This Week in San Diego Tech News - October 17, 2023

Foreign hello, this is this Week in San Diego Tech News with your host, Neil Bloom and Fred Greer. Fred, how you doing?

Hey, Neil, Happy Friday. Doing pretty well. How about yourself?

I'm doing all right. It has been a tough week. I'll be honest, it has been a distracting week and especially for me, specifically the Israeli news of the, the Hamas attack on Israelis has really been sitting with me in a very distracted way. I have family in Israel. They have people missing still. We're hostages and it's hard to sit with and everything else feels a little trivial. But we have to, you know, sometimes we dive into the work to distract ourselves and know that what we're working on is important at this moment is its own regard as well, too. Luckily, I have good family around me too, to talk to this and a lot of friends who've reached out to chat with. In fact, today I'm chatting with another family office who are kind of going through something similar. So without further ado, let's, let's dive in and do our show. I'm Neil Bloom with Fresh Brewed Tech and Interlock Capital, both a media tech platform and investment group. And I've been thrilled to be working with Fred for a number of years and now co hosting this show together. Hey, Fred.

Hey, Neil. I'm Fred Greer. I am a startup and tech journalist here in San Diego. I also write a substack called SD Founders, also Business of San Diego. And happy to be here to talk about this week in San Diego Tech.

Good to be with you as well. You put out the Q3 funding report, which, you know, so great to continue on consistently every quarter to put together what's been going on over the last three months. Why don't you take us through and dive into it with us?

Yeah. So at a high level, 1.1 billion was invested last quarter in Q2. That was pretty on par. We raised about 1.1 billion. So pretty on par with the last quarter overall. We looked at the top software deals, top science deals, consumer deals. So for software, we saw Silt Shield AI, they raised 114 million. We had linear app raised 35 million. We had some science deals that, you know, in the 100 to 200 million rounds, as well as consumer deals, ourself is like a beauty, a beauty company, beauty, biotech company, they raised 50 million. Nixon, which is like a legacy watch company, they raised 23 million. And so across the board, you know, it's not just, you're not just Life sciences San Diego, yes, is a heavy life science hub. However, it has software and consumer deals which is great to see continue being a trend.

Yeah, it was a really wide range, diverse group. A lot that we covered throughout the quarter and a lot that were still new to us, which was funny enough. Right. Like it's interesting to see deals come after the fact and we weren't even aware of it. And I would say you and I are probably sitting on more of this data than most people are looking at this. So that was interesting to me as well as, you know, some of these bigger non biotech deals, like a beauty line. Also interesting to me. A lot of Carlsbad based companies kind of stuck out to me to see some north county companies jumping out here and, and getting some raises. So those are some of the interesting things that jumped out to me. Should we jump into a few other pieces here? I don't want to jump the gun on IPOs, but that was something interesting to talk about.

Yeah, let's do it. I just want to call out razeebio. They had one of the largest biotech IPOs this year. They've had an oversized IPO of 311 million and that started by a local biotech investor. So that was great to see. And hopefully the IPO markets will open up in 2024. Vuori is planned in rubric to go public next year and we'll love to see other companies continue to go public and raise funding. So great to see that as well.

Yeah, it's felt like quite a desert of no activity. That's the, that's the public markets macro in general. But San Diego always is, you know, kind of been even a little less in terms of participating in the public markets. So I hope this is a trend, San Diego specific, around more IPOs here and specifically more bio, more non biotech IPOs would be great, especially to some of our larger software companies. Anything else you want to highlight here.

Also too, we had some, some pretty big M and A news. You know, obviously the Union Tribune got acquired over the summer. San Diego MLS, they're investing heavily. They're spending 150 million on a new facility, Alumina. They, you know, actually divested their deal with Grail. DTX Pharma was acquired for 1 billion. So a ton of M and A activity happening in San Diego. Some, some big, big deals and it just speaks to the caliber of our ecosystem. It's definitely maturing and we're seeing a ton of activity from tech to life science and even sports.

