This Week in San Diego Tech News - Jan 19, 2024

Hello, Hello. Happy Friday or whatever day it is that you are listening to this. This is Neil Bloom and Fred Greer with this week in San Diego tech news from the Tacos and Tech podcast. Hey, Fred, how you doing?

Hey, Neil. I'm doing great. Happy to be back to talk about San Diego tech news.

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 tacos and tech on smash border green guacamole keep accountants counting beans Contador Quentan frijoles found us 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 sun sunset La Jolla shores Entrepreneurs trying to 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 interview and founders who be shooting for the Moon. Hashtag SD TechOS with your host, Neil Bloom.

Come on.

Startups get the party. Startups get the party started.

Welcome to the TAcos and Tech PodC 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. Already middle of the month and it feels like could be the middle of the year. I feel like we jumped right back into it. Everyone took the holidays off and are just up and running a little background. Me, I run Fresh Brew Tech and the Tacos and Tech Podcast, as well as an investor with Interlock Capital. And this is Fred.

And I'm Fred Greer, author of Business of San Diego Substack and startup journalist who covers the San Diego startup scene. Happy to be here.

We try to get together weekly, ish to discuss latest news that are locally hidden our desks, as well as some events that have reached our inboxes that we may be attending as well. So let's jump right into it. SHIELD AI, Defense tech darling and unicorn in San Diego. Feel like every other episode we're talking about new round of funding for them. They increased, I think we reported on their initial tranche, like kind of their first close, as a lot of startups do these days at the later stages. Closed an initial 200 million in November, but have since increased their series F to a $500 million round. The press release from Shield says it's 300 million total in equity and 200 million in debt. And that is a lot of capital to, you know, increase this company's growth at a time when you see America, you know, at war in multiple fronts, in a whole new war that's like almost entirely drone focused. So pretty topical. Time for them to be grown out of this. What do you, what do you read from this, Fred?

Yeah, I think if you're looking for a startup to join, I mean, SHIELD AI is no longer a startup, they're a late stage company. At this point they're valued at 2.5 billion or I think a lot more than that now. Now with this new raise, they've been founded in 2015 and so it's incredible to see that they're finding this level of success and investors are excited. This is a rocket ship to be a part of and, you know, hopefully they use this capital to continue hiring in San Diego.

Yeah, what's cool about them is their hardware and software play. So it's just as much built a software that, you know, is an autopilot for both drones and for existing fighter jets. And then they have built their own drones and acquired drone companies to be pretty much the predominant drone. Especially quick, quick, small attack drone builder in town. I think another time we should do a deeper dive of just the drone scene of San Diego. We've got some mega drone builders here at Northrop Grumman and General Atomics as well as the whole drone platform from Qualcomm. So let's talk further about that in the future. But anyway, I just want to highlight and congrats to SHIELD on the continued growth. Why don't you take us through the next one, Fred?

Yeah, so this next one is a larger piece that I'm actually working on, but Johnson Johnson has acquired Ambrix BioPharma for two point I think $2 billion, which is the second largest biotech acquisition we've seen in the last two months. The other one for that was raised bio which was required for I think 4 billion. And so I'm actually going to be doing a piece talk to a few experts in the life sciences space to see you know, some predictions. And there's been multiple billion dollar acquisitions of smaller life science companies. And so yeah I think the news was Johnson and Johnson is acquiring a life science company, Ambrix Biopharma. And we see this all the time. Big, big Pharma is buying smaller startups to stay competitive. And largely what I was hearing from other, other experts in the space is when they acquire the company they keep the talent in house, they keep the employees in San Diego and it allows them to remain competitive in the space. And so we'll see more acquisitions of this. And this is a huge win for not only the founders of this company but also the investors and the employees. It's great to see them joining a credible company like Johnson and Johnson.

