This Week in San Diego Tech News - July 1, 2024

I need to start this podcast off with a personal note about Brant Cooper. Some of you may, some of you may not know Brant Cooper, but all of you are the direct result from Brandt's startup ecosystem leadership. Brandt is part of the founders of San Diego Startup Week and Startup San Diego and so much more. He is the original grassroots startup organizer in San Diego that repeatedly saw problems in the ecosystem, called them out and went to work solving them. Brandt is in the last stages of fighting esophagus cancer and it's unfortunately not going well. He's comfortable at home and he's a fighter. A lot of us are hurting as we look to support Brandt in any way we can. I'll probably do more dedications as time goes on, but I just wanted to get this out there. We love you Brandt. On with this episode. Hello people and hello Fred. How you doing?

Hey Neil, glad to be back.

It is good to see you. We've been away from each other for a few weeks besides this event we did this week but I'm well rested back from Spain. You're about to take off on a trip here so I'm glad we caught each other to to do this recording. We put on two back to back events on Monday, June 24th that was pretty fun. We did industrial tech founders and funders lunch over in Cardiff and a logistics tech founders and fireside chat with Block Freight CEO Oren Zelansky. What'd you think? You have fun?

It was fantastic. You know San Diego is always known as like a life science hub so it was great to get together folks in industrial tech and also logistics tech and you know I saw a lot of founders that you know, I haven't seen in person before. It was great to see people like Rory Moore who co founded EVO Nexus attended and yeah, shout out to our sponsor Silicon Valley Bank Gunnerson B Capital for sponsoring those.

Yeah, it was cool to have B Capital down for this. We've, I've formed a bit of a partnership or maybe more of a friendship where we're just sharing deal flow that come down from LA pretty often just because they're interested in specifically this kind of industrial tech in San Diego where it's not just pure B2B SaaS for you know another kind of selling to other software companies, more like selling into industry who. And San Diego has a lot of that. We're building software for trucking or for defense or for you know, waste management or the, your, your home services group like the house Call pro guys. It was cool to see them and stuff like that. So yeah, it was, it was great to have two events like that. There were a little overlap, which was actually kind of cool to do it that way, I heard. So the nighttime event at Flock Freight, it was just 10 founders plus me and a few. Two other investors. And we had like co founder Jake Fields, co founder of Platform Science in the room. We had Max Weniker, who now is contract coo, but it was like launch jump bike for Uber and launched Uber Eats for Uber in a lot of markets. So we got, we got deep into like, what's. What's it really like to be in the grind? Breaking open logistics tech and orange story is awesome.

I.

We got to get him on the podcast and just interview him. Like he had a trucking company, then he had a truck freight brokerage and then he said we got to do better after 20 years in that business. Then went in and started Flock Freight. So it was a really cool story, cool to see their space. And I know you're gonna be doing an article about this, so keep an eye out for a deeper debrief from Fred on the business of San Diego substack. Which reminds you now go subscribe to that. Subscribe subscribe to the Tacos and Tech Podcast. If you aren't.

Startups get the party Startups get the party started.

You want techie tacos, tacos in techie. You know we got tacos in techies on smash border 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 eatin tacos el gordo the tacos standing 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 San Diego Startup Week is popping in the summer Oceanside the Tijuana estee 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 SD TechOS with your host.

Neil Bloom 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. Let's dive into our news here. Let's start with the bad news. I always like to start with bad news. Dexcom, one of San Diego's beloved medical device companies, glucose sensor company and like multi decade, multi deca billion public company, announced a pretty big layoff here. Announced that they're entirely moving manufacturing to Arizona and keeping the lab space for just R D. They claim in the article. You know, this really was never meant to be manufacturing, but they just did it because they needed to. But that's 500 jobs that they're eliminating, relocating. It's a lot. What's your takeaway from this friend?

Yeah, so if people are curious looking at the article, Natalie Rocha wrote the article for the UN Tribune and yeah, I just thought it was another blow to layoffs. I think Q Health had a bankruptcy, Durham Tech had some layoff layoffs and now Dexcom is like a third or fourth company to announce layoffs. It's sad to see and hopefully that talent that gets laid off, they go join other companies locally or maybe start their next company. Dexcom is one of the largest companies and largest employers in the area. I read that their headquarters will remain here and they still will have some employee base here. But yeah, it's definitely a loss for sure.

