By Neal Bloom
Happy New Year! Can we still say that? It feels like we are already deep into 2020, but I want to also share last year’s hard-crunched numbers for San Diego’s tech ecosystem, which may give us some insights on what’s to come this year. From what I can tell, investments in private companies for San Diego in 2019 were down compared to 2018. I believe this is because in 2018, we had some $300 million and $400 million biotech rounds that didn’t happen in 2019. Similarly, acquisitions and IPOs were down in 2019 compared to 2018. See my article from one year ago, and the data behind the scenes for 2019 on my public chart here. I know my data isn’t 100% complete and comprehensive, but I’m happy to chat specifics with anyone who wants to in the comments.
Now, let’s get down to the nitty gritty.
A trend – some companies are becoming hard to classify as biotech or tech because they are both. I’d like to say we should stop labeling; certain kinds of biotech skew data by raising so much money, especially in the pharma/drug discovery, but it is exciting to see companies that are using AI for cancer detection, for example. These blurring of the lines between tech and life science is what San Diego is all about. I expect to see more of that in 2020 and beyond.
San Diego tech ecosystem 2018 funding: $3.4B
2019 funding: $2.1B
Sample of deals in tech and biotech in 2019:
Tech Late Stage: SmartDrive ($90M), Tealium ($55M), KaiOS ($50M)
Tech Early Stage: Lennd, Trials.ai, Trust & Will, Blo.om, GoMeta
Biotech Late Stage: Poeisda ($142M), Acutus Medical ($100M), Avidity ($100M)
Biotech Early Stage: Concert Health, Lynx Biosciences, Cardea Bio, Biolinq
While there weren’t as many of the big multi-hundred-million-dollar tech and biotech blockbuster acquisitions like we had in 2018, there were still notables, including biotech Synthorx getting acquired for $2.5 billion, Tesla acquiring a local company and a few in the apparel/lifestyle/food and agency businesses. Here’s a sample of some below and more data in my public chart.
Tech: Psyonix, Maxwell Technologies ($235M), Kyriba ($160M), Certona, Portfolium ($43M), Zingle ($42M), Ad-Juster, HireAHelper
Biotech: Synthorx ($2.5B), Qualcomm Life, Calporta ($576M), Vertiflex ($465M)
Apparel/Lifestyle: Blenders ($90m), Pura Vida($75m), Jenny Craig
Food: Perfect Bar, Cutwater Spirits, Ballast Point
Agency: CanaleComm ($31M), MJD Interactive, Internet Marketing Inc
What are some things to watch for in the San Diego ecosystem in 2020? More exits, either through IPO or acquisition. And then what do the founders/execs do after? They stay engaged in the ecosystem and become angel investors with me!
New local funds
Tech Coast Angels San Diego deployed the first ACE19 fund and promptly raised ACE20. Launch Factory venture studio backed its first company, and Greatscale Ventures started and backed its first local company. San Diego Angel Conference invested its first capital, and trained dozens of new angels, and is investing again this year. Founders First Capital also raised $100M to invest and loan early stage under represented companies; congrats to Kim Folsom and team! It’s nice to see new local, early stage capital and we need a lot more. Section 32 also raised a $200M second fund and invested in local companies XOKind, Aspen Neuroscience, Medcrypt, and Cradle Genomics. Qualcomm Ventures committed $200M towards 5G investing. Who’s raising a fund next? Expect to see a few new ones in 2020!
With so much office space coming online – think millions of square feet – big tech companies are coming; it’s just who (or who isn’t?). Shall we place bets? Leave your thoughts in the comments below.
Merging of ecosystem supporters
Connect and SDVG joined forces, Evonexus opened a Silicon Valley incubator, the first SD Angel Investor Conference started and trained dozens of new angels, and Startup SD hired a new executive director and convened the SD Started Council to create a comprehensive Startup Resources Guide. Expect more partnerships in 2020 as we build more bridges together.
In the meantime, let’s keep the momentum going!