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Startups get the party. Startups get the party started. Startups get the party. Startups get the party started. You want tech and tacos, Tacos, 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.

Hello. Hello, everyone. Neil and Fred are back at you. Good to see you. Good to hear you. And Fred, good to be with you.

Neil, it's always a pleasure.

Always. Well, I am coming at you from Austin, Texas. Yeehaw. I've been in Texas for a number of days. Started my week in Dallas to see the trust and will guys, Cody and Daniel, who live there. And I told them, hey, anytime I'm in Texas, I'm coming to see you guys, man, it was cool to see Dallas and their office is great. And in their little office suite is a bunch of other founders, of course, which is cool, and a few investment funds. So two doors down was the former head of techstars anywhere, Trey Bowles, who I went over to say hi to. And he immediately invited me to a Dallas founder dinner that night held at their local J.P. morgan client center, which was great. So it was really great start to the week to see, you know, connecting the San Diego nodes, if you will, here. The dinner was totally about Dallas texting, Right? It was so cathartic to hear them be like, these are our opportunities. This is the momentum, this is our assets. What should we go do? Right? It was great. I loved it. And they even asked, like, what's your perspective from being outside of town? So thank you to Trey and Daniel for including me in that. And then I've been in Austin last few days, hosted a little Austin happy hour. Founders and funders, got some portfolio companies here, have some LPs here, and it was just great to catch up with people. And then it's been TechCon Southwest shout out to Faisal and crew, launching a new city for TechCon. So we did the opening party, and then today I'm moderating a panel on just kind of the state of VC with a bunch of VCs but a bunch of San Diego's flow. As you can imagine, techcon is a very San Diego community. So it's cool to have the merging of the communities out here in Austin. And it's very fun to have barbecue and Waymo cars, autonomous robot cars. So it's been a good trip. How are you doing?

I love to hear it, man. Yeah, things seems to be picking up. February is a busy month. We had super bowl this past Sunday. I think I was telling you before we hopped on the call today that there seems to be an uptick in just activity locally in San Diego from tech fundings to biotech deals. Been full bit, full week of meetings and I'm actually headed to a meet with a biotech CEO right after this podcast. So yeah, all kind of things going on and you know, great to. Great to be back talking about the biggest headlines in tech.

Yeah, you bet. You're headed to a portfolio company of ours. Our first investment out of Rising Tide Partners. So I'm excited to. To hear what you hear from them. Shout out to the team there, which we cannot say, I guess let's jump into it. Super Bowl. We always love to do this once a year. Where the San Diego connections at the super bowl we mentioned on a previous podcast Dexcom had been in there. There's a few companies that we noticed some San connections to. Probably the biggest one was the Manscape ad. In true manscape nature. It was gross and it, it left you remembering because it's a pile of hair singing in different places. So a Manscape ad jumped out at me for sure. One of our local agencies, marketing agencies did a, did a, an ad for Spruce, which is owned by I think Proctor and Gamble. It's like a pet food brand. So Raindrop Agency, who has done a bunch of the marketing for local companies like Dr. Squatch and others, they po. There's a link in our show notes here. You can go watch the, the, the Spruce ad. What are the other ones? You want to mention some of the other ones here, Fred?

Yeah, so we also had turbotax, Intuit, they had a great ad. You know, Intuits obviously based in the Bay Area, but they have a large presence in San Diego, obviously. Tax season's right around the corner. It's already here and so it's great to see them in the mix. As well as Poppy and Pepsi, they also had a Super bowl commercial as well.

Yeah, well, TurboTax was originally a San Diego company that was acquired by Intuit. So it's, it's its roots are here. And I think they have 3,000 people in San Diego still who are.

Who do that.

