What’s Happening in SD Tech in January 2020

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 tech you know we got tacos and tech is on smash border green guacamole keeper captains 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 crappy 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 cost 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, the Tijuana esti be full of hustlers from couch surfing to penthouses right on the beach Tech leaders believe stars are within reach we interview and founders who be shooting for the Moon SD TechOS with your host, Neil Bloom. Startups get the party Startups get the.

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.

Startups get the party. Startups get the party started.

Thanks to our friends at Cox Business for being an instrumental resource to our startup and tech community here in San Diego. As a partner in San Diego Startup Week, quick pitch and top tech awards, Cox Business has helped our ecosystem grow into the community it is today. And welcome back to the Talkers and Tech Podcast. I'm your host, Neil Bloom. In the studio we have Ashok Kamal Again, two weeks in a row. Welcome back.

We're making it a habit.

Yes.

I'm enjoying it.

This is great.

There's always so much to talk about.

I know. There really is. And you live nearby, so just come on over.

Perfect mix. Just like the Tacos in Tech SD TechOS theme song we collaborated with.

God, I just love that you guys made a banger. It's so great.

We dropped the bomb. The big guacamole dollop.

Yes.

And you were a big part of it too. A lot of people don't know fun fact about Neil. You play how many instruments?

A bunch of.

You're very musically inclined. So you were a collaborator on the tacos and text song with School of Rap, making it happen.

I actually thought about recording a whole new theme song myself with some other musicians and that was just going to take a lot of time and energy. So.

Yeah. You outsourced it.

Yeah, outsourced it. Beatstars. You know, if Beatstars can find the number one hit Old Town Road of 2019, well then the tacos and tech podcast Cast Anthem can be the hit of 2020.

The number one tech hop hit.

Exactly. So thank you and I hope all of you are listening on repeat like I am all the time.

They can find it on your SoundCloud.

You can so soundcloud.com tacosandtech and also everywhere you find your favorite streaming music. It'll be there shortly. Or if not already, Spotify, Amazon Music, Apple, Google Play. But this week we're going to try something a little different. We're going to talk about what's going on in San Diego. Startup land. A little news riff for a few minutes. I think we closed out the year pretty strong as we like to do something that is coming out. I'm going to put out some numbers and you'll see a bunch of numbers on venture funding in 2019 in general. It actually was down in 2019 overall in San Diego compared to 2018. My numbers show a little over 2 billion in funding to San Diego, whereas the year before was over 3 billion. And I think that was much more on the biotech side bringing us down. We had some pretty mega 300, 400 million dollar rounds on the biotech side in 2018. That didn't happen in 2019. But on the tech side, early stage there was some good last minute deals that came and closed in, especially in Techcoast Angels. You want to talk through a few of those?

Yeah. On the Tech Coast Angels side it wasn't not only not down, it was up by 2x.

So.

So TechCoast Angels San Diego invested about $6 million in 2018. Just closing out 2019, we invested more than $12 million. And again I'm talking just Tech Coast Angels San Diego chapter into primarily San Diego companies. A couple of the most recent deals were both San Diego companies and both financings were over a million dollars. Each one is a company called Mercado, also based here in Little Italy.

Downtown Works.

Shout Out Bobby is the CEO. Awesome company. They do e commerce fulfillment and marketing for independent grocery stores. So when you order your groceries from a mom and pop artisanal grocery store like Mona Lisa for example in Little Italy, that's an example of a Mercado partner. Mercado does all of the fulfillment and online, basically products to get those artisanal bagels to your house.

Cool. And that was both local angels through Techos Angels and the fund, right, 2020 fund.

Right. So TCA's fund ACE20 invested, then a number of individual TCA investors, myself included, invested. And we were part of a larger syndicate led by a VC called Greycroft in New York, which is one of the major VCs that Shipt Venmo. They're, you know, a tier one player. So it's great to see that, you know, again coast to coast connection and syndication among, you know, great investors. And there were other San Diego, so Blackbird, Neil Centuria's firm is Investor Correlation Ventures, which is one of the best algorithmic VCs and based here in San Diego. They were an investor in this round. So a great group of investors came together to to fund. This is a $4 million round for Mercado.

