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

Hey. Hey. Hey, Fred. How you doing?

Hey, Neil. Doing pretty good. Glad to be back.

Yeah. Another good week. Another good weekend. Did you have a good weekend?

Oh, yeah, I had a great weekend. It was nice and sunny in San Diego, so. Yeah, it was great.

Yeah. You know, there's not really much to complain these days about life in San Diego. In fact, quite, quite a lot to boast about. But we, none of us are really that boastful either, so, you know, San Diego is a level headed as we all are here. I'm excited to dive into another week's worth of news and we'll do that here in a second. We've got a mix of news events, you know, so it'll be a good one.

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, tacos in techie zone smash border green guacamole Keep accountants counting beans Contador cuentan 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 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 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 to Tijuana St. 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 get the party.

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. Thanks to our partners, Cox Business is a leading provider of technology solutions and we're looking for people like you to grow our local sales business. We reward your hard work with a competitive compensation package plus commission, healthcare awards and recognition for top performers and opportunities for career advancement. We're on a quest to find someone whose savvy sales skills will help keep our customers smiling. Visit CoxBusinessJobs.com to learn more and be a part of our customer focused team.

My name is Neil Bloom. I run Fresh Brew Tech tech newsletter about San Diego and talkers and tech podcast which you're listening to this on as well as an investment fund and community interlock Capital. And my co host here is Fred Greer.

And I'm Fred Greer, startup journalist in San Diego covering the venture capital and startup scene. Also the author of Business of San Diego Substack where I'm writing weekly stories on the biggest stories in tech.

Awesome. Love dissecting them with you as well as now doing events together in person as well. So let's jump right into this week because we got plenty to talk through. We're going to talk CPG small business all the way up to big business big tech here. And one of our first stories is a delicious one, Maya's Cookies, who many of us have gotten to know over time by maybe by grabbing some cookies at a farmer's market. I think the Little Italy Farmers Market is the first place I've seen them. This is a vegan cookie that actually I think they self describe as kind of misses Fields like but with but vegan. And you know the founder bootstrapped this business all the way from early days. I think a $3,000 grant helped her in the early days and now she's got two big storefronts both downtown and in North County. I think she officially opened up in San Marcos right by Cal State San Marcos there and continues to operate both an e commerce platform and at farmers markets as well. Kind of true to roots and I definitely know people who still every Saturday go get their fill at the Little Lily Farmers Market. Have you had one of, one of Maya's Cookies?

Yes. Big fan of Maya's Cookies at the Center Business Journal. We highlighted them in the early days and they are black owned sell cookies that are you know, vegan, gluten free, friendly. They're on that trend. And yeah, they started the farmers markets, they expanded to physical locations in San Diego and I really think their story is a testament to Sandy with ecosystem that it's diverse. We have like fast growing startups. We also have these like cool food brands that are you know, finding success in the area and hopefully they're inspiring others to, to do the same. So really cool story. I recommend checking out the piece in the Business Journal that they did a few weeks ago.

Yeah, we're linking it here. Maya is also a giver of her time. I know she recently came on campus to SDSU and gave a big, I gave a talk to a big audience of students who had entrepreneurial aspirations and there's a few companies I continue to mentor actually at SDSU that we've connected them. One is working on a healthy allergy free sauce and I was like, oh, you didn't talk to Maya how she got started in the farmer's market route and super giving every time around. That so cool to highlight just great entrepreneurs and company builders. Speaking of other cool companies worth highlighting, recently got some news on a sports an active lifestyle tech company, Edge Theory Labs, which have some entrepreneurial roots between them and their family. They have some roots in the suja juice world, but we'll get to that in a second. The Joshua Church and Rob Church, they're actually cousins of each other. They started a human health hardware company that it really starts with a cold punch pool that I've actually tried. We actually hosted them at our office in Encinitas over last summer. I jumped in and it got, we got it down TO I think 58 degrees there. And it, it's a cold plunge pool that is kind of a high, high quality pool in the regard. Like it's made from really durable materials. Like I think like, you know, like seal team quality inflatable materials as well as a cooling system that can cool and heat with within two hours, like really quick compared to I guess a lot of other cold pools. And they've had some significant traction in the last year. You want to talk through that, Fred?

