This Week in San Diego Tech News - Feb 13, 2024

Hello.

Hello.

It is Neil Bloom and Fred Greer. Fred, how you doing?

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

Likewise. Another good show on this week in cinema tech news. We're excited to be with you. How's your week going? You staying dry?

It's. It's staying. Staying dry. San Diego's finally getting hit by some rain and, you know, trying to stay dry out there.

Yeah, well, speaking of what's not dry is the M and A market for biotech.

Startups. Get the party Startups get the party started.

You want tech in 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 paella 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 standing puesto lucha libre and sombrero Got a shout out to coast Angels by the ocean watch the sunset La Hoya 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 into 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.

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. I'm Neil Bloom with Fresh Fruit Tech Tacos tech podcast focusing on promoting the San Diego ecosystem and interlock capital and investment community.

And I'm Fred Rear, startup journalist and editor at Business of San Diego, a substack publication covering the top startups and venture capital firms in the area. And glad to talk about got to be here today to talk about the biggest stories in tech in San Diego.

Yeah and when we say tech these days that's biotech and software and hardware tech. And you wrote a recent story about all the big single digit billion or even multi digit billion dollar M and A activity in the biotech space. And there is more to even talk about in Hibrix recently getting a $2.2 billion acquisition a med device company in South Orange County Axionis 3.7 billion acquisition just in the last few weeks. So already active here in February. What's your take on this? Just like the activity here?

Yeah, so a few weeks ago I published a piece talked to JLL which is a large real estate firm that actually supports the life science companies with their commercial real estate needs. And in the last month we've seen about 6 billion in M& A activity in just January alone we had multi billion dollar acquisitions. And now I'm reading the news and seeing that the IPO markets might open up for you know, there's more capital raises and we're going to see more consolidation of these life science companies getting bought up by companies like Merck and you know, Big Pharma basically.

Yeah, it's really interesting to watch. You know there's a bunch of other biotech companies who've raised post IP recently as well too. And you know IPO for biotech while yes, kind of an exit it's really just like it's like their stage C or D for the software world. It's just a place to access more risky capital. And so post IPO raises for Carlsbad based Tyra 200 million which they've been public two, three years already. Kura Oncology raised 150 million post IPO. But these are really still you know, early stage rounds. Just a lot of capital going into to the biotech world. And I think, I mean I think we should talk like more macro what's going on here. A lot of companies are changing post Covid. They're changing back to you know, the next drug to be go working on. Right. Or the next consumer or the next diagnostic that when all this time and attention went into vaccines and other remedies around Covid, Covid tests. You know it seems like they're the big companies are going and buying their way into which is very typical go buy a portfolio to go work on the next area of focus in the drug space. So San Diego is benefiting from that for sure. The capital is you know, recycling. We will see these next, these founders start the next thing. I guarantee that and it's, it's great to see. We just need to emulate that and learn from it. On the software and hardware side here too which speaking of you know is slower coming into Q1 already and, and honestly Q1 is typically a slow get going. I Remember every year Q1 is slower. It's always the. Probably the lowest amount of all four quarters of the year. But you know, things are starting to get active again. I know for us Interlock, we were a little quiet start of the year and now we're just committed to a new fundraise here with, with Visor which we syndicating inside our group. So a local software company that we're. We just launched a new syndicate deal on this week but an exciting one. What we love to see is repeat founders starting the next thing. So I think you've got a little scoop here on Xscape Entertainment.

Yeah, so diving into the scoop essentially I just came on my radar as a former founder who created a company called Excel Robotics which is a popular company that was covered in Union Tribune in the Business Journal and essentially they created you know, self checkout the without cashless like you didn't need to use your car to pay for your groceries. And he's now gone on to create a new company. He's a co founder at Eggscape Entertainment. I did some digging, I'm actually gonna be talking to him in a few days. The company's LA based, they're a gaming company and they're using virtual reality social gaming. So they're social gaming for using mixed reality headsets. And I'm pretty sure you've seen Neil, everyone has the Apple Vision Pro and I think it's right for opportunity. We're going to see a lot of companies trying to create new solutions for the mixed reality headset. So cool scoop there. They raised a 4.25 million seed round. So yeah, we'll talk more about that once we chat with them.

That's awesome. Love to see Brandon doing his next thing. Yeah, Excel was interesting. It was like a white label version of Amazon Go and they had a bunch, they had like 20 starters like pilots in San Diego and kind of lost track of them. So be interesting to see when you do your deeper dive scoop here. But like we said repeat founder and VR space is hot again all of a sudden with Apple man, the last week I've seen so many demos. You've seen some cool demos on mostly on Twitter. I feel like I'M seeing them all.

