What’s Happening in San Diego Tech in August with Ashok Kamal & Al Bsharah

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Welcome to the Tacos and Tech podcast where we discover cutting edge San Diego technologies and the builders making it happen. I'm your host Neal Bloom, San Diego's Tech Ambassador and together you're going to put a face to the name of today's tech leaders with our own blend of local lifestyle. I want to take a moment to thank our friends at Cox Business who have enabled us to tell these amazing stories of local leaders, technologists, founders and funders. Cox is actually a 121-year-old family run private company that thinks in terms of decades in building community a lot like we do in building a startup community. For years the local Cox Business team has helped us grow through partnering at San Diego Startup Week, South Dakota. Quick pitch and in celebrating our technical leaders at the Top Tech Awards. The Top Tech Awards are September 17th and you can join this unique, unique virtual networking event and awards ceremony with a very cool avatar environment built by local tech company Verbella. Buy your tickets and see who the nominees are at toptechawards.com thanks again to Cox Business for your partnership.

Welcoming Al so Al, if you don't know him, yes he does work for a big company, Seismic Today. I think you're VP of Data Science, but you also are a founder by background and I remember when you joined TCA a couple years ago you shared a quote that I think we actually ended up using in one of our press releases about the fund saying how when you were starting your own company, email copilot, you avoided TCA specifically, like, I don't know, seven years ago or something like that. And then here you are, fast forward joining TCA and being in our first fund and everything since. So Neil, of course, is a TCA portfolio founder that did raise. I think it's a million bucks or so for portfolio, which was one of the exits last year. But it's great to have both of you now. I feel like the two wings that I have left and right, we're gathering everybody into the community. So good to have you back, Al.

Well, thanks, man. You're really a huge part of the reason why I think TCA is much more attractive and why it's been interesting to me and why founders are much more interested than they were six, seven years or geez, eight years years ago whenever it was that I was raising. So yeah, well done.

Thank you. It's a team effort.

Well, it's good to have the two of you here. You guys are obviously heads on the ground in different areas of the community, which is why it's gonna be a fun episode to talk about what's happening. We're now putting out these episodes and newsletters weekly. So there's a lot happening pretty quickly still, even to put it out weekly. But this will kind of be like the month what's happened in the last few weeks kind of episode. And so I'm curious, usually TCA goes a bit dark in the summer. Ashok, what's going on with TCA right now, especially with going virtual and remote and Covid related?

Yeah. So we take, I think, like a lot of investors, we tend to take a break from our regular deal meeting cadence, which is four to six meetings every month, regularly scheduled, and then a bunch of due diligence meetings. Usually we have people traveling all over the world during July and August. So we found that for the past couple of years, it was good to give people a break to reload their energy and capital. You know, we typically this year, for example, we've invested $6 million even with COVID you know, coming into Q3. So not a lot of people are traveling right now. And we're therefore doing a lot more virtual social events or, you know, events like the Power Hour, where we bring together our members, our sponsors, other domain experts to talk about different topics every Wednesday. But we're also working on our next fund, which, you know, the fund. You and Al are both in it the past couple. Now we' working on fund three Ace 21. We're rebooting that. So behind the scenes, you know, the TCA hamster wheel that, you know, some of us are running on is doing the administration, the back end. The, the, the, the not fun part of any fund, of the fun part of the fund is of course, investing in great founders like, you know, Rosto, who we just spoke with. But we do a lot of the, the administration during the summer and we're still looking at deals. So, you know, I've noticed in this kind of COVID economy, the deal flow cadence slowed down a little bit in say, March and even through April. But now we're back to getting multiple deal referrals and introductions every day. So we're still with our SWAT teams of members every day looking at deals and getting ready to start investing through the fund again in the fall.

Do you think we'll be able to raise more again? Because obviously the first two years we amped it up. Third year coming up, do you think we'll break records again?