Yeah. So Edge Theory Labs, I think the headline story here is they were founded in 2022 and at the time they were doing about 1 million in revenue. And in the last year they've grown that revenue to 8 million. They have about 20 employees and so really explosive growth. They started as a bootstrap loan, I think with $50,000. They raised a small friends and family loan for $100,000. And so they were able to scale that, use that funding to grow their business. And you know, cold plunges are the new black. I can't not hear about cold plunges on Twitter and LinkedIn. All the tech savvy folks are talking about the health benefits and I think it's a growing trend and they're really leaning into the athlete space. And in San Diego there's a couple, you know, of these cold plunges I've seen in North County San Diego. So there's definitely a hub happening right there and I think they're, they're poised to ride the trend and continue to be successful.

Yeah, you kind of spotted something interesting about the north county scene. Like it's not just, it's a community of actually really active people first of all who are also building active products as well too. Which is kind of great to see. Right. Customer is the entrepreneur and vice versa. Which is also where Sujo was was founded as well. So Rob Church and Jeff, well sorry Rob and Josh both worked at Suja Juice which was a San Diego started cold juice press company that eventually sold a large, I think a majority position to Coca Cola and then again sold it to private equity. And both of these founders had roots there. So on kind of a healthy product. Good for you. And then went off to go start their own company in also good for you but in a different vein as well. Love to see that kind of repeat innovators in that regard. So we'll continue to track the progress. But yeah worth checking out a labs. I will say if you go on their Instagram page, the Pixel follows you everywhere. You will nonstop get Cold Plunge ads everywhere you go on Instagram. I now see at least 10 to 15 other cold plunge products now that I visited either their website or some social media posts. So great to see the tech making its way to us one way or the other. You want to take us through, dive us into the next story here?

Yeah. So the next headline is Crow pr. They qu they acquired another PR firm and Crow PR has been here for some time. They've been here for about seven, I think nine years in the business. Anna Crow is the CEO and they work with brands in New York, LA and obviously San Diego. And they acquired a smaller agency that was founded in 2017 that specializes in female focused lifestyle brands which was founded by 22 year old at the time she was 22 years old and the firm represented clients like Marriott, Hilton, SoulCycle. The financial terms of the deal were not disclosed. But for example, give you some context, BAM Agency was acquired last year for upwards of $10 million by a larger PR firm. And so it's a, I think it's a, it's a two brands, two agencies that are coming together. It seems like they're pretty aligned working with life science lifestyle brands and so kudos to acquisition.

Yeah, it's great to see Whitney Eckes having this win after building, you know, a business from scratch for herself. And like you said, they both have worked on some, some, you know, brands that we definitely know and recognize. I've had many of them on the Pot on the T podcast based on Anna making intros and both were actually are very engaged members of. So yeah, it's great to see this partnership come together and you know, while consolidation does mean certain things in the world. Whether it's you know, jobs shifting and changing and optimization. You do see growth coming from that as well. Just like the crop our brand growing and servicing being able to help bigger brands as well now as well too. So congrats Whitney and Anna for let's you know it comes the bad as well. And one of San Diego's bigger brands, a Quadel Ortho unfortunately had to let go its CEO Douglas Bryant. What do you, what do you know of this news here?

Yeah, I was kind of, I was kind of sad to hear the news that they fired their long term CEO who's been there for the last 15 years. Quite a orto they rebranded. They were just quite l a few years back. A few years back. And they've really found some success during COVID because they created a solution that was around COVID testing and this is a publicly traded company and as you can imagine their stock surge during 2020, 2021 and you know they reported their earnings on February 13th and they weren't, it wasn't you know meeting investors expectations. And so the stock price fell 32% and because of that the board actually forced the CEO out. His name is I think Brian. I remember talking to him and they had a great year during 2021 and yeah, it's unfortunate to see that you know he got fired but you know that's what happens when you don't perform and meet investors expectations.