That's huge. The other billion dollar ones that come to mind Recently, Prometheus bio $10 billion in the last year and DTX Pharma billion dollar exit all within like less than a year time frame. This is massive. And for Johnson Johnson has already had a very large presence in San Diego especially at the startup stage. JLabs right being kind of this co lab space where a lot of our local biotechs start and kind of launch off from. It's great to see Johnson Johnson growing their kind of enterprise or you know big, big company footprint here as well too. So I'm excited for your story to kind of map all that. I know you know over the holidays we in new fund got our first tranche of returned capital to us from the DTX exit and we know there's more coming and that money goes right back into writing checks locally. So excited to see the same from, from the Ambix acquisition as well too. Let's talk a little sad story. Too simple man. This has been a story. This is I feel like one of those ones where we should tap Mike Freeman to be like take, tell us, tell us the story here Mike. Because tusimple autonomous trucking startup has officially shut down U.S. ops. They were and they were one of our lone recent tech IPOs here as well too that we were you know, excited about at peaked I think 8,9 billion in market cap. They've boomed physically in the UTC area with a ton of Engineering talent. But then international, you know, regulations hit them in a big way. I think it was found that and it was always known they had like China roots. I think it was found that there was deeper roots than expected especially in a technology that's got, you know, some pretty cutting edge technology. And so semi recently the CEO was, was removed by the board and there was a hunt to kind of figure out how does this company detach itself from its Chinese ownership. And it looks like they were not able to find a local buyer and so therefore have just completely shut down US operations. Super sad to see especially because I know a lot of talent that went there. There's talent that's actually flown both ways. I know that there's actually some talent that started at Tusimple and were part of the IPO and have gone to some of our later stage companies like Flock Freight was, was, got some of the financial talent from that. But in general we just, you know, you never, never love to see talent out on the streets but hopefully that's a windfall for any other company because it wasn't necessarily about performance with Tusimple. It was, you know, regulations and governance issues. What's your read on this Fred?

Yeah, it was unfortunate. You know, I hate to see bad news like this. Tusimple was one of the unicorn companies, tech companies in San Diego at the time. Mike Freeman did a great job profiling the company from the early days and even when it went public it was a real milestone that this was a cutting edge company that was creating self driving trucks and so they were competing with someone like Elon Musk and Tesla for the diesel self driving market. And it's a growing market and so they were expanding in I think Arizona and other areas and it really just, it's sad that you know, that the company wasn't able to find success. However, these companies inspire, you know, early stage entrepreneurs to dream big. This was a, a moonshot idea and they were able to raise capital, they were able to go public. It shows that it's possible to be done in San Diego. However, you know there's also challenges and so yeah, I'm looking to do some more research and understand what the complexities of it. It seems like it was a larger issue beyond just the technology and the idea.

Yeah, and like we've mentioned also, you know, the deep talent pool, especially in logistics tech I think is one who stands to gain here. They happen to be in UTC which has become the hub of logistics tech with Apple having a huge campus presence there. We know what it does comes from like a technology and it's in software in its handsets. On the same street, I believe is also lytics as well as platform science, a truck truck logistics software company. So like I think all these people have to do and I'm not trying to belittle the fact they lost their jobs, it's terrible. But you might just have to like walk across the parking lot and knock on another door. And I think they would be welcomed in open arms because of the demand and the amount of companies we have focused in this area of smart routing, mapping and autonomous. We have a portfolio company that's building better lidar sensors that if it was there and ready, I know would open arms, love to be working with people who've already got trucks on the road. So hopefully there's some silver lining here. But you know, pour one out for too simple, no longer being here in San Diego. Speaking of pouring on that though, breweries, San Diego Breweries, man. Like we have, we've got a 30 year history of leading the craft beverage scene and you know, maybe the, some said the peak has, has passed a few years ago and you could see that in some of the, you know, acquisitions like, like Stone recently being acquired by a Japanese Sapporo. But it seems like while the news was negative over the last few years of, of brewing shutting down or just continuing combining, I think we're seeing some news of expansion now. What have you uncovering here from Novo Brazil?

Yeah, so Novo Brazil is a young company. They were founded 2015 and they created this kombucha and craft beer. They mainly sell them in a can and they've been really popular among the younger, the younger consumer demographics. And so they're expanding their first retail location or a tap room location in Mission Valley. And this was founded by a guy named Tiego. And I think it's, it's really a sign that, you know, San Diego not only has tech companies, life science companies, we also have the breweries and consumer companies. We have Athletic Brewing and there's a few others that are in the non alcoholic space including June Shine. But Noble Brazil Brewing is something that you should have on your radar. They are up and coming and it's great to see that they're expanding to a physical location because they were largely distributed in Whole Foods and a few other, you know, friendly distributors. So great to see that they're expanding. And you know, San Diego is home to a lot of brewing companies.

Yeah, and actually a lot of Kombucha too. I think I Can count five different kombucha companies hard kombucha here alone. And I think that speaks to the resiliency of our founders here who, you know, see a trend or force a trend when Kraft or maybe just IPAs aren't as popular. Man, the can cocktails, the hard sparkling, the kombuchas. I'm now seeing a new trend in non alcoholic cocktails and non alcoholic everything else and kind of good for you in a can related things. So, you know, I think it's important for us to continue to talk about that because you're right, it is a big cluster of our business community here. So thanks for highlighting them. I think they started down in south county, if you will, down Chula Vista. And it's great to see them coming to Mission Valley. Speaking of down in south county, especially near the border, is a huge area for logistics and Amazon, our next story here has recently opened a super cutting edge new logistics sorting center that is entirely robot robot powered. So really cool story by the ut. I think they must have gotten a tour to show off their new entirely robot powered sorting center right in Ota Mesa right at the border. Which kind of makes sense for how much comes over that border. Have you ever toured one of these logistics centers, Fred?