Yeah, it's hard to tell. All the rules are out the window right now and everything's unpredictable and probably literally. If you ask me that question when we launched the Capital Call in nine days, the answer could be different from now based on macro factors. As far as what do I think? Well, so the first fund was 2.2 million. These are annual funds. So we raised the fund, then we invested over the course of the year alongside individual investments. First fund was 2.2 million. The second one was 3.7 million. So big uptick to be determined kind of what this third one is. I think the headwinds are, of course, there's a lot of uncertainty and people don't know what's going to happen. The tailwind is valuations are going down. Data showing sometimes 20 to 30%, and that's predicted both through Q3 and Q4 and potentially into next year. Again, we don't know what will happen, but deal terms are getting, I would say, more attractive from an investor standpoint. So there is certainly a case where the fund is as big or bigger than the past because for the real startup investors, this is a time when people are being very active.

That's great. I can't wait to join and see it put to work in some of our local companies. Al, what are you seeing? You're working at an enterprise software company. That's pretty late stage, I would say, especially for San Diego standards. What are you seeing from your purview?

Yeah, so, I mean, we're a SaaS organization. We're financially, we've put ourselves in a really good position competitively. We put ourselves in a really good position. You know, I think everybody's feeling a little bit of pain, but we're doing pretty well. You know, I think our executive team did a great job of, you know, we set the yearly plan in place and like two weeks later Covid hit and pretty much they went back to the drawing board board, threw everything out the door and started over. And they've got a great plan and a great approach and you know, we've stopped our crazy hiring spree. But you know, we are still hiring and we're still doing well and we're still seeing deals come in. I think our, one of our top five biggest deals came in right in the middle of COVID So there are companies still spending money and we're still doing well. So, you know, it's remains to be seen. I think we have a long road ahead of us still. But I think the executive team is being really smart and playing it safe and we'll see how it goes.

That's great to hear. We definitely see from just a macro level of funding, it seems like just on a weekly basis, things have not slowed down at all recently. Or maybe they pick back up. They did slow down, I think first 60 days maybe of COVID where people just said I'm waiting on everything, but especially on the fundraising side and obviously just building software companies. Things are, things are clicking along and you can see that in the most recent fundings in the last week. The first two, the first two largest ones are both biotech related in San Diego. Velos Bio and Bio ATLA both oncology tech company or sorry, biotech companies. Velos bio raising 137 million just in the last week. I think this is like 200 million total of a raise for them for Oncology Therapeutics and Bio Atla raising 72 million. So really large raises, you know, sizable biotech rounds, but kind of typical for San Diego, right?

Yeah, no big surprise kind of there. I mean, oncology, biotech, that's the sweet spot. But we're starting to see other large tech financings as well, Neil. Right.

Yeah, definitely. We saw just, just in the same last week or I think two week period ClickUp, which really is kind of a newer San Diego story that's moved to San Diego over the last six months, raised a Series A of 35 million. And this is a software that is heavy in the project management space. My company entirely runs on ClickUp and One. I think it shocked people that they didn't know they were a San Diego company and two, they didn't really raise any money before this. Maybe 2,3 million I think and then blew up with a big $35 million a round. So this is a company to watch in town. They're hiring a ton and it's a great software deal.

How long have you been using the software, Neil? I've been poking around with it the past couple of months because in my role I'm always looking at software that helps manage projects and I'm curious how long you've been using it.

We've been on it for about a year. So we started in Airtable, tried Asana and this one just stuck. We couldn't figure out the right use cases for what we really wanted first. But ClickUp worked out really well for our team.

Yeah, it's super powerful. It does a lot of stuff and there's tons of competition in the space obviously but I think this money is really going to help them sort of attack the competition quite nicely. It's awesome to have them here in San Diego. It seems like they recently moved from the bay. Do we know how many folks moved in here?

So they've got a team of. Right now the office is I think over 50 people in San Diego. I don't know if that was how much moved here, but that's what's the local office I believe at least and growing.

Yeah. Hopefully they're starting to dive into the ecosystem and start a month is coming up soon which I know we'll talk about which will be a great way to get them introduced and yeah, it's great to see companies like this coming from the bay. I literally was reading something today that, that the number of homes for sale in San Francisco is like 5 or 6% away from 2008 recession levels. So there is a mass exodus happening up there. There's you know, and it makes sense, you know why, why pay ridiculous rent when you're working from home and you don't have to be near your office. So it'll be interesting to see if other companies make the jump like that.

And I think the the enterprise rent a car and budget truck rentals are also at you know, 2008 levels that that's always indicator for these tech bubbles and I've heard similar al could be.

