This Week in San Diego Tech News

And welcome back to This Week in San Diego Tech News with your besties Fred and Neal. Hey Fred, what's up?

What's going on, Neal? It's good to see you.

It's been a few weeks since we did this, so, uh, we, we got a lot to cover. Luckily, you know how we roll. We got— we can get it all done. We can summarize what happened in the last day or what happened in the last year in minutes because that's what we do. Fred with his Substack, which is— man, you've been pumping out content lately on fundings and the whole Q1, what went down in Q1. In case anyone didn't know, it's already Q2, which is crazy. So make sure you're following Fred on The Business of San Diego Substack. Mr. Fred, the president of the Business of San Diego Substack. And I've got Risentype Partners Substack. Neal Bloom here, friend to the founders and everyone in between, investing and building community here in town. Fred, let's jump right into it. We got plenty to talk about, and maybe the best way to do it is start with just overall the Q1 funding report, and then we'll, we'll pull out a few fundings that recently happened that are interesting. Um, but you want to start with kind of like Q1, what went down, uh, over the quarter?

For sure. Yeah, Neal, it's great to be back. Uh, look forward to kind of just highlighting, you know, what happened over the last few months from events to recent fundings. So in San Diego, uh, usually in Q1 we usually see around $1 billion funding going to local companies. This year was a little odd. We had about $1 billion going to local startups. We also had a massive funding round that just broke news a couple of days ago. Shield AI just raised a $2 billion funding round. I think it was like a Series G, Series E. And so right at the cusp of Q1. So I think some people could say, hey, we're at $1 billion. But I think, you know, if we're trying to be accurate on San Diego-based companies who raised funding, both tech, life science, headquartered in San Diego. We're now already at $3 billion including Shield AI's funding. We'll go into the other, you know, key fundings. There was a few biotech deals. There was some, you know, software deals. I think there was a total of about 40 venture capital deals in Q1 2026. About 5 of those were at least $100 million or more. And there was also some M&A activity and IPOs. I'll pass it to you, Neal, to talk, talk about the highlights there.

Sure. Yeah. And for our one specific listener, Jason Scharf, we're counting all $3 billion in Q1 for San Diego. So put it on the board because Mr. Jason is putting it on the board for Austin because their big deal was Sironiq, which just raised a cool billion. Saronic happens to have a large office in San Diego as well too. So, uh, love to have the shared loves between our tech cities. But yeah, some of the, some of the fundings we're talking about were, were— and what's cool that we'll pull out is there's a lot of, uh, tech that's both software and hardware that sits between, you know, AI and bio, or AI and robotics, AI and defense tech, um, hardware and defense tech. So pretty cool to see. Let's jump right into a security company here, Manifold Security, that just raised $8 million. You want to talk through them a little bit?

Yeah. So this one came on my radar through a local reporter through the San Diego Union Tribune. The headline was an AI agent leaked Instagram and Facebook user data. This San Diego company startup is building the fix. The company is called Manifold Security. They just emerged from stealth. They launched a new software company and they raised $8 million and now have that in the bank to hit the ground running. There was a great photo of the three founders, a guy named Neal Bloom, Michael Bloom, and I can't pronounce the other guy's name, but it was a great kind of headshot. We'll link you in the show notes. So basically they're a San Diego-based AI detection company and response platform. And yeah, they're trying to solve this problem around AI agents and security. So I think, you know, in San Diego we haven't seen a ton of AI software companies. We had a company that was acquired by Nvidia called Gretel. That was the most recent one. And there was a few other ones like Personal AI has raised some funding. And so this Manifold Security is next on the list. Congrats to those guys on emerging from stealth and we'll continue to watch what other software companies are getting funded in San Diego.

Hey, and let's give love to the third co-founder. I got you, Alexander. Uh, the three of the— two of the— two of the three co-founders did an AI company prior to this, Layer AI, which is pretty cool to see them come right back at it and build another one. Um, so yes, we love seeing tech companies, especially in the AI, which we've noticed— we've mentioned on past pods, we didn't see San Diego participating in a lot of, uh, kind of the AI boom that's happening. Um, so good to see and keep it up. Let's jump down to Robodyne, a life science company that just took on some new funding.