I have not. But this sounds really cool and futuristic, you know, all robots in the distribution center. Amazon's already been growing here from a corporate standpoint and so it's pretty fitting that they're setting this up here in San Diego.

Yeah, and actually little known fact of the team that's in Amazon, it's local. They actually have a whole local robotics group. So team members who in fact who have worked at other local robotics companies like Brain Corp, have gone on to work at Amazon Robotics here in town. I don't actually know if they're working on the sorting robots, but I do know there's a whole kind of robot internal robotics team as well as a Amazon consumer robotics team as well that works on builds Amazon consumer products for sale as well too. So lots of robotics things, lots of logistics tech, all great to see right alongside each other. That'll do it for some of our news. There's some already events are already popping up on our calendars. Anything coming to mind for you? We're sharing here that you're going to be up soon.

Yeah, I think Startup San Diego did a nice collaboration with Jonah from Social Coyote. They kind of, you know, did a post on here's are the top events in January and February that you shouldn't miss. You can check that out by going to start San Diego's website looking for their event calendar. I also posted on Twitter that Lenny's newsletter, which is like a more tech focused newsletter where they talk about product management and tech, they're hosting an event in South Park, San Diego and that's going to be bringing together folks from like Qualcomm and Facebook and startup executives. And that's happening in two weeks. It's going to be on the first first month of the 23rd. So yeah, if you're interested in that, there's a tweet on my Twitter. It's my first and middle initial and last name. Also trying to think if there's any other events, what comes to mind.

Neil, what else we got going on here? The I am speaking on a panel with at the bitcoin meetup on January 23rd called Investing in Current Macroeconomic Conditions. Now while it's a bitcoin meetup, me and I am no bitcoin expert per se, I've been involved in crypto for a long time. But on my panel with me is Vinny Lingam, like one of the bitcoin oracles who can speak to crypto, which is having a moment right now for sure. But we really plan to talk about larger macroeconomic conditions, not just affecting crypto, but in fact affecting the tech community in general. So come join us at Edge's office in Little Italy on January 23rd. January 30th is the Escondido Ag X gathering, bringing together farmers, growers, scientists and technologists and you know, maybe a little ahead of ourselves, but the next founders hike is the first Friday of the month and the new founders plunge, which Fred will be joining us on next time on February 2nd. So there's a few of the things that come to mind for me, I think also one of our startup incubators here, the recruitment, which is part of the Mira Mesa Community College startup incubator, is doing a ribbon cutting. What do you have the date on that, Fred?

Yeah, the date is going to be January 24th. And so the lady who runs that is Tanya Hertz. She's been doing this for a long time supporting entrepreneurs and they specialize in helping women and minority entrepreneurs from diverse backgrounds. They're having a ribbon cutting for their new location and that's going to be, yeah, January 24th from 3pm to 6pm and they're going to have Congresswoman Sarah Jacobs there and really to showcase some of the entrepreneurs they have in the accelerator program. And if you're familiar with entrepreneurship and the different accelerator programs, the REC is definitely one of those that you should, you know, follow because there's some really cool companies that come out of there.

Yeah. And it's, it's true. And Tanya has been a long time serial entrepreneur but also entrepreneurial teacher as well, both at SDSU and at Miramar. I believe she started the rec, founded it pre covered. So excited to see that coming to fruition. Now I think it's actually started during COVID so it's great to see them doing like kind of this physical coming out that will do it for us. We mentioned check out the Social Coyote, which is the kind of the this the newsletter for events specifically tech wise in San Diego. Subscribe to Fred's substack@thebusinessofsandiego.subsect.com and freshbroodtech.com for this podcast and other and on a future episode of this I'm going to talk to you kind of talk, tell like the third, third pillar that I hope to provide between you and Jonah. I feel like we're a bit of a triad here in terms of communications wise about the ecosystem I'm going through. You know, figure out what my voice is throughout the year. And I look forward to sharing more of that with freshbrewtech.com as well too. So thank you all very much. Good to have you here. Fred, always a pleasure.

Always a pleasure. See you next time.

Cheers.

Cheers.

Startups get the party Startups get the party started. Startups get the party. Startups get the party started. You want tech 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 found us 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 standing puesto lucha libre and some gotta shout out to 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 hashtag SD TechOS with your host, Neil Bloom.

Come on.

Startups get the 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, it.