Good for some of them, especially Hertz ones who are hurting from COVID lack of traveling speaking to interest like the diversity of San Diego's companies. Some huge biotech. We've got some pure SaaS software and then Go Secure. Some might know them as Edgewave CyberSecurity company. Raised 20 million recently. And, you know, it really kind of speaks to diversity of San Diego's industries. Cybersecurity being a big one from our huge spaywar Naval Technology center, as well as ESET and some of these other kind of densities. And cybersecurity is one of them. And it's great to see Go Secure raise a sizable round.

Yeah, it's interesting. You know, we got more people working at home. There's more points of entry for hackers. You know, remote work isn't going to change anytime soon. And I think even after the dust settles, this market's going to continue to expand. And I assume that companies like this will continue to benefit from that because, you know, the points of entry are expanding at a pretty rapid pace.

Yeah, it's like all devices, any device you can get your hands on, get on it to jump on a zoom call. Right. It's not just the desktop you had at your desk at work now. Probably hard to get it unchained and sent to your house. So. Yeah.

Or if they could figure out the zoom bombing thing. My wife literally got zoom bombed today. She was on a call and she's like, okay, that was unpleasant. So it's a thing. It's real people.

It is, yeah.

We had our first zoom bombing on a TCA meeting. It was one of our office hours with Moss Adams. But I feel like you've made it once you've gotten zoom bombed. Until then, you're not even on the radar of the Internet.

It's true. Another interesting company and an interesting founder, Koji, which is founded by Dimitri. I'm gonna Dimitri. Everyone knows Dimitri in town, and he's got a company. Really? The company is Go Meta, and they have this first product called Goji Koji, that started as a game development platform, so anyone could create a quick game. And actually, we have a taco game that you can go find on Fresh Fruit Tech, see how many tacos you can get a high score. I think it's over 300. So if you try to beat that, you can get a gift card from us. But they're a hardcore consumer tech company, which is not typical in San Diego. They are building platform for people to create these interactive tools. So Game was one, and now they've got a platform for creating memes and remixing other people's memes. And what they like to consider themselves is they're the TikTok of memes. So you can have a whole Feed where you can look at someone else's memes, remix it, put in your own thoughts, change up a picture or the text or something and put it back in the feed. And they're seeing some pretty rapid adoption in certain areas. So gaming is one area where you're getting like one gamer will mention, have a catchphrase or something and 10,000 memes will all of a sudden flood the Koji platform with people remixing and watching a gaming stream. So this is a hot company, they have some hot investors behind them. Demetri himself was early in MySpace. I think he was a CTO of MySpace and he's been early in a lot of interesting consumer platforms. He was, I think there's a story about pre YouTube. He had a competitive platform called Veyo or Veo that didn't win out but was racing to be the video platform. So really interesting founder, really interesting company and it's cool to see them have growth and raise a sizable round.

It's interesting. I mean TikTok was kind of built on the fact that you could mix and match and take other people's things and copy them and do side by sides and stuff and they're layering on that and allow people to do that again. I hate to say it but, but the company's name is Go Meta. That's actually pretty meta.

It is.

Another company that is interesting to keep our eyes on. We've seen them through TCA for a bit now. It's great to see them doing well. Sun Genomics. Sunny doing a really cool spin on getting your microbiome, kind of like a 23andMe where you can do kind of a swab, get your own genetic code. Well, you can get your microbiome downloaded to yourself through Sun Genomics. And they just raised an $8.65 million round.

Yeah, and it's a great example of a San Diego story because here we have basically life science with a software application and they're pushing a consumer facing product as well. So it's sort of that full diversity spectrum of the ecosystem exemplified by Sun Genomics. So Sunny is the CEO and the company's called Sun Genom. But I appreciate him because he handed out some swag at one of the TCA meetings which were basically microbiome stuffed plush toys. And my son, although I didn't have a child at the time, he gave me one, I've held onto it. Now my son plays with the salmonella strand all the time. I gotta thank Sunny for that one.

Those are fun. I love those. Little toys. I used to give them out as birthday presents to friends.

Goes to show some good swag can outlast sometimes even a funding round.

It's true. A TCA portfolio company recently raised some money groupsolver and so they've been through how many times have they come through.