Yeah. You know, it's kind of interesting. It's the nature of the scene right now. Like it's almost tale of two cities in the biotech world. Especially. Like we're seeing massive, gross, massive funding rounds, IPOs and then we're seeing this other tail end here of layoffs and other things. It's kind of interesting to be watching and how dynamic of a market is. It kind of brings us to our next point with Illumina, which has gone through quite the ringer over the last few years. Another medical device, if you will. This is genomics meets hardware meets software company here. I mean they've got thousands of software engineers working for this public company. They. So the story here is that they spun off Grail again. So and we'll have to dive into details here. And really this, we love to. This made me think of Mike Freeman, to be honest, who's really good at covering drama that happens at Big Techer in this regard. This is quite a dramatic story. I feel like it almost should be a movie at this point. From forcing a CEO out to layoffs to everything here. Like I'm going to pull it to you, Fred. Like take us through a little bit. What's, what's been happening over the last, most recent history here with Grail and Illumina.

Yeah. And you can follow this, type it in, Illumina, go to the news section and you can see all the headlines. But essentially it all started by Illumina trying to acquire a small San Francisco based startup that was creating cancer tests, tests that can test for multiple cancers. They tried to acquire it for over $8 billion. He got blocked, the government got involved. And it's a huge issue because the CEO who led the acquisition, he was let go. The board, there was some issues with the board members. And so long story short, you know, the company was spun off of its own entity. And it's just been a huge wind blow to Illumina, who has had a lot of success over the last few decades. Their stock tanked, employees were laid off, laid off, some of a portion of them. And so they're kind of working through this turnaround period. They announced a new, new CEO who's leading the company through this turmoil. And it seems like every other week there's some kind of board issue and stock price issues and you know, they're currently navigating that, which is. It's complicated.

Yeah, I mean, the inside piece here is actually Grail was founded by Illumina. So it was started internally and spun out from its. So that was how Grail was born, actually. And then once it, and once it became a public company, I believe. No, maybe Grail was always private. Illumina went to acquire it. Right. Is what you're saying. But it was not. It was both challenged at the FTC and the European Union. Right. And they got through the ftc, but the European Union still held up. But Illumina actually went forward and just finished the acquisition anyway and said, well, we know you've got issues with this European Union. We're just going to actually finish the acquisition. Which I think was also the big thing that set them up for a lot of drama was not that was that that they didn't wait for the regulatory to come through that just said we're gonna merge these companies. And I think that's kind of unheard of. You don't see a lot of companies just go and do it and make it happen. And so yeah, the activist investors that came in were really strong here in this scenario and now they're spun out. So crazy. What that means tells me though, I gotta always look for the bright side. There's, there's talent out there, there's talent that is worth coming into your company. So for the companies that we're about to show here who are just raising all that money should be going into acquiring talent. And there's a lot of good talent out there who have built some really good businesses. So keep an eye out there. I just posted about the Dexcom hiring or layoffs. So if we can help, you know, find people a new job, let's do it. So yeah, why don't we talk through the next fundraises here?

Yeah. So life science is kind of my scene right now. I'm at the Business Journal writing two stories a week covering life sciences. The first story that we're going to talk about is Report Therapeutics. They're I think the second or third life science company to go public this year and they're looking to raise I think over 100 million in the IPO. This is a good sign as last year was very tough for companies trying to go public. I believe I saw a statistic that less than 10 companies went public for life sciences. Don't quote me on that. But basically it's been a tough year for, for companies looking to, to raise capital via public markets. And so this might be a good sign for companies that are raising capital. Boundless Bio went public earlier this year and they had a successful ipo. So it's great to see that some San Diego companies are, you know, finding success at the public markets.