Oh, that's great.

And I'm really excited about that company. I mean, it's a space that's just blowing up. Incredible management team. Really excited about what's happening with Mercado.

Awesome. We'll get Bobby CEO on the podcast coming up soon. So Bobby, if you're listening, come on down.

He's a formidable founder, as you'll see, and a great guy. Another company which was a third bite at the apple for TCA that we closed in Q4 was Echo Labs. So Echo Labs is a sort of iconic TCA portfolio company. They make a next gen mark microscope. They won our Quick Pitch Competition four years ago. So they won the Quick Pitch Competition, which is the annual pitch competition that TCA organizes now along with Connect and Cox business at Qualcomm. This was before when it was just TCA doing the competition. They won. Then they quickly raised a $2 million seed round from TCA right after winning Quick Pitch. And then they went on to raise a Series A led by TCA a few months after that. So those were the first two rounds of financing. Now fast forward a few years later and they are in the growth stage and we participated in another million dollar plus ecolabs round. So TCA was a million out of another 3,4 million dollars that was invested in the company as it's on kind of escape velocity growth. And we're really excited about the prospects for Echo Labs becoming really one of the next great technology companies. And it's that mix of biotech and software that, you know, we know is a big part of what San Diego does best.

Some Other tech companies trust and will raised a series A just, just before the holidays. $6 million round that I participated in, participated in every round so far. Been awesome to be a part of to watch them grow. That team is pretty great. To see them come together, grow. And they're over here in Little Italy, which is cool.

And another example of a San Diego company that started here. Native son Cody, they were in quick pitch. Cody's started multiple companies in San Diego. He's a great, you know, SDSU evangelist. They raised their major rounds from big VCs, national VCs, so initially rise of the rest, Steve Case's VC and then more recently, Link Capital in Boston.

Yeah, pretty cool to see.

And that's what we want to see. You know, we want to see companies continue to grow within and, you know, beyond San Diego. The company is still based here, but capital comes from all over the place. And they've mixed capital from local and national sources in all of these rounds.

Yep, totally. And they had techstars involved too. They got techstars participated in their this latest round as well too, which is really cool to see. Obviously the last one that I know of coming in, surge logs. Peter been over building this company software to help surgical centers kind of manage everything that's going on there. They were over in Coronado and they finally moved over to downtown. Cool to see them growing over here. And they, they raised with 8 VC up in the Bay Area. Kind of a medical, digital health focus to them. And they raised 5 million, which is great.

Another win. So two things there. One, we talk a lot about San Diego's true identity and what we're becoming. I think if you speak to our friends like Daniel Hayters over at NextCube, he'll say that we're in a position to become one of, if not the premier digital health hub in the world. And clearly digital health is a space that we want to be a part of. Yeah. Surgelogs is another example of a local digital health company that is now growing and has raised professional venture capital. So it's great to see. The other question I have for you, Neil, is, is downtown tech having a resurgence?

Yeah, I think it is.

What's going on?

People are staying. I think that's the big deal. So I think something that's interesting to have tracked is, you know, people maybe start but then move out. I think we are at this point because of just age of where companies are. Younger founders are choosing to stay because they can and not because they have families and need to move to somewhere else to bring out their family. Like Cody, just about to start that family together.

Cody from Trust and Will.

Sorry. Cody Barbo from Trust and Will. Yeah. Has dedicated that he wants to be in and close to an urban hub. And that's very much what the data says around millennials that don't want to have a car. They want to stay within a small geo footprint. And so I think downtown is having that resurgence to a certain regard where the millennials companies that we have started are maturing and can stay in downtown.

Instead of going to Encinitas. And I have a lot of love for Encinitas and Cardiff, but recently moved to downtown myself and I've been able to see this kind of up close. Yeah. What's happening here in the tech community? It's exciting. There's exciting stuff obviously going on throughout north county and UTC as well. I think the important thing is there are clearly robust clusters in San Diego that are all thriving independently. Downtown tj, north county utc. We want to do as much as we can to connect the sort of social fabric of our, you know, of our hubs. But it's great to see that each are standing on their own as well.