Yeah, so Robodyne is actually in Eli Lilly Gateway Labs in Torrey Pines. They just raised a seed round led by a syndicate of both existing and new investors. They're using an AI platform for drug discovery, and they're founded by a guy named Corey. Who had a previous background working at Scripps, and I believe he had a biotech company that was acquired for $800 million. So he's now back at it again, his second or third biotech company. And, uh, this is definitely a company to watch. They were featured in the San Diego Business Journal. The headline was Dark Genome Startup Raises $10 Million Seed. They're developing cancer drugs targeting junk DNA. Uh, this is definitely a company to watch. They're growing. I believe they're about 10 15 employees now. And yeah, they're, they're off to the races.

Yeah. And we got— you and I both got to know them a little bit at the Phase 2 AGM event, which was cool to have them highlighted in the portfolio, spend a little bit of time getting to know them and boom, right out the gate raising $10 million here, which is super cool. So congrats to the team. Let's jump to Condor and then we'll get back to Shield just so we're talking dollar amount rise. A San Diego company, Condor Software, raised a Series A round. They're doing software for the life sciences world. And I remember meeting them as a cool company by Connect a year or two ago. And then I think both Connect's TL fund and the Prebys Foundation fund also participated in their most recent investment rounds here. Yeah, Fred?

Yeah, so the founder is woman— is a woman. Her name is, uh, Jin Kyle. I believe she comes originally from the Bay Area. I think she had a background working in Big Four consulting, uh, working with life science companies. Basically, they've created a fintech platform and they're working directly with the life science community. Uh, their software does a lot of different features. But yeah, they raised a $24 million Series A that was led by Insight Partners and participation from other investors as well, including local VC firm Purpose Ventures. Congrats to the team. They're off to the races as well.

Yeah, love to see it, uh, for sure. And then lastly, kind of rounding out our mega round here, Shield AI, as you mentioned, uh, San Diego drone software and hardware company. Uh, they really actually originally started with a drone that could on its own, no communication, make its way inside a building. You know, it would be kind of a SEAL team, release a drone into a building to kind of be ahead of the team. And be able to send back data. Uh, and now at this point, you know, they have acquired other drone companies to have hardware. They've built autonomous piloting software that actually can— can you can pilot existing fighter jets like F-16s, F-18s with it. Um, and you know, they're just winning $200 to $500 million contracts left and right, so it seems, and they continue to grow. Uh, in fact, I looked back at our funding from a year ago, like they were one of the largest funding rounds from Q1 of 2025, and that was a $240 million round. This is a $2 billion round. So they've kind of 10x their funding rounds. And it also makes sense because of the kinds of defense tech deals that are getting done right now. I mean, you get the Anduril and others who are raising $2 to $5 billion rounds and scaling up manufacturing fast. So great to see. Shield AI raise. You got more commentary here on Shield?

Yeah, Shield. So they're now valued at about, I think, $12.7 billion. They project about $540 million in revenue this year. And in conjunction with the raise, they actually made an acquisition and they acquired a software firm, Axilon Technology, and the price for that was not disclosed. And I also checked Anduril, see what their valuation was. They're at $60 billion. You know, as I think obviously with what's going on with Iran and the war, defense tech companies are seeing a surge in demand for different products and there's new government contracts being dispersed to local companies. I believe Shield AI is definitely a beneficiary of that. And I wouldn't be surprised if we see companies like Firestorm Labs or CSATS or other adjacent companies in those spaces also see an uptick in valuation and funding rounds because there's just a lot of momentum building. Defense tech today.

There is, that's for sure. Any other notable headlines you want to mention from Q1? I think we had some— we had a few companies go public. We had a few venture funds raise. What else you want to highlight from overall in Q1?