Yeah. And like we talked about a few episodes in a row now we've had a few companies like this. Q Health also definitely benefited from a whole new market popping up which is at home diagnostics and you know diagnostics for a very specific need Covid and you know they worked on diagnostics pre Covid obviously something they switched to Covid now they're gonna have to switch to the next thing since the COVID market has started to dry up there. Unfortunate to see especially because they're actually a very public brand. You actually see them sponsoring most of our sports teams. I know I can picture their sign in the outfield Padre Stadium. Quidel is very active in the community in of getting their employees engaged. So you know they're, they're public company this to a certain regard, this is business but hope to see the bounce back into the to the next area that they focus on here which I'm sure they will do or the stock will go the way that stock does when they see something like this which is down. What other funding news came up on your highlight? I know we got Rally Corp here, which is a serial founder in the space that. So it's great to see take us through Rally Corp. And I'll add some light there too.

Yeah. So Rally Corp at a high level from as I know it's they, they describe themselves as the world's number one testing texting platform for nonprofits. This is an early stage company. They raised about a million in seed funding, I think three quarters of a million. And you probably have more details on the founder but I've heard about this company before, it's been on my radar and I think they're doing something interesting with the texting platform. It kind of reminds me of another, another company that was working with nonprofits. Classy, for example. So I think opportunity there, you know of a tech company working with nonprofits. That's definitely a growing space.

Yeah. So founder and CEO James Martin senior has been in the startup community for a long time of San Diego. He previously had a company called Monk Development with Etienne de Bruyne and one other. Those names escape me of who the third co founder was. They had eight to nine years together of building software for the religion space I believe and they sold the business back in 2015, 16, 17 timeframe and everyone kind of went off and did their own thing. And if I remember just before COVID James started up Rally Corp and he was doing some testing of kind of building customer feedback loops for nonprofits. So helping them really understand build campaigns for giving but based on really getting real feedback and data on what do people really caring about with giving of their time and money. And I actually even remember him running early tests of his technology at the WeWork in downtown on B Street. And we used it, I think For Startup Week 2019 we used some of their texting tech. We had like little trifold signs up on tables where you could use to get in touch with a mentor like instantly kind of thing. So we have some history of using the tech over time which is great to see their continued progress here around that. And we actually. Texting tech is actually not. It's actually got some roots in San Diego. There's, there's a, a company that comes to mind for me called Zingle which built texting technology for people to be able to communicate with hospitality. It started first with like being able to text in your order. This is like 10, 15 years ago. The founder of that company for Blakely built texting tech that eventually sell to Medallia. So yeah, texting technology not, not necessarily unique to San Diego to Rally Corp here we've got some, some, some background. We even have some deep Twilio roots here who are kind of known as the router of the texting tech world as well too. So great to see Rally Corp doing well and hopefully it's coming from a pool of continued dense talent here and we'll keep track and give more data as we see them continue to grow as well too. Another company that recently raised a good size round in the digital healthcare space is Headlight Health, more focused on the mental health area of practice. What do you know about Headlight here, Fred?

So Headlight for me honestly came, I just saw the press release that they were raising 18 million in funding. First time hearing about them. But yeah, they're a mental health startup and they're basically connecting consumers with mental health professionals via their technology or their platform. And yeah, I think for them to raise 18 million they're doing something right. And I'm curious, you know, I'm sure they're going to use this funding to, you know, not only scale up their platform but also hire here in San Diego. They remind me of another company called Equipment which has created a platform and serving folks with eating disorder diseases, which is another company that's raised I think over 10 million in funding. And so for me the headline is there's a mental health startup that has raised some funding and they're growing and they're using technology to support people with mental health issues. And so there's a social impact on it as well.

