This Week in San Diego Tech Podcast - Apri 4, 2025

Foreign. What's up, Fred? What's up everyone? Welcome back to this week in San Diego Tech. Hey Fred, how you doing?

Hey Neil, good to see you.

Good to see you too. I am live downtown. Let me take off this background and show you.

Boom.

Got the real downtown behind me, which is fun to be downtown. I am at Natilus HQ which is my old stomping grounds, funny enough. 101 Broadway building is where I've, I lived from 2013 to like 2019. 2020. Evo Nexus, second floor. The whole, the whole building is bringing back a ton of memories, which is super fun. And then to be with Natalists where they're building the future of cargo and passenger planes is super fun to see. This is more their office environment, not the hangar. So it's a lot cleaner here. But it's super fun to be with them. How are you?

I love it. I love it. Neil, you know, every time I talk to you, you're at a different HQ across San Diego. Some days you're in Carlsbad, some days you're in like UTC area and today you're downtown. And it could be a better weather day. You know, I went to see the Padres a couple days ago and it was, it was a little bit rainy, but you know, it's great to see. Today was, you know, normal 65, 70 degrees sunny weather in San Diego, what we're known for.

It's a beautiful day for sure. And yeah, I just love being out with founders, honestly. I mean it's just like those are my peers and I just want to be alongside builders who are building and zoom is not enough for me. So yeah, I love to do it and I love hearing that you're at the Padres because man, Padres are on a heater right now, right?

7 and oh, they are, they are. It's, I think it's turned out to be a historic red hot season. I saw the statistic, I think it was ESPN that said both the Dodgers, which are 8 0, Padres are 7 0. This is the first time teams have made it this far undefeated since 2003. And I don't think there's ever been two teams in the same division that has made it this far. Winning streak. So it's an awesome time for. People are excited, people are going to games. Let's hope they can keep it up. You know, it's going to be a great rivalry between the Dodgers and the Padres. And you know, the game I went to was, was awesome. And you know, baseball season's back. San Diego is a baseball town and super excited.

Yeah, I love it. It's so fun to see just the excitement, enthusiasm for sports. I just went last weekend to San Diego football club match which was super fun, honestly. They should have won 3 0. They still won 3 2. But it was electric. Like the hearing, the chat, the crowd chant, the whole time was so fun. And so, yeah, sports is a good time for sports right now in San Diego for our two major league teams, that's for sure. It's also a good time to review how we did last quarter.

Startups get the party. Startups get the party started. Get the party started.

You want tech and tacos, tacos in tech, you know we got tacos and tech is 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 of 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 leaves gotta shout out to cost angels by the ocean watch the sunset La Jolla shores Entrepreneurs tryna 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 interviewing founders who be shooting for the Moon SD TechOS with your host, Neil Bloom. Come on.

Startups get the party. Startups 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 and tacos, tacos in tech, you know, we got it. Hey.

You put out a great article on wrapping up the Q1 report on fundings, acquisitions and let's dive into it because it was a, it was a good, you know, Q1, I would say. What was your take?

Yeah, so I was really curious, you know, look at the funding for this year. We basically hit 1 billion in venture capital funding for San Diego companies. There's about 40 deals in Q1 and, you know, majority of the deals were actually in tech. I believe 25 were in tech. Roughly 13 deals were in life science. And we had about four consumer deals. And usually this quarterly report is really just pulling out some of the top deals for tech. We saw Shield AI, they raised a 240 million round. I think they're now valued at 5 billion. They're probably our largest unicorn in town. Cyber Reason that was new to my radar there in La Jolla. And they raised 120 million round. And Netrodyne, which is kind of an OG software company in town, they raised 90 million. Jumping over to life sciences, Timberlane Therapeutics had the top round in Q1, 180 million. I think they just emerged from stealth, so pretty large round. Carlsmed, which is a med tech company in Carlsbad, late stage, they raised 64 million. Light Horse Therapeutics, 62 million. And the list goes on. So we'll go that in. But Neil, we're talking kind of before the podcast about how, you know, it seemed like some of the companies or a handful of companies that had these mega rounds which made it seem, you know, San Diego is punching above its weight for the VC funding. But we also are seeing it go to, you know, maybe a handful or a select companies versus, you know, 100 plus companies at precede seed and whatnot.