Definitely. Yeah. I think speaking of the things that are exciting that are coming up, there's a few events that, that are exciting for people who are looking for things to do in terms of connecting to your local tech community. TechCon Southern California, first time it's coming to San Diego from a fellow TechCoast Angels member who's putting it on.

Yep. Faisal Mujtak. He's a Bay Area tech guy now for quite a while living in San Diego, and launched the first of this series. I think what's cool about techcon is it's different from the other major events that we do. So whether it's Quick Pitch or the Connect San Diego Venture Group events or the Angel Conference or Startup Week, TechCon is more focused on large tech companies. If you look at the speaker lineup, it's people from some of the biggest tech companies in the world. There's major VCs. It's a great opportunity for startups and entrepreneurs to network. But the focus, the audience is different from the typical startup event that already exists. So I think they're adding something new to the field.

Definitely I'll be there. I'll be speaking or at least moderating a panel. Are you gonna be there too?

Oh, yeah.

Awesome. Looking forward. Come find us January 25th at Look Up TechCon Southern California to find out more info or look up the recent Fresh Brew tech newsletter, you'll find it in there as well. There's a few applications due for some good resources coming up. San Diego International Airport Innovation Lab, they've got, they put three or four classes out already. Cohorts, which is super cool. Applications are due January 30th as well as Launch Factory. So they've only put through one company yet, but they're actually going through company two and three. Through this recent venture studio, Brad Chisholm sold his company to Google and now is building companies.

Yeah, I had a chance to go actually visit them at their facility over in Sorrento Valley. And so Brad by way of background, as you mentioned, he's an entrepreneur, sold a company to Google, he built the office for that company in San Diego. That was one of his criteria by the way, in the sale. If you talk to him about it. That was like a non negotiable aspect of the sale was he wanted to keep his team here in San Diego. He did. And now he's working on this venture studio with a really interesting model where you know, they kind of put out requests for startups so we call it an rfs. They have ideas, meaning Brad and his management team and they post to the community to get the best responses and teams that they help organize to solve these problems. In the case of the new class, I believe it's diy, you know, kind of tools and then senior care, you know, tech. Those are the two areas that they're cool, they're targeting. So I really like that venture builder sort of startup studio model. And of course when it's led by a great entrepreneur, a proven entrepreneur like Brad, you know, I think it's another really cool institution and totally.

And what's really cool is the model of using the network to find those best operators. Right. So I'm incentivized to refer the best people there. I'm really excited to put some names in the hat to say, hey, I think you'd be great at running this company. And so if you, even if you're not ready to run a company, you know good people that could be great operators. Definitely throw some names in for Launch Factory for that one other application that's due to World Trade center by the EDC. MetroConnect applications are due January 24th. So this is if you, anyone who's building a company that has an interest in going abroad, they have grants in a sense that will help you go abroad. And that application is due January 24, just two events more to just give A quick little shout out to Startup San Diego's doing a third Mondays this month that's a little different than usual, usually as a speaker series. This time it's going to be a career incubator. So if you have an interesting in joining a tech company, especially a startup, there is going to be a panel of hiring managers and then you can sit down and do some 20 or 30 minute career sessions around how to get ready to work for an early stage startup. So check that out on January 20th third Mondays and women of AI have come to San Diego and are doing an event on January 22nd at UCSD's the Basement. Cool to see that group come to come to town. And so for all other news and fundings acquisitions check out freshbroodtech.com follow us on social media pretty active on LinkedIn and Twitter we get our newsletter that goes out every other week with this kind of content and you can stay in the loop. Doesn't have to be stuck in Ashokani in our brain we want to put it out so that anyone can know what's going on. And so with that I say have a good week, have a good January and all the best in 2020.

Cheers.

Cheers. 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 studio at Ness coworking 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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