Yeah, and a few other mental health companies say like Concert Health comes to mind as well too. This is more of like a white label platform that helps, helps general practitioners immediately bolt on like a mental health practice to them. So that comes to mind there as well where it seems like Headlight Health is a bit more of a actual consumer kind of brand that connects people to the health providers that they need now. So great to see. I do believe they're kind of split San Diego and Salt Lake City as the teams have kind of grown up over time. But the founder Manish has been here and kind of started it here in town, I believe. So great to see kind of the density of the, the digital health space continue to grow here as well too. Let's go over to more on the investor side. I know we've got some, some of our local investors who recently participated in a rather large investment in, through one of the biggest names in AI right now, Anthropic. You wanna touch base on this investment opportunity.

Yeah. So if you are Subscriber to the newsletter. You probably would have got wind of this on Friday. Basically the headline is Qualcomm and Intuit Ventures are piling into a AI startup. One of the hottest AI startups in the valley, which is backed by Amazon and Google. And so Qualcomm Ventures, which is, you know, headquartered here in San Diego, Intuitive Ventures, who has invested in other startups including Drata, they're investing in Anthropic, which is a fast growing company competing with OpenAI. They're now valued at 15 billion which is insane to fathom. I think OpenAI has a valuation larger than that. And to see Qualcomm Intuit get into this round signals to me that big tech and corporate investors are placing bigger bets on AI startups for a number of reasons. And I think it's pretty big news.

Yeah, yeah, I think it's still or not still. There is the big platform plays right now that people are all trying to get a part of, get into for sure. Many people know GPT, ChatGPT, GPT 4 people are starting to get to know what was barred and now Gemini by Google. And really Anthropic is kind of a almost third leg with its cloud AI that's powering a lot of behind the scenes tech as well too. But valuation wise is definitely getting up there too in terms of big AI platforms here. Yeah, it's going to be interesting to see as people because this is still early days of the platform plays and the applications of AI of like where all these go. So you know, while it feels like 15 billion is a is late stage, this might be pretty early stage actually in terms of adoption and even where AI is going from here, if you look at kind of the hardware side of AI, you know, you've got Nvidia, which is a $2 trillion company powering a majority of the world's compute for AI right now. So yeah, the AI kind of investment world is, is crazy from an investor's perspective like me and what was said at our our panel a few weeks ago, you know, there's pieces of it that feel like a bubble and there's pieces of it that feel like legit and real and it is the new world order. So great to see our local companies putting money in which stand to gain benefit, you know, the community as profits are coming back and returned and they're learning, you know, about where to invest more resources because Qualcomm certainly is putting hardware into the AI space as well too and into adventures same. They are absolutely learning how can we optimize their products using AI as well too? They still have products that enable people to do taxes on their own. Man, AI feels like something that should be able to do everything for you down the road as well too. So all good things and I think early days, I think we'll see a lot more of these kinds of investments here as well.

And before we jump into events, I just want to add that San Diego is home to a number of corporate VC firms. So Qualcomm Intuit is one of them or two of them. There's also Dexcom Ventures, Resmed has a ventures arm, Aluminum and so there's a few corporate VCs. And so if you're a founder looking to raise funding, you know, it's good to keep in mind of these, you know, corporate investors are always looking at early stage investments as well.

Yeah, and maybe not based, not headquartered here, but partners of investment funds from Sony Salesforce and Slack to name just a few more are also based in San Diego too. So yeah, don't, don't skip over the corporate venture. You get a lot more than just cash when you get that for sure. And speaking of where you can meet some of these people are events great to meet and run into people working at some of these companies. As always, we got to thank the Social Coyote for listing it out easily for us, which is a, a newsletter you can sign up for, linked here in the newsletter. But coming from both of our youth, Fred and I's UCSD roots is the next start our demo day coming up this week. Have you, were you in Starter or have you gone to a demo day before?

Yeah, I think we've talked about them in the past.

Starter.

