Investments in San Diego County startups decreased by 35% in the second quarter compared to a year ago, marking it the third consecutive quarterly drop.\u00a0<\/p>\n
Venture capitalists invested about $755 million in the three months ended June 30, according to a report by PitchBook, an industry research firm, and the National Venture Capital Association.\u00a0<\/p>\n
The county saw 58 venture capital deals inked, compared to 68 in the same quarter last year. The second quarter and fourth quarter last year had the same deal count \u2014 the lowest since 2018.<\/p>\n
\u201cSan Diego was not alone,\u201d said Mike Krenn, managing director for Prebys Ventures. \u201cIt was a tough quarter across the country.\u201d\u00a0<\/p>\n
The metro areas of Chicago, San Jose, New York and Boston \u2014 which are also all major tech and biotech hubs \u2014 saw funding dollars fall by one-fourth to more than one-third in the second quarter compared to a year ago, according to PitchBook.\u00a0<\/p>\n
Experts attribute the slowdown to economic uncertainty, tariffs, federal funding cuts and a more selective capital environment.<\/p>\n
\u201cCompanies are staying private longer as the VC landscape continues to navigate a fragile recovery,\u201d said Nizar Tarhuni, executive vice president of research and market intelligence at PitchBook. \u201cWhile a handful of notable exits in Q2 offered a glimpse of momentum, the broader market remains constrained by economic uncertainty.\u201d\u00a0<\/p>\n
Heather Gates, a Deloitte & Touche\u2019s national private growth leader, called tariffs the uncertainty surcharge.\u00a0<\/p>\n
\u201cMore uncertainty means fewer investments,\u201d she said. \u201cIf you\u2019ve just increased the cost of doing business, that\u2019s never a great thing for any corporation.\u201d<\/p>\n
Greg Bisconti, executive managing director for real estate firm JLL, closely tracks venture capital because it\u2019s one of the earliest and most reliable signals for real estate behavior.<\/p>\n
\u201cInvestors are being incredibly selective \u2026 the message to portfolio companies is clear: \u2018Extend the runway\u2019 or \u2018Treat this round like it\u2019s your last.\u2019\u201d\u00a0 \u00a0<\/p>\n
Krenn echoes some similar sentiments.<\/p>\n
\u201cWe\u2019re seeing VCs chasing what they believe to be the highest quality opportunities, which is creating some consolidation,\u201d Krenn said.\u00a0\u201cCapital efficiency will remain important for our regional\u00a0startups.\u00a0That is something we do very well here.\u201d<\/p>\n
Top deals<\/p>\n
Six of the top 10 local deals were in the life-science sector.\u00a0<\/p>\n
One of them was RayThera, a 2-year-old San Diego biotech company that secured the biggest local investment at $110 million. It was co-founded by Qing Dong and Gene Hung. They also created in 2021 another San Diego biotech company called XinThera, which was purchased in 2023 by Gilead Sciences.\u00a0<\/p>\n
\u201cOur ongoing collaboration with this skilled team exemplifies our commitment to back repeat entrepreneurs who have strong track records partnering with us,\u201d said Michael Rome, a RayThera board member and Foresite Capital partner.<\/p>\n
\u00a0<\/p>\n
RayThera, which focuses on discovering and developing small molecule therapies in immunology, will use the capital to advance its lead drug candidates through phase 1 clinical studies.\u00a0<\/p>\n
Less than three weeks after RayThera\u2019s announcement, Biolinq, a San Diego health care-tech company, said it received $100 million in Series C financing.<\/p>\n
\u201cThis financing will bolster Biolinq\u2019s commercial readiness efforts while we pursue regulatory approval for the first intradermal glucose sensor that incorporates activity and sleep information into a single wearable device,\u201d said CEO Rich Yang. \u201cOur team has spent the last decade developing a biosensor platform designed to inspire healthier living by providing context around a person\u2019s metabolic health.\u201d<\/p>\n
The company was co-founded by Jared Tangney, who received his doctorate in bioengineering from the University of California San Diego in 2012.<\/p>\n
AI focus<\/p>\n
Artificial-intelligence companies continue to dominate the venture capital market. So far this year, nearly two-thirds of capital dollars were poured into AI companies in North America, which include investments of $40 billion in OpenAI and $14.3 billion in Scale AI, according to PitchBook.\u00a0<\/p>\n