Yeah, I mean, you look at that 1 billion, honestly more than half, 55%, maybe 6% were from four companies. Right. So that's not just a San Diego trend. Only by the way, that is happening everywhere. We have been saying it core quarter after quarter from these reports, saying that bigger rounds with less deals. And I think it's a problem globally. But all I mostly care about is San Diego and how do we change that, which is more companies at the top of the funnel getting funded at the earliest of stages will widen our funnel to have more companies doing more later. So yeah, that's what sticks out to me here, you know, is I went straight to the Connect, you know, database of fundings and I was like, all right, how many of these were seed, how many were, were pre seed and how many were series A? It actually was healthy across the board. They call their pre seed still angel. So if you want to look through that, just Go filter for Q1 20, 25. We'll put a link in here. You know, still some deals that we saw in there, like Zylo did their Series A raise here, you know, which stuck out to me in that quarter and a few other tech series A's and, and, and seed deals. But, you know, we still got to do more. I think the job is never done. And Even if we had a billion dollar quarter, you know, and let's say we end up at a billion every quarter this year. That's a $4 billion year where last year we were at a $6 billion year. So in a sense we got to keep the pace if we want to show that we're even, you know, be able to at least maintain, if not grow, we ought to be able to grow for sure. So it's a good, good data point here and you know there's a few other companies that we can talk about that are getting funded. But let's actually jump real quick because I think there's a good story here around cool do we do about it? Right. We got a billion in funding for companies we know we got to help early stage companies go get funded at the earliest of stages to be, you know, continue build great businesses here. And so Cool Companies was announced which is totally built around that. How do we highlight the top 25 plus companies that are really ready for growth? You know, they're seed ready or Series A ready. And that's what San Venture Group has been doing for the longest time now Connect that highlights and, and Spotlight provides these companies who are Series A ready in the April to May time frame. So why don't we dive right into that. You want to share some of the the companies here that were announced just this week?

Yeah. So Cool Companies has been around I think since 2005. I think over 3 billion in funding have been gone to Series A. I might butcher the number but there was a. There's over a billion. 500 million. 900, 900 million. So almost a billion have gone to series A plus companies have gone through Cool companies. Obviously Connect is a non profit that supports innovation in San Diego. Yeah, some of the companies that were awarded or this cool company's badge this year. Ipop AI. Look AI. There's a lot of AI companies for sure. Joist AI. We had a couple real estate focused firms like Retrorated which I know we know the co founders of. There's actually a few therapeutic and life science companies, Vero Therapeutics om, which is another biotech company in town. I think there's about, I don't know, 25, 30 companies and if you're interested in learning who was accepted, we will link that in the show notes. There's also going to be a summer social happening by Connect on June 3rd and a lot of these cool companies will have booths so you can go meet the founders and learn more about the cool companies that they're building. Right here in San Diego.

Yeah, it's been great to see this year's list. We within interlock we have two companies in our portfolio that were on this list, IPOP and RetroRate, which was great to see. What I like to see looking across this is a bit of the broadness of the industries that the tech companies are in, but also some density. So Joist AI is construction tech. So is look AI Namara. Water is like water sensing for the home. Also kind of construction and sensor related. So that was cool to kind of see some grouping. Plus retrorate is proptech, you know around that as well. And then Loopholes, which was a techstars company last fall doing marketing technology alongside Privacy Hawk, which is cybersecurity at the enterprise stage. So it was cool. Just kind of look around and see the cross section of the tech here. Hardware, software on the tech side which is I think a good, good showing of San Diego here, that's for sure. I would say some of these are still pre seed maybe and so you've got some kind of companies who are ready to raise maybe their first institutional round on this. Either raise their first full seed or their first full Series A. So you know, it's on us now to make sure that these companies get in front of the right investors to close their first full round. I would say this community should want to help with that. So yeah, we'll see him. The VCs come out and see him late April, early May for like a preview showing and then summer social which I think is planned to be in Carlsbad this summer. We'll put the link in here June 3rd up the flower fields up in Carlsbad. So great to see that list and congrats to all the companies who've been named there. Let's go back to some fundings. You, you highlighted one Thatch AI co founders here in San Diego. You had a great article a few maybe a year ago on them. You want to take us through Thatch is what they're doing and, and their funding round.