And I think it was acquired in the early 90s. I have not been able to like track down the original founders. I would love to and get them on and talk about, you know, that impact Poppy, the soda brand or the antibiotic or probiotic soda had a number of local investors in it which was great when they got acquired for like 2 or 3 billion by Pepsi just in the last year or so. So those are the ones that stuck out to us. If there are other ones, obviously there were a ton of AI company ads. Those dominated a lot of these and a lot of consumer brand ads. And then what's come since is the controversy. So I don't know if you've been seeing Ro or and him and hers and Wegovy, all these are now being sued to each other because of their GLP1 products. So that's been interesting. There's been the controversy between anthropic ads about no ads in your AI and GBT announced ads in AI. So that's been controversial how they use their ads as a platform for that. So yeah, it's been interesting to see the outcome of these ads that where it put a lot of people, a lot of the companies face to face at each other here. But yeah, all consumer brands and AI and tech companies, it seemed like kind of dominated the ad space on this year's Super Bowl. Less and less Anheuser Busch kind of ads that we used to see all the time. All right, let's talk some other tech news. There was a good event in the last week where there's kind of the San Diego Regional GDP economic outlook event that came out. And so we have two links in here. One's from the Union Tribune article from that event. And then the former head of I think it was. There's another UT kind of oped around what's his take of where we think we are. So good articles around that. What are some of the takeaways? I thought that'd be interesting to talk about. One, GDP just keeps growing in San Diego. So California is already known as a powerhouse. Obviously it's shot back up to the number four largest economy in the world is a huge part of that. And so what came from. So this report and this event presented 2024 data that is kind of all we have our hands on these days. And it showed that San Diego's GDP rose in 2024. 2% to 267 billion, which is massive. Bigger than 20 states. So our county bigger than 20 states in the United States, which kind of makes sense. We're top 10 population wise as a county. I think we're number 7 population wise. But just to show that know we're pretty much the 10th largest GDP as a county also. So population and economic driver is pretty big, $267 billion GDP, pretty massive impact. And while our GDP dropped in 2020, it has continued to grow every year since from 2021 all the way through now. Now we don't have 2025 data, which would be nice to already have. But yeah, take us through what Any else kind of jumped out to you, Fred, from this economic report?

Yeah, I thought it was a great article. It was. Headline was my My worries become. We become Santa Barbara San Diego Economic Event Discusses Challenges Opportunities the article highlighted some topics discussed like housing cuts to federal funding and segregation as well as some growth around AI as well as economic programs across San Diego County. This event was taking place at University of San Diego. They had about 200 attendees and they do this every year. So this is their 42, 42 second year annual, you know, coming together, talking about the growth and challenges with San Diego. I mean obviously we're healthy, we have a lot of diversity of economies. We have biotech, defense, tourism. There's some emerging sectors like consumer and others that are helping drive growth including defense, tech and software and AI. Obviously there's some challenges for sure. I actually had an opportunity to attend a breakfast with the mayor hosted by naop, which is a local real estate organization. And the mayor kind of talked about how, you know, San Diego still has, you know, some things to work through. You know, he emphasized that he's doing his best to really push, you know, new developments and new growth in San Diego. But you know, it's a multi pronged problem where you have different groups with different agendas and it's hard to get things done. A lot of red tape and things have to go through approvals. It's challenging. But I think San Diego bodes well long term to thrive and succeed as innovation economy and drive business growth and gdp.

Yeah, and that was kind of the point of this article. You mentioned by. What was his name here? Daniel and A Mark, the chief economist for San Andre Regional Polishing Innovation Center. His, his whole comparison to Santa Barbara is that you can't, you can't afford to live here. So, so the pot, the economic, the opportunities here are great if you can afford it. Most can't. And in other places he names, he uses Santa Barbara, which is semi important. It's one of my favorite cities but it's, it's, it's kind of true. Like no one can afford to actually live there. And so you end up losing talent pool, you lose density of industries when you lose talent and then everything, you know, things look good now until they don't. So it was a good point. Right. Like housing and affordability is probably on the mayor's big agenda. Right. I would imagine he's talking about how do we keep people here to afford. When you look at our technology and biotech clusters, those are high paying jobs but not, but majority of people are not a part of that. Right. When we look at what makes the economy, 25% of the economy is military related. This is federal funded related activities that come from outside, money that comes from outside to soldiers, to anyone military related and then those supporting the military in that regard. So it's a big, much bigger part of the population. A lot of that is manufacturing by the way. Right. Which is interesting. Some are high paying manufacturing and some are not. Some are low paying manufacturing. So I think it's interesting we probably should do a deeper dive on what is the makeup of the talents and skills for our leading industries. I think that'd be interesting to know. Right. Because that's what's going to become under attack over time is what is where is the talent and can they afford and are they relevant to the leading industries that we are supporting here. So we're talking about. We just wanted to broach the open the bigger subject here with all of you, our listeners, the majority are tech. And look the software tech world is pretty small GDP wise compared to military. Biotech though is about what do they, they call it. So if 25%, 1 in 4 to 5 jobs is, is military related, 1 in 20 is biotech, so about 5%, it's still pretty good. You know it's a pretty big increase in those kinds of jobs and those are science right or science adjacent kind of jobs. So yeah, we'll keep unpacking that and we'll keep looking for areas that stand out here. Why don't we talk through another leading subject that came out on ucsd. Some news here that was announced that there'll be some new space science missions that'll be led by, by ucsd. You want to talk through this, Fred?