TCA ASHOK Three rounds. So three rounds. And the interesting thing is talking to Rosto, they're actually paying back one of the notes which you don't see as an investor too often, but they raised well over a million dollars from TCA and more importantly have just grown the customer list to all kinds of brands that we interact with every day. So it's a really good story of not just fundraising successfully but more importantly selling successfully.

Were they in the ACE Fund or.

No Group Solver was pre ACE Fund. So TCA launched our ACE annual fund about 18 months ago and the main TCA round was a little bit before that. The following two have been kind of of follow on smaller rounds that were led by other investors.

Got it.

So we're going to have Ross Dan on a future episode pretty soon so stay tuned to hear kind of the backstory of Group Solver. One last company I wanted to highlight is Hygienica. This is an early stage company, just raised a million with local venture fund Impala Ventures, kind of a pre seed seed venture fund. And they're doing a disinfectant device. So obviously pretty Covid related a device to get more of your items disinfected quickly.

And we're seeing both Covid applications from companies that existed before COVID and then some new native Covid startups that are emerging more and more. Neil right?

Oh yeah, absolutely. I mean huge divergence. Either you're staying relevant to now or you're not and you're pivoting to try to stay relevant. Your product is for sure. So I'm interested to see the traction and feedback they're getting from local customers so they may be a good future. Podcast interview There's a lot else going on besides raising money, right. We know there's so much else to build in the company and some of that is just getting started. There's a really great incubator in town called Connect all, which is a Connect and City of San Diego and Jacob center collaboration to help small businesses get off the ground and specifically focus on Southeast San Diego. So they're only looking for underserved populations of entrepreneurs in a specific geography. Really cool. I hear they're going to open up other areas as well too, feature other Incubators But I was lucky enough to mentor one of the companies pre nursing smarter and really cool to see their progress over a short period of time. I think. Al, you've been a mentor to accelerators ShowQF2. It's pretty cool to spend such a good amount of time with a company and see them progress. And they just had their demo day last week and they announced the winners of that, which is great to see.

Yeah, I love to see that there's accelerators here in San Diego. I mean, you're right, I went through one and it was a life changing and a business changing experience. And the people I met through that program and have continued to build relationships with, it's hard to put a value on that. And so it's great to see these guys being successful here in San Diego.

And I see Al's wearing his techstars shirt. I think I'm wearing my Startup Week shirt, which I think we'll talk about soon. But you're also a mentor.

Neil's wearing a collar. I don't know what's going on with that.

And he's got a good haircut. I don't know why he's pulling that off but. But you're a mentor in techstars Anywhere. The accelerator that our friend Ryan Cooter and Kendra run in town, they just opened up their applications as well. So great opportunity for any startups. I know three classes ago, Trust and Will has been one of the breakout kind of COVID companies that TCA invested in and that was a techstars Anywhere company. Crafter. More recently it was another one. So it's a really great opportunity to be a part of a world class accelerator run by a world class team that's based here in San Diego. But it's open to companies all over the country.

Yeah. And Ryan is a three or fourth generation San Diegan and yeah, they've been running a virtual accelerator for four years before anybody else had to.

Right.

They were the only one in techstars until about four months ago where now where everybody is. So yeah, he's got it dialed in.

Another new group that actually get your application in.

Yeah, the applications I think are due early October, but I know they're doing a number of sessions where you can have some office hours and ask, you know, is it right for you? So we'll put a link into the techstars Anywhere application. Another local organization that spun up, which is really great to see, is the San Diego Data Science Alliance. And so this is an organization that is focused on the application of data science, which is San Diego, a huge density for. We've got significant amount of data science talent here. And so this alliance is going to help further put San Diego on the map around all of our applications there. It's kind of a spin out from UCSD's new data science school that Tenair Halisiolu with Keshe Ventures helped seed. And so now that there's an organization as well too, they're put on some great events around how to either get into a career in data science, how to use data science for your own company if you're a non tech company. So there's an event coming up on July 30th and it's about what's it like to be a data scientist in a non tech field. So it's kind of that application of where else can this be useful? And it's great to see that that organization spin up a lot of collaboration with Startup San Diego and other organizations in town too.