Yeah, it's true. The sports thing's interesting to watch. I don't know how we'll continue to compare, contrast this with tech companies because I don't know if there's ever really a liquidity event here, but. Well, there is. You know, they potentially could stay private for 10, 15 years. Our software companies have been at this point. So I'm glad you're including that. It is sad to see, you know, some of the M and A. We don't talk about the underside of M and A, which is like losing talent, you know, but UT's M&A deal really has just kind of cut the talent out of this. A private equity deal that is just shaving off expenses. Ut, one of the few papers we have local to San Diego, has been through a pretty rough ride over the last few years from merging with LA Times and even. And that process was. Was rough. And now you can see, like we highlighted on a few episodes ago, we lost some pretty strong talent with Mike Freeman at the ut. So no one's covering our big enterprise companies right now. On the tech side like that Illumina deal of the divestiture has been Mike Freeman through and through, of him saying at every step, what's happening with Illumina, what's happening with Grail? What's the bigger picture here? What does that mean for San Diego just now? Just, you know, a bullet point, unfortunately. And I maybe should lead into one of our next stories here with the the San Diego Business Journal, a paper that you have worked with in the past. I've worked with as well, too, a little bit during COVID The publisher, Barb Chodos, is leaving the. The publication, which, you know, is another now uncertainty for one of San Diego's few publications focusing on the business community. What, what's your take on this, Fred?

Yeah, so I heard the news as soon as it was posted and I left a note for Barb. You know, I said, wow, what an incredible run. You know, Barb has hired me out of college to work at the San Diego Business Journal, and she's been a huge advocate throughout my journalism career. And, you know, she's an extraordinary leader. She's made sure all the voices were heard throughout San Diego. And, you know, ultimately she's transitioning to a leadership role at the Coachella Valley Chamber, which I think she's going to do well. She loves the Valley and I think wherever she goes, she's going to continue to thrive. And it was a huge loss for the San Diego business community. And several, several, I think over 40 people reached out on that on that post alone, you Know, talking. Talking about her impact that she's made on the community.

Yeah, I remember Nels. Was it Nels Jensen Prior who had the role in his transition and what it was like to find someone new. And I know Barb came in from the Coachella Valley for this. I don't know if she ever fully moved or not. So, you know, all that is tough for San Diego. So thankful that we're doing this together. You've got your substack and continuing to put out content because there really is not much out there. And the business models of the UT in the business journal have been a bit antiquated as well, which has stopped new people from joining in on even tapping into reading some of this. Right. So the fact that you are listening to this without a paywall is almost a big deal to its own regard because that stops so many people from tapping into reading the ut, the business journal. So anyway, I hope, well, one, one that we can maybe as a group help recommend someone who should be running it, or maybe it's a time for it to be acquired and kind of owned by someone brand new who has new ideas. But in either case, a change is happening and you know, maybe it's a time for us to step forward and help with the change as well. Too. Other, other things going on. Let's talk to the Qualcomm layoffs. So they just announced in the last 24 hours that they're shaving 1200, which may not be, you know, hugely significant in terms of Qualcomm's total population of about 30,000 people. But you know, it's a sign of the times with Qualcomm of what's going on with them, which they're. Qualcomm is diversifying and understanding that their future is not given to them in handsets alone. They need to find other revenue streams, much like a lot of other businesses are figuring out these days as well too that, you know, as much as they achieved legal success in the courtrooms against Apple and FTC and others for their, you know, quote unquote monopoly for their technology, that doesn't settle it and they still need to prove that they have success and their technology lives on in other places. So as part of that of here, as well as the global macro of what's just going on in microchips in general, you see this huge movement of AI related devices with Nvidia just picking up so much of the new technology hardware needs, I gotta imagine somehow. Let's spill it into Qualcomm as Well too. I've been to a number of AI Focus events where Qualcomm is saying we are a player here and we're going to get to hear from them actually. Day, the last day of Startup Week when they are hosting Startup Week at Qualcomm showcasing a variety of tech uses for their both hardware and software ecosystems. But still, you never like to see Jobs being let go. And so what's your take on this, Fred?