Yeah, yeah. I'm seeing all the viral content. They're doing a great marketing, marketing play there.

Totally another fundraise on our radar trust and will a local hometown favorite hard not to root for Cody Barbo. They raise an additional round of funding. There is actually a year ago with all strategic kind of on the banking sides like Amex Ventures and Northwest Mutual Ventures which is a big channel for them specifically in the, you know bringing this offering to as like a B2B product to like wealth management and others. So giving them another tool for wealth managers to offer estate planning. So that was a year ago. This year they're a bit more focused on kind of the media side and just like other channels to, to get to the consumer. So Comcast Ventures has a fund called Lift Labs that invested as well as corporate venture arm Touchdown Ventures. That Touchdown is actually they help spin up corporate venture capital firms within big corporate. So I believe they helped Erie Ventures join in on this round as well too. And if you see the Trestle brand like it's super consumer. They actually just, just in the last month or so they announced a big partnership with Matt Stafford and his wife. The quarterback of the Rams is a brand ambassador and a team sponsorship of the LA Kings professional hockey team. So they're doing big things to get in front of the consumer. So it kind of makes sense to partner with a telecom like Comcast to get in front of the consumer in that regard as well too. So kudos to the, to the trust and will team on continued growth. Another recent funding we tracked down is in the clean tech space. Aptera. They're a three wheeled electric vehicle. Have you seen this Fred?

Yeah, I've covered them in the past. They're a three wheeled vehicle that's focused on ev. They're, they've been around for a long time. They were started I think roughly, you know, over 10 years ago, shut down and they got you know brought back the past few years and they're now giving you know, pick up, picking up. Steve, as you can imagine this space is really, really, really challenging and they believe San Diego is a key market for them given how much sun that you know it has. Yeah, I didn't talk about the idea but maybe you can provide more color there.

Yeah, well you know they're building a consumer electric vehicle, three wheel, single passenger and yeah it's been pretty fun to watch. They're actually doing production and manufacturing all in North County. Carlsbad is where I've seen them growing out and you Know interestingly they've done a really successful job in crowdfunding so getting individuals who are interested in this to to invest. So they raised 33 million in recent crowdfunding. I think there is like 50 million last year in crowdfunding. So you know, for, for some people, especially a consumer, interesting consumer product, seeing success there. So congrats to Steve and the team on the continued success rapter. Can't wait for it actually to come out. I know I've seen one. It's usually they park one, they bring it out to the Connect Innovation Day but I'd love to start seeing them on the streets. So we'll keep an eye out for that. Speaking of Connect New fund Alert which we're excited. Congrats to Mike Cran on the team on bringing a a non profit focused fund called the TL Fund by Connect $15 million fund where they're going to be investing in a handful of cool companies every year. So the Cool companies event and program is you know, picking the 30 to 40 VC ready or, or series A ready companies, both a mix of life science and tech. And now they're going to you know, invest in a few of those every year and all proceeds of the carry in a sense just goes back to the fund to increase the fund itself. Kind of like like what universities do to a certain regard. Right. You know, kind of invest funds to keep it kind of an evergreen fund. So great to see and well needed in terms of getting more capital to our early stage market. What do you. I know you're going to do probably a feature here on TL Fund. Anything else you want to share on it?

No, I just want to say congrats to Connect. I think it's awesome. They do so much for connecting the companies to, to the capital and so it's great to see there's you know, some local money that's going to be going to some of these companies as well. I know there's a lot of, a lot of work happening behind the scenes to help San Diego become the greatest place to raise and build and scale a company. And Connect is at the center of it. So congrats to them.

Yeah. And speaking of which is a good shout out for people if you haven't applied yet. I believe you still can apply to the Cool Companies program. So we'll drop a link in the show notes here. You get multiple touch points a year with VCs from around the country who come into town just to meet you at the series A stage. So great program and we'll link it here this weekend. Coming up, super bowl which would be pretty fun especially we got 49ers playing the Chiefs. So kind of a west coast aim to this. And we've had a number of sandwich companies who have shown up in Super Bowl super bowl ads in the past. Who are you looking, who are you expecting to see this year?