Yeah, I mean it's super cool to see this happening. Obviously with Telneira's Data Science Institute and the Data Science alliance here, they're really kind of doub, doubling down, trying to make San Diego an epicenter for data science and they've got the backing to be really successful. I mean there's a real five to ten year opportunity here to make San Diego that epicenter and make a name for San Diego in the data science space. So super exciting. You got Taner and Andy White and Alex Bates and a bunch of other really smart people in town focused on this. So yeah, I'm pretty excited about this.

Yeah. And lastly, something obviously big coming up this fall with COVID we're used to seeing San Diego Startup Week happen. May, June, timeframe, 3,4000 people come together to learn and celebrate entrepreneurship, but really they're celebrating tech. Tech companies big and small. People who want to start one, people who want to work at one, and everyone else who supports the whole community industry around it. And so Covid put that on ice for a little bit. But San Diego Startup Month is happening for the entire month of October. It's virtual, it's small bite sized daily bits, so it's not all day staring at Zoom. What they're doing actually is a really fully immersive experience where you can build out an avatar and interact with people like you would if you were at a conference. So there's set up tables for mentor hours to set up cocktail tables to just meet random people and you can start there and go off into the panels that are happening a few times a day. So San Diego Startup Month. You can find details@san diegostartupweek.com and the schedule should be out in the next few weeks. The site's already up. You can buy tickets. But we're really excited to see how different kind of immersive experiences happen, how we can replicate them in a virtual world. Because we know it's not just about sitting and watching a few people talk. It's really about those connections. And there's a lot of thought going into those unique experiences.

Yeah, and we're pretty excited, too. I mean, many of us on this line have participated. And when it was Startup Week, you know, now it's Startup Month. I just posted the discount code for TCA in the chat for those of you that want to get a virtual ticket, but the virtual and longer duration of the event this year, while, of course, we're going to miss, you know, those, those startup crawls and kind of nightly events where we get to see each other, we're going to miss that. But at this point, we got to work with what we've got, like entrepreneurs. So we're excited at TCA because it's creating some new opportunities. Our big annual Quick Pitch event, which usually happens after Startup Week in October, ish at Qualcomm, that's deferred for this year. So there won't be a Quick Pitch at Qualcomm. Obviously, it usually has 500 people in attendance, but instead we're going to be launching a new virtual pitch competition with some old and new partners during Startup Month. So that's happening in the background. TCA members stay tuned for more details. We'll be looking for mentors to work with us on pitch prep, but I think it's going to be really exciting because we're going to get to tap into some new entrepreneurial communities and find a way to really bring the whole community together during this difficult time to hopefully again invest in more great companies, which has always been the purpose of Quick Pitch for tca.

Yeah, and hats off to Alexa Ray and all the volunteers for Startup San Diego. Alexa. She is relatively new and dove in and right out of the gate, she's trying to figure out the normal San Diego Startup Week. And a couple of months into her tenure here as the executive director, and bam, she gets hit with COVID and everything changed. While she didn't get hit with it, we all did, and everything changes. And now she's got to figure out a virtual event and really Seems, you know, I got to chat with her a couple of weeks ago. It really seems like she's taking the bull by the horns and we're going to figure this out. You know, there'll be some bumps and bruises along the way, but it's going to be a pretty fun and engaging sort of experience, which I'm excited to see. It's great how we're just kind of embracing this.

Yeah, there's a lot of opportunities that come from it now in terms of where speakers can come from. It can be anywhere in the world now. Right. That unlocks the kinds of speakers we can get. It also unlocks like we've got a whole month of content where we could actually really do progression. Now instead of take this bite sized piece and then leave startup and go do it now, it's every week you could be learning something new and applying it to your, to your company. Coming back next week, learning kind of part two. So there's kind of this really cool experience that that's going to happen, I believe, with a month's worth of just dedicated learning and sharing. So pumped for that and looking forward to seeing all of you guys there. And with that, we're wrapping up what's going on in SD Tech. Thank you, Al Ashok for joining us and riffing on this with us.

You bet. That's fun.

Thanks for joining us on the Tacos and Tech podcast with Neil Blum. Thanks again to Cox Business for helping make this possible by expanding the reach of the San Diego tech ecosystem. Big shout out to School of Rap for our rad intro music. And thanks as well to Nest Podcast Network where we are recording live inside their studio at Nest Co working in Bankers Hill. You can find Neil Bloom on Twitter eelbloom as well as Fresh brewed Tech and Tacos and Tech Pod on Twitter too.

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