Yeah, to cap it all off, I mean, Padres is now in talks to be acquired for $3.5 billion. I believe there's an owner who owns the Detroit Pistons who put a bid in for that. Expect that to kind of go out. If that does happen, this could be the largest trade for an MLB team in history. We also have some IPOs. We had Solve Energy, which was founded in 2008, go public, and they're valued at now around $6 billion. We have some M&A activity. We have VentiX Biosciences acquired for $1.2 billion. We also had Candid Therapeutics merge with RallyBio for $505 million. We have just so much stuff going on in Q1. It's— it hasn't slowed down at all. So definitely a great year off to a good start and we'll see where we end up.

Yeah. To cap that off, we've got the latest 2026 Cool Companies by Connect were announced. This is kind of the top 30 companies that are Series A ready. And it's been going on a long tradition since San Diego Venture Group days and Connect kind of took the helm over there. A number of companies that have been in past years and a number of new companies as well, which is always good to see. Companies, you know, both— they span both the life sciences, medtech, med hardware, and straight hardware, and then software companies as well too. So good cross-spectrum here. Got a link to all of them. Seeing companies that jump out You know, like Clinically AI, Ross and team, congrats on the list there. EcoDrive, I think they were 2 years ago's winners of San Jose Angel Conference. We got Hyperkelp, which is a, I think, a UCSD Scripps spinout of doing sensor package on the water. Psionic, Robotic bionics. Got Exome, the med device for, uh, at-point-of-care diagnostics. What, what else is jumping out here, uh, for you, Fred, on this list?

Yeah, I think it was like 50/50, both life sciences and also software and hard tech. As you mentioned, there was Psionic, which is a robotics company, Clinically AI, Exome, uh, Third Element Bio. A lot of these companies go out and raise, uh, additional capital after being awarded cool companies. So definitely these are the ones to watch. And congrats on the winners of this year. And I believe there's previous winners like Cloud Beds, Clock Freight, Trust and Will. So this is definitely a long history of companies being recognized. And so keep up the great work and we'll continue to bring, bring the news together.

Yeah, absolutely. Speaking of events, by the end of this month, now that we're in April, we'll be releasing the list of the top 50 hard tech-specific companies. To watch. We put out the list last year and man, it was so well received. We're going to do a release party at the end of the month. So it's not open to the public, unfortunately, just hyper-focused on founders and funders in hard tech. And so we're making sure we get the right, you know, we're putting all 50 companies in the room and then also making sure we got the funders, the VCs who are coming to meet those hard tech companies. So expect the, the announcement release of that list coming by the end of this month. What else is on your radar, Fred, events-wise?

I believe you have a Founders Hike this coming Friday, actually.

True. Yep. We'll be first. We kind of started to call it First Fridays Founder Hikes. That's just on people's tongues. So you're like, when is it? First Fridays, 6:30 AM, rain or shine. So it should be super fun. I know TechCon SoCal is spinning up its marketing engine. I think in April they're in San Francisco and then in May they're in San Diego. So that'll be good to have the good local conference bringing and connecting people together. Yeah, there's a lot. People are already starting to talk about BIO conference up in, in June in San Diego. So already hearing about people planning their, you know, events that they're going to do the side events as well. So it's going to be busy. It always is.

And I also believe Startup San Diego is planning their next First Mondays. I believe that's going to be at ClickUp's office. I think Andy Ballester is one of the panelists and they're working to get some other panels together. But yeah, we have, you know, more conferences happening later this summer and we'll continue to curate what events are happening. I would just also plug Eventship.com as well as Jonah Peake's Social Coyote, which is a weekly newsletter that talks about what events are happening that week. And yeah, get out there. There's always, uh, communities to get plugged into, whether it's tech, life science, consumer. There's also investor gatherings happening. Um, yeah, raise your hand, we'll, we'll definitely plug you in.

Yeah, thanks everyone for tuning in. Uh, like we said, make sure you're subscribed to Fred's pod, The Business of San Diego, and obviously you saw this one in Rise and Tide Partners, uh, Substack. So thanks everyone, and Fred, Thank you. Always a pleasure, Neal.

Likewise. See everyone. Take care. 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 Tecostejos 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 downtown, 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. #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!