Yeah. Let's talk through one more late ad here on. It's a battery tech company called Unigrid. Unigrid. It just raised a twelve million dollar financing for. Whoa. The terrible link that I threw in there for you, Fred. Sorry but tech punch covered this battery spin up here and what they're doing is using sodium in their batteries, which is a big change from everything is lithium ion which you know, you're using so much lithium ion for everything. They instead are starting working through sodium ion batteries instead of the lithium ion. So just a different kind of internal component for batteries all the way from EVs and all the way on down to your, your little battery here. But if you've listened to and caught a few trends here, there's a lot of battery tech actually in San Diego which is kind of interesting. A lot of clean tech that is specifically around battery tech. And then a lot of companies who are doing other things with batteries, whether it's, you know, in vehicle like Aptera, actually making their own battery powered vehicle. So unicorn. Interesting one first time the company popped up on my radar and we'll keep an eye on other raises like this as well too.

Yeah, that one's new to me. Anzu Partners which is a local VC firm they're known from back for backing, you know, battery startups so it's an interesting scoop there. Thanks for sharing. Two more stories on life sciences front There are two major financings which we covered at the Business Journal. The first one was Iambic Therapeutics. They raised an additional extended 53 million for their series B. Earlier this year they had announced raising 100 million Series B so that brings a total raise for Series B funding at 153 million. This is led by a former professor at Caltech. They moved their headquarters to San Diego to build this company where they're using AI for drug discovery. Super cool company. They have about 60 employees, just got a brand new space in Toronto Valley. Recommend checking them out. They have a pretty cool story. The second biotech financing that was really large was Bright Peak Therapeutics which raised a 90 million Series C and this was actually incubated from a larger pharma company, 2019 and they've only. This is, this is the only second, this is the third fundraise since founding and from the CEO talking to him they are doing some pretty incredible stuff of creating some, you know, pretty life changing therapeutics which is pretty exciting.

Also here. I mean like we're saying biotech's booming right now, has been all year. I mean it's like the whole story of 2024. I feel like biotech and while the other story is AI like not seeing a lot of AI fundings in San Diego right now which is kind of interesting too which kind of speaks to we can do another debrief it event that we happened this week. We did an AI showcase event on Tuesday June 25th. It was kind of a partnership of a few orgs which was really nice to do. San Diego Tech Hub and CTO talks by Arcus Nexus and Fresh Brew Tech came together and did it at Braincorp's headquarters which was really cool to see and do it there. 130, 150 people. It was packed and what was really cool is the SDX team of Chad and Ben Mc the night and you had demos. So people had four demos and then a panel which is really cool to see. I love to see the demos that's for sure. I met a few new companies already talking to them after the fact. I really met. There was a company visiting from Canada, Ottawa I think who happened to have meetings in la. He he heard about the event, found his way to San Diego, found his way then because he's going to be in San Diego made some meetings happen as well with some local potential customers too. So cool to see that kind of stuff happening here as well. One of the things that was announced at that panel was that SDX has taken some coworking space. They're going to have a physical headquarters in Liberty Station which is awesome and they therefore going to start doing co working days where people can work alongside them. So keep an eye out for their announcement about that. I'm looking forward to spending some time working alongside people in person down at Liberty Station here. Events actually a little quiet. I think that means people are on vacation coming up over the next few weeks, but January 12th we'll be doing our founders hike again. Normally it's first Friday but because of 4th of July I decided to move it to the week after. So if you are in town come hike with us early in the morning on July 12th at South Torrey Pines lot and should be a good time. Any other events on your radar?

Brad no, I think we covered it and you know, we'll try to continue to bring the top top of mind news from San Diego startups each week. And it's a pleasure doing this with you Neil.

Always, always, always a pleasure. Keep an eye out on Fred's business of San Diego substack and you can now read him in the San Diego Business Journal. Keep sharing all of those articles publicly, the ones that you like, so that everyone else gets wide range. Share this podcast and make sure also for events go look at the Social Coyote which is linked in the show notes of this podcast too. Thanks everyone. Thanks Fred. Have a good trip and we'll see you soon.

Thanks Neil.

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 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 RAC be wrapping 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 sombrero got a shout out to coast angels by the ocean watch the sunset La Hoya shows entrepreneurs trying to get funded when Sydney San Diego Startup Week is popping in the summer Oceanside the Tijuana Estee 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. 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 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? Hey.

Sam.