Starter is the accelerator program under Rady School of Management which is the business school program at University of San Diego or UC San Diego. And it's ran by a lady named Kim, Kim Davis King, who is a long time investor, community builder and leader. And the demo day is their annual presentations other startups that are going through their accelerator program. And so it's a cool opportunity to network and meet people that are building companies but also looking to invest in companies. So it's a cool networking opportunity that we discovered to Social Coyote.

Yeah, great to see. I recently was on campus last week at UCSD giving a talk to Greg Horowitz venture capital class which was awesome, about 100 students. He teaches it both at UCSD and at Stanford. Same class in a sense exposing people to what teaching students. And it wasn't just undergrads, it was Grad staff, researchers like. And it was open to the whole campus to learn about venture capital and to see that they're building companies and have demo days for the public to come and watch is great as well too. And speaking of another organization that actually has been doing a lot with UCSD is sdx. They actually started a weekly, I think it's a bi weekly AI coffee chat with the Data Science Institute here. Sorry, I'm just pulling up the event. So SDX has become a bit of like our AI hacker community here in San Diego. They've put on full on hackathons, they've done a month long hacking house, they do AI community chats and they're doing this event this week that will be at the HDSI Coffee Club. It's good to see them kind of opening it up to the larger community here. I know they did a few test runs for a few weeks in a row, but hdsi or as it's known as the halisiolu Data Science Institute, spun up and funded by a prominent UCSD alum, Dana Helisiolu, the first employee of Facebook has really put forth a community led really by Andy White, day by day, who works for Keshe Ventures, which is his venture fund, to really bring together data science community, which is really powering the AI revolution here. Have you been to one of these SDX events recently, Fred?

I've seen the pictures. There's always a great turnout, I think about 1520 folks who are all passionate about AI. I've heard feedback that some of the meetups are a little technical. So if you are interested in learning about the AI stuff from the technical standpoint, these gatherings are definitely for you and it's great to just network and kind of understand the early stages of AI and what are the implications and the opportunities. And yeah, the organizers chat. Laurie is a strong community builder and it's great to see him supporting the next generation of startup ecosystem in San Diego.

Yeah, I just love seeing so many more events pop up around this with very specific focus and I'm seeing more and more interest in more AI events. If you see on Twitter and the startup Slack people just want to start more and more around it, which is great, which means, you know, more to go to or figuring out how and which are the right ones to go to. So you can hear it from us here. Find your community online as well too, but get the listings out of Social Cody. The last event we'll highlight here this week is San Diego CTO Talks, which has been a monthly Recurring thought leadership group put on by the Arcus Nexus team down in Tijuana, which has been awesome to work with Dyra and the team connecting technical leaders around a specific topic. So this week they are leading the February CTO talks here as well. We'll actually be doing a collaborated Fresh Brew Tech and CTO Talks event in March which we'll talk more about in the future. But this week is downtown at Edge's office in over in Little Italy and they're going to be doing Time mastery talk with 15 minute projects which should be great. So sign up for the CTO talks which is linked here in the show notes here as well and we will look forward to seeing you at an event soon. Anything else on your radar, Fred?

No, we got a full, we have a full plate. We talked about the stories, the events, the funny news and now it's time to get back out there and start connecting with more founders and investors.

Yeah, looking forward to it as well. Thanks Fred. See you as always out in the community and here online. You can find us@freshbrewtech.com to find both the newsletter and the Tacos Tech podcast and you can go to Fred Substack linked here. Make sure you subscribe for in depth evaluations of tech companies and tech leaders here in town. Fred, as always, a pleasure.

Always a pleasure, Neil.

Thanks.

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. Tech is on smash border green guacamole keep accountants counting beans Contador cuentan frijoles Founders trying to raise some queso la vida San Diego school of rappy wrapping 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 cost angels by the ocean watch the sunset La Jolla shows entrepreneurs trying to get funded When San Diego Startup Week is popping in the summer Oceanside to Tijuana St. Before the 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.

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.

Sa.