Yeah, so the favorite part about super bowl is not only the game but also the companies that are advertising their products. And in San Diego there's a number of companies who've advertised in the past. I'm very curious who, who's who, who we find and, and we see on the big screen this year. In the past we've seen ClickUp, which is a productivity, the unicorn startup Q Health, which is a, a massive, you know, life science company here based in San Diego, Cut Water Spirits. You probably have seen them on the slopes or you know, at a brewery somewhere. Hologic Dexcom and June Shine. So we've, we've seen everything consumer life sciences and even tech companies advertise and trying to get consumers to, to know about their company. And you know, those spots are not cheap. Some of them can be millions of dollars for a 32nd spot. And so yeah, yeah, it's pretty fascinating.

Yeah. I mean, you know, speaking of a few of those just who I think could show up this year, maybe Qualcomm who are in the big mix of doing a diversification of everything besides just being in handsets. So maybe maybe trust in Will since they have this big consumer effort and about this year, maybe next year since they're definitely aligning with sports. Who else could we see out there? I don't know. Those are the first two that come to mind. So exciting either way. So keep an eye out for, for that one. One we won't probably see. Just kind of wrapping some news here. Q Health, unfortunately, Q, you know, went big into the consumer diagnostic during COVID Like they were actually the pro sports Covid diagnostic of choice for the NBA and a few other pro leagues and did great. Got some, you know, $500 million kind of deals to be the official tester. Well, Covid tests are a little out these days, so maybe not necessarily like they're downsizing workforce, but it's related to that. And so you know, I'm sure they've got other diagnostics they're rolling out. It's just not a big demand right now for Covid tests. So unfortunately to see CQ Health, which is north county based, I think they're Vista based And public seeing a little downturn there, but great consumer diagnostic talent that hopefully will find its way to other companies here in San Diego. Since we've obviously seen there's a big need for biotech talent here in town, I think that's it for our stories right now. We've got a few, right Fred? Yeah, that's correct.

Yeah, we're gonna jump into events now.

Yeah, we got a few events coming up. You were recently at the North County Meetup hosted by Hussein up at the up in Leucadia. How was that?

It was incredible. Yeah. So that North County Meetup happens once a month. This is the third time it's, it's been been held. It's actually held at the Leucadian restaurant or bar and I think it was about 40 or 50. All types of types of people. These are venture capitalists or startup founders. Ryan Cooter from techstars was in attendance last, last week there was a few investment bankers and lawyers and so you're looking to get connected into the starter community in North County. This is a great event and you might even meet a journalist. I was there and talked to the company. So that was pretty cool. That was pretty cool.

That's awesome. Glad you're you're getting out there. We hosted the Founders Hike last week which was super fun and it didn't even rain so we'll do that again. March 8th is the next one. We also did a welcome to San Diego Tech Virtual call this past Monday and I'm moving that to mid month. So we'll have kind of two things throughout the month to kind of get plugged in. If you're kind of coming from outside in the hike and the welcome to San Diego call mid month so look for links on that, especially on my LinkedIn. We've got our own event. Fred and I are hosting San Diego VC 2024 outlook on February 13th. So we've got, you know, over 50 early stage CEOs and local investors to chop it up. But also hear from some early and mid stage VCs on just like what are we, what, what's on our mind this year? What are we excited about? What are some challenges and you know, what kinds of companies are we funding. And then the Ag X Hackathon is coming up March 7th, 8th, 9th. We've already got a bunch of ideas that have been pitched to it which is pretty fun. So whether you have an idea for an ag or food production related startup or you want to join someone else's will totally fine to join in on one of the ideas and we'll for 50 hours guide you towards ideation, iteration and validation of the idea. So excited to see everyone over the next month. Anything else on your radar Fred?

No, I think you know there's plenty of opportunities to get involved in the San Diego community and you just got to find out what's what's where do you want to lean into. Like we mentioned a few organizations like Connect San Diego with their cool companies. We mentioned some, some events. Life science is red hot. So if you're looking for a job, life science is where to be and so there's really a lot of opportunities to lean in and we hope that you know our resource, we're being a resource to the Senator community.

Absolutely. Well keep giving us feedback when we post these online on follow Fred and I on LinkedIn and Twitter comment that what other stories you want to hear from us. We're happy to cover a broad range here and we appreciate your guys feedback and sharing this so that everyone you know gets more plugged in. So with that thank you all very much. Fred as always, thanks and we'll talk soon.

Pleasure. See you next time.

Startups get the party. Startups get the party started. Startups get the party. Startups get the party 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 Counting 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 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 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 beach tech leaders who believe stars are within reach we interview and founders who be shooting for the moon SD tackles 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 got it.

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 Tex. You know we got it. Hey.