that'll be interesting to see and see where they're going. Another interesting kind of sub ecosystem worth watching is kind of our clean tech or energy tech sector in San Diego. Kind of the battery tech actually ecosystem is really interesting. Carlsbad has an interesting hub specifically in battery tech, especially lithium ion. But across San Diego in general there's a bunch. And so while one storyline initially came to mind for us around this company called Zap, which is building battery technology for more universal adapters in the fast charging side of ev, which is really how we're going to get massive adoption is faster charging times. Right. Like no one really wants to sit for an hour at a quote unquote gas station. Right. So seeing Zap tout a new battery technology in Carlsbad one doesn't actually surprise me where it's at because we've got, you've got American lithium energy, which Ale, as it's known, doing a whole new internal component design for lithium batteries specifically you've got Smartville, which is another battery tech, more for battery for energy storage, but also I think in the lithium side also in Carlsbad and you've got Aptera, a whole new vehicle using lithium ion and solar for a three wheel one person vehicle also in Carlsbad. So it's been interesting to me to kind of watch the kind of buildup of battery tech and applied battery tech in Carlsbad. Anything comment on that, Fred? And just kind of the clean tech, battery tech sector that you've been watching.

Yeah, I mean Aptera is one of the cooler energy clean tech companies and they created like a three wheel vehicle and the reason why they've been building it in San Diego is we have the most sun than most cities. And so I think that's why we are seeing a cluster of companies in Cleattech Talent. The opportunity here is growing. I think there's several events. Carlsbad is hosting a clean tech ecosystem event on April 29th and there's also a clean tech showcase on April 24th. And so if you're involved in this space or looking to learn more, there's plenty of opportunities to get plugged in and learn about who are the key players and who's growing and you know, doing interesting things from vehicles to, to batteries to, you name it.

Yeah, yeah. So we'll drop some links here in the show notes. We'll also make sure the Social Coyote has these events as well too. So they're listing them and sharing them. But yeah, a lot of clean tech and battery tech events coming up. We're talking about, I think even I think Aquileus is doing a clean tech symposium either in May or June as well too. They just did a sustainability symposium but they're doing a separate clean tech one coming up here as well. And so that takes us through. Oh no, that's speaking of events, there's a big event happening right now ASU gsv which is one of the best ed tech events happening around the world. Honestly happens in San Diego and I was, I used to go when I had the EdTech company. It was used to be in Phoenix, Scottsdale and they moved it to San Diego back in 2015 and they've been doing it ever since. And honestly I've never seen for edtech a bigger gathering of CEOs, investors and great speakers. Honestly. I mean I saw like former President Bush, former like former presidents, Magic Johnson, like people who legendary in, in who they are but also speaking with passion to changing the world through ed tech. So that's happening right now which is pretty cool to be happening in, in San Diego. Have you been to it before, Fred?

I'll be this. I'LL be there this year. I mean it's going on until Aug. April 17. So yeah, it's one of the biggest conferences in ed tech. As you mentioned, a lot of CEOs investors will be here. So if you're looking to network and meet some influential people, check it out. There's another event that might be worth checking out hosted by venture capital firm called Crescent Fund on April 17th at UCSD. They're bringing together three San Diego companies, Drata, the one we mentioned earlier, Nanome, which is a VR startup, as well as events.com and this event is also sponsored or they're bringing in speakers from Menlo Ventures, Slack Fund and Lower Carbon. And so this is an opportunity to, you know, hear from some of the best founders in San Diego as well as some investors. So we'll link that in the show.

Notes what I love about that, by the way, Crescent Fund is a student only fund like this is Dylan locally who I think is an SDSU student and it's Southern California students who are running this fund. Every year they pick new general partners to run the fund and here they are pulling together a great group of speakers. So out to Dylan and the Crescent Fund team for putting on an event like this and running a fund while being a student like that's super impressive. At the end of this week on Friday I'm doing my monthly get connected to San Diego ecosystem. So if you are new to town or working on something new, join virtually on the roomie platform where we connect people within three minutes. Intro what you're working on, where you can, where you need the most help and we will connect you as a community there. Speaking of other impressive students, the Alternative Protein Conference is happening a week from today at sdsu. This was started by a undergrad Justin, just incredibly passionate about alternative proteins. Got SDSU's Good Food Institute to back him and put on a year ago one of the best conferences or so specific on alternative proteins like and CEOs of Blue Nalu, Lou speaking and, and some of these others. And they're doing year two and come back for it as well too. So I'm just impressed to see the gap, the, the you know, energy of these organizers who are putting on great events, great topics with kind of a niche focus and getting great speakers at it. So if you have an interest in the alternative protein space, come out April 22nd. I'll be speaking there on a panel just kind of talking about highlighting just how Interlock has looked at some of these since we have invested in impossible foods And Blue Nalu and Mercado, which is all about kind of getting healthy foods to the most in need. So I'll kind of highlight a little bit of that and then around food as well. Escondido ag X gathering, April 23 is a gathering of kind of the food ecosystem all the way from soil to. To your plate through recycling. We're going to have a panel conversation of kind of the life cycle of food and where the innovation opportunities are. So that should be a fun1 on April 23rd. And then Fred and I are collaborating on San Diego founders FinTech Lunch, April 30. You want to take us through that event, Fred?

Yeah. So essentially, you know, we're really just gathering fintech founders and funders for a private gathering over tacos. A number of VCs are going to be in town for cool companies event during that month. And so this is taking place on Tuesday, April 30th. And, you know, you know, reach out to us if you're interested in learning more, if you're in the fintech space or investing in that space. And thanks to our sponsors, Gunnerson and Sequoia One for the partnership.

Yeah, a lot going on over the next few weeks. So excited to see you all. And Fred, excited to collaborate with you as always. So thank you.

Always a pleasure, Neil.

All right, see you everyone.

Tacos, Tacos in Tech, you know we got Tacos in Tech is on smash for the 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 coating yoga posse fold the body origami we be surfing Coronado eating tacos El gordo the taco standing puesto lucha libre and some 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 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 interviewing founders who be shooting for the Moon SD TechOS with your host, Neil Bloom. Come on, startup, skip the startups get the party started. Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. You want tech in tacos, tacos in tech, you know we got it. Hey, startups get the party. Startups get the party started. Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. You want tech in tacos, tacos in tech, you know we got it.