venture capital for San Diego’s local tech startups.
And the Irvine Company, Holte says, wants “to be the landlord viewed as the most flexible to their business plans, although we’re happy to provide space to bankers and law firms too.”
The Irvine Company’s initiative comes at a time when the vacancy rate for commercial office space is estimated to be as high as 34 percent in some San Diego area markets. Even Holte estimates the vacancy rate is somewhere between 22 and 30 percent, depending on whether you include the unused and available space that remains under lease.
There also are signs that the Irvine Company is serious in its attempts to woo early stage innovators and technology startups.
IO Semiconductor, a fabless semiconductor startup that is one of the two companies planning to leave EvoNexus, was surprised by the favorable lease terms the Irvine Company offered for nearby office space in the University City area. IO Semi’s CEO, Mark Drucker, tells me it was not a location he would have had several months ago on his top 10 list of local places to move. “We would’ve expected it to be out of our price range,” Drucker says, adding that nothing has yet been decided.
IO Semi, which was among the first three startups selected for the EvoNexus incubator, is ready to move on after 14 months. The biggest reason, Drucker explains, is that the startup recently raised about $8 million in a Series A round financing that included a loan convertible to stock. The capital, which came from an unnamed “strategic investor,” was contingent on a successful technology demonstration, Drucker adds.
The other startup leaving the EvoNexus nest is EcoATM, which has been developing a business around kiosks that automate the trade-in and buy-back process for mobile phones and other used consumer electronics. The company’s “eCycling Stations” electronically and visually inspect the devices, assess the current value, and administer promotions that offer consumers real-time incentives.
The startup’s CEO, Tom Tullie, says EcoATM is moving into offices near Qualcomm’s corporate headquarters in San Diego’s Sorrento Mesa, because “We raised enough money to be out on our own.” The company announced earlier this month that it had raised an undisclosed amount of VC funding from Coinstar and other investors. I’ve been told it was about $4 million by someone familiar with the deal.
With EcoATM departing in September and IO Semi leaving a month or so later, EvoNexus expects to have space for three new startups, according to Cathy Pucher, the incubator’s executive director. In its most recent round of applications, EvoNexus received nearly 50 applications, which Pucher says are still under review. Companies selected for the incubator get free office space that is fully furnished, including utilities, Internet access, and business mentoring by local executives and other volunteers. Startups will be allowed to stay for as long as two years, and will have no obligations to EvoNexus after they depart.