Yeah. So the headline was NASA selects UC San Diego led Satellite mission to Track Earth's Changing systems. I was pretty interested to see this. I think NASA has, has done a lot of work locally in San Diego. It's great to see them partnering up with local university UCSD to do their own missions. The article highlighted which will get a link in the show notes that these two missions can cost, you know, total capital by quarter, over a quarter million dollars. I think it's 355 million that includes development, launch and operations of that. Neil, you have a space background. Maybe you could speak to, you know, San Diego's connection to space and satellites. But there was a quote from the pretty close law saying that UCSD continues to push the frontiers of plant planetary research including, you know, delivering innovative solutions in space.

Yeah, San Diego has a history a bit, I would say smaller than la. The LA is definitely the density of the history of space engineering. You know, all the original Mercury through space shuttle were pretty much built by North American Aviation in la, which spun off a ton of other talent. But the biggest one that came to San Diego was I think during the 70s or 80s Atlas 3 rockets were, were actually produced in those giant spay war buildings right there alongside the 5 Freeway. And so from a manufacturing rocket cyberpole piece that's been a huge contributor to the talent pool locally as well as some amazing leading astronauts. So Sally Ride, the first American woman in space actually retired to San Diego and then was a leading researcher at UCSD and obviously heavily focused on two big areas, research in space and women in space. And so you can trace a lot of roots back to Sally Ride's just historic leadership in that. And so UCSD actually has been a leading research coordinator university for many years. UCSD has a number of different space science coordination centers on campus. And so what that means is that they've been pretty much like the project manager for research going on at the space station for a number of years and, and obviously that role has continued to expand and develop in that regard too. The other area that we've been really strong in is satellite communication. And so viasat has been one of the leading communications technology companies in San Diego and have their own satellites, Viasat 1, 2 and 3 and are in space, not all working, but are in space and have been, you know, kind of one of the largest satellite communication companies for the longest time. They have a direct competition to Starlink. They have totally different style of how they communicate. They've been like massive satellite. One satellite can take care of a whole continent whereas Starlink has thousands. They'll take care of continent. So I mean I think and their, their roots go all the way back to military communications and even for like Air Force One and other high level, high presence communications where failure is not an option. So yeah, we've got a lot of varying interest and expertise here. I think on the in space research is a huge area as well as our supercomputer center being able to gobble massive amounts of data. Those are all areas Where I think UCSD will continue to lead there from just its past present. So great to see and excited to see more space talented lead from locally here in San Diego. Let's go on to some biotech news. I think we've seen some, a lot of new news here. You want to take us through some of these, Fred?

Yeah, so we'll kind of do like a speed round. This is a mix of VC fundings as well as some real estate expansion and new leases that were signed. So we'll go ahead and kick off with biotech first there was some headline news or local biotech company. Biotech and AI company called Iambic Therapeutics. This company was founded in 2019 by a guy named Thomas Miller among a few other co founders. They made headlines a few days ago as they partnered a with the big pharma a 1.7 billion dollar deal. This was a licensing deal meaning that you know there's gonna be payments that are made throughout and you know, basically there's a quote from the CEO Miller saying our collaboration with Takeda is a powerful opportunity to apply AI driven discovery development platforms and we're partnering, we're excited to partner with them to hopefully advance new and deliver better drug candidates. So I think yeah there's just the theme here is AI and biotech seems to be picking up storm picking up some success in Iambic Therapeutics in San Diego is one of the companies leading the way. In a short period of time they've been able to build some pretty significant partnerships in this latest deal is one of the ways to showcase that.

Yeah, love to see that. Tom Miller, local legend and been a past member of our AI bio gathering that we do. Looks like we need to get an update from him to present how they're doing. Takeda's had a long presence in San Diego Japanese firm but San Diego office for a long time so it's cool to see that come together. Another longtime San Diego company, DermTech founder and CEO is launching a new company. Want to share some news around that?