Yeah. So yeah we actually did feature this company, it's called Thatch AI. They were featured in about October when they raised I think a series. There was 38 million in funding from top SF investors. A guy named Adam, he's one of the co founders. He's actually based in San Diego. This company is actually based in San Francisco. But one thing we've been trying to do is showcase, you know, companies that are also have presence in San Diego and growing and have some talent here. This company. They are focused on transforming the health insurance experience. They help both employers and employees access health care services at an affordable rate. So they raise a purge around 40 million led by index Ventures. They're also got some other great investors on the cap table like a 16Z general catalyst. And you know this company has been on a tear. They've only been founded under five years ago and they're a lot of their employees have come from Stripe. One of the co founders came from Stripe. Actually both co founders came from Stripe and they've been recruiting a lot of, you know, big tech and other Y Combinator type startup talent. So definitely a company to watch. It's great to see this news was just announced on Thursday this week and we will link that in the show notes if you're interested in learning more about what they're building.

Awesome. Something back to your Q1 report. You had some great way of pulling in all the M and A and IPO activity. I think we had one ipo, but we had a bunch of M and A, both companies getting acquired and San Diego companies acquiring other companies which was good data to have there. You know we kind of highlighted in the past pause about Gretli and Mosaic Tech, you know, getting acquired. Something that caught my eye is an article I saw on LinkedIn of just like Global M&A to date, one year, year over year. So looking at Q1 2024 and Q1 2025 and from this LinkedIn post that I have LinkedIn here, it was a record setting quarter for acquisition for billion plus acquisitions at 54 billion in acquisitions of VC backed startups. Now first of all, half of that went to Wiz itself which was a Google acquisition. But still, A year ago two startups sold for one over one billion. This quarter 11 startups sold for over one billion. So year over year, pretty good I would say in that regard also. So here are the questions that obviously we're going to ask and we're going to analyze week over week here. What's the difference, right? Does the new administration offer this feeling of change that M and A can happen? That's definitely what people thought about with the Google whiz, right? That this wouldn't get blocked and now is the time to make this happen. People also feel IPOs window is, is maybe reopening. We'll check on markets in a second here. Hold your thought on that. And then also record dry powder. There are more PE firms who are sitting on even more dry powder right now. Whether they've raised it and are waiting to deploy or they've had exits and are redeploying in that regard too. So good to see macro and level in that regard and we'll keep it poised of what we see going forward and how that's affecting San Diego. Now the hottest news of this week markets wise is the tariffs and what do they do to markets. If you are someone who opens your Robinhood app in the morning and just see red, well close it for the rest of the week because it is a bloody week, that's for sure. You had the number on it. What was the, how much down was the market this week? Just today alone.

So blue Bloomberg had a, had an article that came out today and it was about the Trump tariffs. It wiped out 2 trillion from the S&P 500 index. Some of the companies that saw the biggest impact value loss in their stock was Apple, Amazon followed by Nvidia among others. I'm sure if you go on on X or Twitter you will see a lot of pain pictures of the stock market and you know, you know I would say the color red for most of the much, much of the stocks across the US It's a tough market today and hopefully you know, this doesn't continue. But I think there's a lot of concerns that there's a coming recession from these tariffs and the dust haven't settled yet. No one really knows kind of what's next. Things are happening day, day and so we'll continue to talk about the, the local stuff happening in San Diego. We're also talking about the macro stuff happening globally because you know, both are important.

Totally. Yeah. I mean first of all we are we. When I say we, I mean you, me, Fred, but also if you have the startup community, we are long term focused here. Like one day does not change or sway us. Like we are dedicated for the long haul. We've been at it decades. We're going to do it decades because we believe in building great businesses here. So you know, market changes, maybe your attitude for the day but it doesn't, hopefully it doesn't change your conviction on what to do long term here. That being said, 2 trillion in loss, like that's pretty much what the new administration was trying to cut out of their budget spend per year and it was cut in one day. So you know, a little scary in that regard. But like we said long term focused and you know, we know that. I think San Diego opportunity wise has a big opportunity from just being a community that does a lot of industries, hardware, software, life science, the manufacturing Side is what will be interesting to see how these tariffs affect our companies. Right. We've already seen companies pull in their manufacturing supply chains from China to Mexico. What is that going to do? Mexico already came out and said we are not going to do retaliatory tariffs. So even if you're, you know, doing a tariff on us, we're not going to do it back to the U.S. what does that mean now? I don't know. So all those things get interesting to watch and our style of going out and being with founders every day and being with companies, we then synthesize it back through this pod of what we're hearing here. So keep your eye here with us and keep your eye on the horizon far down the road. Speaking of acquisitions though, I did see two, well, one that happened and one that's rumored to be happening. So Qualcomm, you know, one of San Diego's largest companies by market cap. Well, I don't know. Based on today's market cap, I don't know, but nah. Still the biggest company in San Diego, tech wise, just acquired a generative AI company which we can talk through in a second and then is rumored to be buying a UK based chip design company here too as well. I know these are kind of fresh on your radar here, Fred, but what's your take here?