Yeah, I actually heard the news through a friend of mine. He's Angel Sag. He's a principal analyst at More Insights and Strategy and he said, he said he thinks a lot of people knew this was coming, but it's still unfortunate nonetheless. You know, set, you know Qualcomm in San Diego, it has long, long ties. Apple is a big competitor who have moved here in San Diego and so they are actually stealing some market share from a chip perspective. However, Qualcomm is a big investor in AI and 5G and so I think they will be fine. A thousand layoffs, yes, it hurts the local economy. However, never bet Qualcomm out. They've overcome many, many obstacles and challenges and so they're going to be just fine.

Yeah, it's true. It is true. I happen to have been recently at the La Jolla Playhouse Innovation Night a few weeks ago where they honored Irwin Jacobs and you know, it was pretty, pretty awesome to see both the people, his, his network come out to support him, but also him, his how passionate he's been for so long. Like 40 years of, of tech, innovation and community. You're right. Like you can never bet them out. Uh, that's for sure. Not when you've been founded on ideals around changing people's lives and community and making sure the community's connected around that too. So yeah, we will keep, we always will keep our pulse here. Even if we don't have Mike Freeman to tap into professionally. You know, he's always a text away to be like what's going on here? And Angela is great resource as well too. Let's talk one last funding that recently happened here. AI Driven Biotech. You're going to hear a lot, a lot of that AI biotech coming together. Two great worlds of San Diego company named Iambic snagging a cool hundred million to get towards clinical trials over the next year. I know they had, this is a series B funding for them, Iambic Therapeutics. What do you know about this kind of convergence of AI and biotech that's happening here?

Especially with this company, this is very early stage. I think they came out of stealth in 2021. They were formerly called Encantos before rebranding to Iambic. You know this latest raise, 100 million brings on some really credible investors. Lumina Ventures is an investor. Sequoia Capital is an investor. Bill Ratter, who was an early investor in Grail and chairman of the board of Grail is an investor. And so to see AI driven biotech company is something I'm going to be paying attention to because it's a convergence of biotech, health and also technology and artificial intelligence. And right now seems like they're well positioned to ride that wave. You'll be very interesting to see now that they have the backing of these credible institutions and investors, they will be able to hopefully move these drugs through clinical trials and do something interesting. So we'll be keeping an eye on this.

Yeah, so Entos is the former name of the company. They changed it just recently. The CEO Tom Miller is actually part of my monthly AI bio private group that we do. And now I gotta go look at our schedule to see when he is presenting because I know he has been a part of the last few and it'll be great to kind of get an update of where they're at based on this new funding and the technology that they are driving. So we'll report back on that and congrats to Tom and the Entos Iambic team on this new raise here. You've been busy, I'm going to put you on the spot here. You've been busy sharing a lot about some companies and people you've been getting tours with. I'm sure we'll be able to read from it, read about it in the SD funders substack. But I know you did a tour of Google, did some other tours. Anything you want to share of some things you've been high level been up to lately?

Yeah, high level. I actually got to visit Google's headquarters here in San Diego. As for people that know Google first moved here in 2014. They had a small 60,000 foot square foot office for their engineering teams. In 2021 they announced they were doubling their space to about a hundred thousand square foot with the full size NBA court, game rooms and more. And I, I knew a marketer who gave me an access and got to see the inside and really Google is growing. They have over a thousand employees locally now and it's just great to see, you know, Google's here, Apple's here, I think Amazon and so it just shows that we have a mature tech hub with these companies recruiting from UC San Diego and other universities. And so that was awesome. And just also talking to other investors and founders who have moved here from the Bay Area who want to get plugged in and I share that Startup San Diego is happening in October and connect San Diego's events. There's just a really, a lot going on in our community and so it's been awesome to experience it in real time.