Yeah. So Durham Tech was a local company that really was well known in the, in the eco in the ecosystem. Unfortunately that company had to shut down his operations but it was great to see John the the founder of that company go out and start his new thing. He just announced it on LinkedIn a few days ago. It was pretty interesting. It's called Click Click Bio and I was surprised, not too surprised but it's actually working in the GLP1 space which is a sector that's Been getting a lot of attention from investors. If you look at the website, they have a pretty strong leadership team. Folks from Amgen as well as Receptos, which was a really big success story here in San Diego in the biotech land as well as ECNTs and UCSD. So I'm eager to see, you know, another biotech CEO veteran hidden, hidden at it new new bat. We see this a lot in San Diego where a company succeeds or doesn't succeed and then the founders go set the next company. So this is the latest example of that.

Yeah, John Doback had him on the podcast maybe three years ago. Prolific surfer as well too. There's a whole crew of, as you can imagine of surfing CEOs in the biotech world who all surf together. So cool to see the next one here. We'll have to get them back on the podcast. You got some news of some new office space getting taken down?

Yeah, so there was a pretty large lease that was signed, 83,000 square foot lab deal. Neomorph, which is a local biotech company here, I believe it was like among the top three largest leases that were signed. This deal was announced in January but this has been working in the pipeline for a few months now. There's also been a few other, you know, lease signs in biotech, Clear note health as well as protect a biopharma and Those are around 17,000 square foot to 12,000 square foot. So we're starting to see some biotechs. While there's not a lot of them expanding, there are some silver linings of some biotech companies who are growing headcount and expanding. So we'll continue to bring those news and share that here on the podcast.

I love to see it. That's good momentum there. We got a lot of lab space that we got to fill up. So good work there. Let's go to some tech news. Some big tech fundings and news mentioned. The biggest being that we saw this week was Natilus, a aerospace hardware company that part of my portfolio have invested in two rounds. Now announced news of their series A financing led by Tim Draper's. Draper and Associates is a company that is building brand new airplanes to go first started in the cargo space and then expanded into passenger and then Bill too. I'll let you share some more, Fred.

Yeah, this was pretty headline news. About three days ago Capital Factory actually posted it on their LinkedIn and they said you know congrats. They were happy to participate through the via their Texas fund and Natalis is 28 million Series A and Natalist is working on some pretty cool technology for like aircrafts, which is. Which is awesome. Tim, Tim Draper, he's made two investments in senator companies in the last six months. The other one being Potato AI, which is ran by a local entrepreneur named Nick Edwards. So maybe we need to get Tim out here. He's spending some time doing deals in San Diego. It's great to see some aerospace and defense companies continue to raise capital in this, in this environment.

It's funny you say that. Tim is coming March 16th, 15th and 16th to San Diego to speak at a family office conference. So we'll put the link in the show notes. Might as well. We mentioned it. Family office conference. And so Tim will be in town. You're right. We should also use that time to show him some more deals. Another company that we think moved out of town, but hauler hero announced the $16 million raise. CEO Mark had moved here from LA during COVID I think, and may have moved out of town to New York. But they are doing a vertical SaaS play or not vertical SaaS. I would just say SaaS specifically for the Waste Management space. So helping manage trucks, fleets, the whole kind of whole process. What's your take on this, Fred?

Yeah, so Holler Hero. We profiled them I believe over a year ago when they had raised, I believe it was like 10 million seed rounds. So yeah, they raised a 16 million Series A. This round was led by K5 Global, Somersault Ventures and Frontier Growth. So they've raised about 27 million to date. And they're really leveraging software to automate waste management. There was a big tournament golf tournament in Phoenix called the Waste Management Open. A lot of execs fly down there to hang out and play golf. But yeah, the Waste Management industries is a multibillion dollar industry and it's great to see a local company use technology to help automate that. So they're a company that's growing. And the CEO Mark is actually a really cool guy. He formerly worked at a local company, actually a company in LA that was in the Waste Management space before starting a company of his own, which is a cool, cool to see.

Ah, interesting. Okay, I didn't know the roots there. Another company where the CEO is local, but the team is elsewhere. But longtime founder Aaron Fulkerson announced a funding for his AI company, Opaque. The company is based in the Bay. Some serial AI workers. I think there's some Roots routes out of Berkeley Research as well too. And the firm will be. They just announced.