This is pretty fresh on my radar. You know, they acquired this AI company and the founder of that AI company was, he led Google's DeepMind. And how I saw the headline is we've seen Nvidia, we've seen AWS and others really lean into acquiring AI companies. For example, Nvidia acquired Greto AI because they're trying to get ahead of this general AI race. And I think Qualcomm is like, hey, we have our own in house AI products. How do we stay competitive? And one way they do that is by strategic acquisitions. Not only do they invest in early stage startups, specifically in AI, but now they're acquiring and they've been acquiring, you know, talent and IP so they can remain competitive in this space. And obviously I'm sure you've seen Neil OpenAI's new, their new model. Everyone's using it, you know, with the, the photos and just the capabilities they have, they've been rolling out has really been wow in the industry and I assume big tech or like how do we remain competitive in this space? And one way is by acquiring smaller companies who are at the leading forefront of it.

Yeah, you see at Nvidia, where they are kind of verticalizing they not just a hardware company, they've got the firmware to run their chips and then they're building software and even their own models to run on their own chips. And I think you see that in other places as well too with Qualcomm, who is building ecosystems to, you know, they have an AI ecosystem so that their chips that are being used in places where I could best be run. The software companies are there as well too. We've seen actually I think we talked to him a few weeks ago. The partnership that I pop formed with Qualcomm, right, to have and build a vision system AI ecosystem using Qualcomm chips totally makes sense for Qualcomm. Want to be deeply investing in this. I think the other part related to tariffs and others. Qualcomm being a fabless firm, meaning they design the chips but they don't actually make them. They're made by TSC and Intel at some point probably, or maybe another fab. And you know that's under threat with tariffs and the threat of China and other things like that. So Qualcomm who has already been in this big diversification rush, right, get out of only handsets only and get into other things. Makes sense for them to be getting and finding other use cases for their chips into AI, which is pretty much in every other sense of the word these days. And at some point soon, like we're going to start saying AI is software and software is AI, right? Like it's just kind of synonymous almost at this point that one is the other and the other is one. I think to date I have been saying, you know, software is the brand is just like what the kind of product is. And behind the scenes AI is what the language is or the tech stack. But they're becoming synonymous. Definitely the pitch decks that are coming my way, they're no longer we're a software company, it's we're an AI company. So all that's interesting to watch and I would imagine a hardware company like Qualcomm is deeply focused on staying relevant in that as well too. So we link those in the show notes and you can read on those deals as well too. Let's just jump right down to the consumer news that you had here about Symbiotica.

Yeah, so there was a consumer focused company, Symbiotica. They recently has been recognized by Inc. Fastest 500 companies or I think fastest growing private companies in the US they're ranked number 10. They saw nearly 600, 600% increase in revenue from 2022 to 2024. For me this is a company to watch, you know, tech and life science, a lot of love. Something that we preach on this podcast is that consumer is a continue to be a thriving sector in San Diego. And we're working to gather the CEOs and leaders in the consumer space. But it's really important just to showcase there's real talent in companies being started day in day out in San Diego. Consumer this was a husband and wife team they founded in 2019 and they're just crushing it. They have products in retail spaces. They also sell products online or community shows. Check them out and support local consumer consumer brands.

Yeah, hell yeah. We we highlighted last week little sad news on the consumer side that the kind of the unfortunate death of of Pura Vida. But you know there was talent that was born there for sure that is going on to other things and in fact other talent that we saw some, some trends and highlights we saw here is actually the change of leadership at another consumer brand here at Blenders, which has been a long time consumer focused sunglasses company led by Chase Fisher, San Diego State alum who had a pretty good exit I believe to luxottica a few years ago. But you Cap, you saw the news here that he was stepping up to the chairman role here. Take it away, Fred.