Yeah, it's. I'm so glad to just see you out there and showing what you're up to day to day. People love to know what others are up to and that people are covering it and promoting each other. Including an event that happened just recently, the ties AI Shark Tank, which happened the evening of October 12th. This was a big coming together of AI, both Enterprise and startup. Actually was held at Sharp Healthcare's Innovation Labs. They had talks and demos by both like some big enterprise companies like Lenovo, Microsoft, Qualcomm, CX app and then they had a pitch competition highlighting eight local AI companies who are, you know, at the earlier stages, I would say. So the winners were announced. The Platinum award went to Icardio AI led by Joe Sokol. The gold second place to Matchbook AI Rashab Mehta. Silver Award went to Element Technologies led by Meredith Parody. And then they did a People's Choice Award led by Suman Kanaganty at Personal AI, which is gotten a lot of buzz, I would say the Personal AI which kind of makes sense around the People's Choice and it being so personal and people focused, it was a good nod to that for sure. My partner at Interlock, Al Bashira, was part of the judging team, which was a really good group. There's a significant amount of investors on it, including Paige Doherty who has her own fund, as well as Sirhat Pala. And then Rory Moore from EVO Nexus. Tariq Akbar, Ziaed Asghar and Michael Reagan all on the judging team to see what's the latest and any takes on your end. Fred?

I just think that the judges were, they represent, were well represented of San Diego's ecosystem. You know, like Al from Interlock Capital, Paige from Behind behind Genius Ventures, Rory Moore from Evil Nexus. It's a great way of getting the old school and the new school together to support, you know, the next wave of technology which will be AI. So I just think it's great that we have capital, we have early stage companies getting together for pitch competition and whether they win or not, they're going to go on and do big things or join other companies. So we love to continue to see this and more events happening around AI as it's taking the world by storm and other ecosystems like San Francisco and New York.

Well, it's great that you asked for that. There's a bunch of AI events happening, including sdx, which we'll link in the show notes. Doing an event every, every few days. So the 13th, 14th and 20th are their next events. They've done a hacker house, they've done some, some hacker meetups, very AI focused and they're doing some pickleball too, which I love to see getting out there and sweating it out together. IPOP AI has been doing two to three events a week in this month. Just come build on top of their vision technology. They're doing a bunch of kind of AI hacking. So go look for their events also. 14th, 17th, 19th, 21, 24, 26. So a lot more dates on the hook around AI. But let's go back next week. A big event. SD Tech Hub is doing their weekly happy hour. I know you've been going out to some of those events. What can people expect at a Tech Hub event? Fred?

Yeah, SD Tech Hub really brings out different folks, not just tech and life science. You have business owners, you have creators, people who are executives or, you know, up and coming in their companies. Mainly north county folks come to these events. However, they're really trying to invest and get people in. From downtown to Chula Vista and all around San Diego. They hosted an event twice, twice a month, bringing together the tech community and those interested in learning more about San Diego's Tech Hub. So I think they're having a happy hour next week. And yeah, just get plugged in. They also have a Slack group that's pretty active and it's a great organization to be a part of.

Awesome. Well, we'll just round out some quick other events coming up. Man, October, we're already halfway through. It's crazy. Startup Week October 23rd to 27th. Maybe we'll do a bigger highlight next week to just kind of highlight each day by day, just like what's going on so that people come out to the right day. But each day is in a different part of the region, including day two in Tijuana, which I'm looking forward to going to. So we'll do a deeper dive in the Startup Week at the next episode. Fred, remind me if I forget. 0111 conference. This is a CTO focused conference by seven CTOs, November 2nd through 3rd and the Ag Tech Hackathon November 2nd, 3rd and 4th 50 hours to either come bring an idea and get people to come work on it with you or join someone's idea and full facilitation around that from ag tech, food production and the technology and science for that. So a lot of events coming up. Fred, anything else you want to add here?

No, I think, you know we have a ton of events and I'm going to try to go to as many as I can and it's just great to see the momentum building from summer to Q4. It's exciting times.

It is exciting times. I will see you at those events. I'll also see people on the next Founders Hike first Friday of November. Look for a link from me on that LinkedIn soon. You can follow Fred on his substack@sdfounders.subsack.com and the fresh Brew Tech newsletter and Tacos and tech podcast@freshbroodtech.com Thanks y' all. Take care and we'll talk to you soon.

Thank you, Neil.

Thank you.