San Diego-based Clearspeed is a local example of an AI investment. The company, founded in 2016, secured $60 million in Series D funding. It provides voice-based risk assessment in 37 countries and supports more than 60 languages.\u00a0<\/p>\n
Clearspeed said government agencies using its technology have seen a 95% reduction in personnel vetting cycle time. In insurance, Clearspeed said it cuts claims handling time in half and increases immediate payments to customers by 40%.\u00a0<\/p>\n
Flock Freight, an Encinitas freight brokerage, uses AI-powered pooling and pricing technology. It raised $60 million in Series E funding.<\/p>\n
Flock uses technology to pinpoint less-than-full truckloads that are headed in the same direction. It then finds loads to fill these trucks based on the fastest routes and first-in, last-out loading requirements.<\/p>\n
It also has a pricing engine that allows partial truckload shippers to pay for only the amount of truck space that they use \u2014 with the price ranges based on the likelihood that other shippers will emerge to fill the rest of the truck.<\/p>\n
Dean Carlson of Susquehanna Private Equity Investments is impressed with Flock\u2019s \u201cconsistently growing double-digit gross margin profile despite the significant freight market headwinds over the last several years.\u201d\u00a0\u00a0<\/p>\n
Exit deals\u00a0<\/p>\n
No local companies went public in the second quarter. The only exit deal was an acquisition of Carlsbad-based Bolt Medical by Boston Scientific, according to PitchBook.\u00a0<\/p>\n
Boston Scientific points out that cardiovascular diseases, which are the leading cause of death globally, are commonly due to narrowing of coronary and peripheral arteries, which can restrict blood flow.\u00a0These narrowed arteries are often created by cholesterol deposits and may also have calcium buildup that can increase the complexity of potential treatments. The Bolt intravascular lithotripsy (IVL) fractures calcium by creating acoustic pressure waves inside of a balloon catheter.\u00a0<\/p>\n
Boston Scientific, which initially developed the concept for the Bolt IVL and helped establish Bolt in 2019, had an equity stake of 26%. So the purchase consisted of $443 million for the unowned portion and up to $221 million upon reaching certain regulatory milestones.<\/p>\n
In late July \u2014 after the close of the second quarter \u2014 Carlsmed, a Carlsbad medical technology company founded in 2018, went public by selling 6.7 million shares at $15 each. At the end of trading on Aug. 8, the stock closed at about $12.72 and its market cap was $322 million.<\/p>\n
The company has developed patented, machine learning technology that taps a patient\u2019s X-ray and CT scans, along with other information, to design a digital surgical plan to achieve the best spinal alignment. Carlsmed, in coordination with the surgeon, then produces personalized, 3-D printed titanium implants based on the plan.<\/p>\n
Company revenue for the first quarter ended March 31 and last year ended Dec. 31 about doubled to $10 million and $27 million, respectively.\u00a0\u00a0<\/p>\n
\u201cIt\u2019s a long-view game and San Diego continues to be well positioned,\u201d Krenn said.<\/p>\n
Hang Nguyen is a freelance writer for the U-T.<\/p>\n","protected":false},"excerpt":{"rendered":"Investments in San Diego County startups decreased by 35% in the second quarter compared to a year ago,…\n","protected":false},"author":2,"featured_media":85448,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[40],"tags":[10743,28,158,2557],"class_list":{"0":"post-85447","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-entrepreneurship","8":"tag-biotech","9":"tag-business","10":"tag-entrepreneurship","11":"tag-top-stories-sdut"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/85447","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=85447"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/85447\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/85448"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=85447"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=85447"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=85447"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}