Yeah, this is fresh news. This is about posted:6 hours ago from Chase Fisher himself. He welcomed a guy named Jack, Jack Gray, who's a new CEO of Blenders Eyewear. And Jack had a pretty great post on LinkedIn as well. And he said it's rare kind of to have the kind of self awareness that, you know, Chase Fisher, the CEO and founder of Blenders had to kind of shift gears and you know, I think it's kind of a next chapter for Blenders. Jack came comes from Adidas Parks Project and Black Crows. This guy is a veteran in the apparel space and I'm excited to see where Blender goes next. Obviously they were put on the map when they had a collaboration with Deion Sanders and the Colorado football team and they're really just getting started. Even though Blenders did have an acquisition by a bigger sunglass company. You know, Chase Fisher does have still have ownership, I think a minority ownership in the brand and so he remains and continues to hire locally. This is Attorney Page. We're just talking about how there has been a lot of reshuffling in leadership spaces in the last few months. We also saw Shield AI had a new CEO come in which I believe came from Silicon Valley running a Few large companies, including Cisco. The new Ryan Sin is is actually stepping away and kind of moving up to president. Still involved at Shield AI's day to day, but they're bringing in some real senior leadership to help steer the company to its next chapter.

Yeah, it's interesting to see, I would say, you know, after you get acquired a few things happen. One, you've got some performance metrics usually to hit. You've got an earn out that says here's how much time that you'll be. You have to kind of be locked in with some golden handcuffs. So that part typical the a CEO step out of that though I think maybe after acquisition. I think it might been how long? Four or five years? No.

Yeah, a couple years. Yep.

So you know what we only can hope is that he's already got this next idea ready to go and he's going to do it here hopefully in town and go build another company based on things that he's learned, which is great. SHIELD where I think they're still, you know, they're private company, they're still got a lot of like leg room to keep growing from where they're at. Just because where you see some of these defense techs going and these hardware companies who, you know, kind of the next generation of the defense industry here, I think it's interesting to see kind of see the next CEO take the reins from you know, maybe what was from 0 to 100 million revenue and now it's 100 million to a billion or 10 billion revenue. You know, I think that's, that's super noble of Ryan as well too. I first met Ryan by the way in this building, 101 Broadway when he was in Evo Nexus. I think it was for a prior company. It was a company that was a lockbox to lock your snack foods, I think. And then big pivot Star SHIELD AI. So congrats Ryan on the super run. And we'll continue to shout and cheer shield AI from, from the 101 Broadway rooftops here. That's for sure.

That's a cool story. That's a cool story. Now that's awesome.

Yeah, it's a, you know, it's, it's, it's full circle to, for this building to see what, what has launched literally from this building. So events coming up. So we're going to put this event, this podcast out probably on Friday. The founders hike has already, probably already happened. So thanks everyone for coming out to the April founders hike and then we'll do it first Friday every month. By the way. So check it out in May. And then coming up first Mondays by startup San Diego is coming up Monday, April 7, which is got a panel and a whole big crew, people coming out, hundreds of people lately coming out to the first, first Monday's event. Also coming up soon is the return of 1 million cups. April 16, 1 million cups, which is a global event, happens every Wednesday at 9am where two startups do a pitch and the audience gives feedback on their pitch. We I was, I actually gave one million cups my pitch in 2013 in October. It was only week two of one million cups at Comerge, which doesn't even exist anymore and it was, it was happening every week. So it's great to see the event coming back to town and I will be there supporting and seeing new pitches from two new companies, that's for sure. I want to give a shout out to Jonah and Ross did a Bootstrappers event this past week which was awesome. Highly curated for full time bootstrappers. These are people building mostly software products, but they're, you know, full time on it. Everyone there was just like showing the product. I signed up for them on the spot. This is a really well curated event. So cheers Jonah and Ross for putting that on. Ross has built a killer bootstrap software business, or AI business, if you will. And Jonah, who's collecting, you know, all the events that are happening, is now getting into putting on his own events because he's seeing holes and gaps of areas, which I think is awesome. So kudos to you if you want to find upcoming events. Make sure you check the social Coyote link in the show notes here and we will see you out there because that's what we do. We see you in the community. So make sure you come and say hi, I'm headed to the Tech Stars mentor kickoff event right now in Del Mar. Fred, I know you got a big workout you gotta go do, so I'll let you go. But Fred, thanks for joining. Pleasure as always. Thank you for being here.

Always a pleasure, Neil. See you next time.

Cheers. Thank you.

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. 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 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 taco stand in puesto lucha libre and sombrero Gotta 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 the tea iguana sd 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 the party started?

You want tech and 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 and tacos, tacos in tech, you know we got it hey sa.