Software is making a comeback in San Diego.
It’s not exactly a sea change. But there are more companies now, more investments—and investors—and more startup activity than there was even a few years ago, when a lack of direction in the tech sector here led to unflattering comparisons to the horse latitudes.
Some of San Diego’s stronger Web companies have raised substantial venture rounds. Tealium has taken in nearly $78 million in equity and debt to manage website metadata tags, and TakeLessons has garnered $20 million to operate an online marketplace for lifelong learning. Both were founded in 2008.
Since then, a whole new generation of software startups has taken root in San Diego. Many companies are already turning heads with impressive startup teams, significant early stage funding rounds, rapidly growing revenues or users—or a combination of those factors and more.
So the timing felt right for Xconomy to highlight a dozen or so of the most-promising tech startups to watch in San Diego.
We made our selection from companies that were screened by the San Diego Venture Group for its annual venture summit, which begins Thursday (tomorrow!) at the Manchester Grand Hyatt in downtown San Diego.
Over 160 startups from the San Diego area applied to participate in the annual venture summit, according to Mike Krenn, the venture group’s president. (Krenn and other members of the venture group selected 32 local companies from this pool to make presentations to 100+ venture investors in a private, invitation-only demo day.)
From the same pool of applicants, the venture group also named 40 startups as “cool companies,” and invited them to exhibit their technology Friday at the Manchester Grand Hyatt as more than 700 people gather for the venture summit’s main event, which is open to the public. The agenda includes presentations on Qualcomm’s robotics initiative, doing business in China, the business of cannabis and 2016 elections, and the convergence of chip design and genomics.
This year’s keynote speaker is Fred Wang of Trinity Ventures, which led venture rounds in two San Diego startups earlier this year—Cybersecurity startup Harvest.ai, which raised $2.3 million in March, and fintech startup Dealstruck, which took in $8.3 million in April.
“I’d like to think that’s a foreshadowing of greater things to come,” said Krenn. Getting an “A list” venture firm like Trinity from Silicon Valley’s fabled Sandhill Road to invest in two San Diego startups is “something I haven’t seen in a long time,” he added.
Other prominent venture investors with multiple deals in San Diego include DFJ, Avalon Ventures, Jackson Square Ventures (previously known as Sigma West), and Qualcomm Ventures. Some new angel investors also have been making multiple investments in recent years in San Diego, most notably Taner Halicioglu, a UC San Diego computer science grad who was one the first software developers hired at Facebook; Craig Lauer, a former Qualcomm engineering VP, and Allison Long Pettine, who invests in both technology and life sciences startups.
To add some mystery to our list, I’ve added a San Diego startup that is still in stealth mode to create a “baker’s dozen” of San Diego tech startups to watch. Omniome is an intriguing biomedical diagnostics company whose founder and CTO, Kandaswamy “Swamy” Vijayan, previously worked at Illumina (NASDAQ: [[ticker:ILMN]]), the San Diego-based leader in genome sequencing technology. Vijayan declined to comment for this article, saying the company is intent on remaining below the radar until it makes its debut in the first half of next year.
Omniome represents one of the hottest and most-compelling areas of innovation in San Diego, as the revolution in genome sequencing looks to the IT industry for solutions to the kind of problems that require sophisticated applications of Big Data and analytics. Cypher Genomics, which is also on our Xconomy list of tech startups to watch, has developed software-as-a-service analytics that accurately interpret genomic data. Another San Diego early stage company, Edico Genome, is integrating software and hardware processing technologies to ease a data processing bottleneck in genome sequencing.
Omiome, from what we can tell, is part of this vanguard of San Diego startups at the convergence of Big Data and “Big Biology.” Omniome was admitted last June into San Diego’s EvoNexus incubator (which has hosted several companies on our list). In one of its few public disclosures, Omniome says it is developing low-cost biosensors that can be adopted for mobile diagnostics and health monitoring.
Yet it is worth noting that to genomic researchers, the “omniome” refers to a comprehensive database for storing information about the genomic sequences of bacteria. (Such a database might be useful, for example, in identifying bacterial DNA from a blood sample or biosensor data.) It’s also worth noting that Data Collective (DCVC), the Bay Area venture firm that specializes in big data startups, has made an undisclosed investment in Omniome (according to PitchBook data used by Entrepreneur magazine to identify the top early stage VC firms), and DCVC lists Omniome as a portfolio company on its website.
