Daily Business Report-Feb. 1, 2018
Sergio Sandoval at his desk at NASA.
City College Alumnus Headed
for the Stars with NASA Job
SDCCD NewsCenter
Born in San Diego and raised in Tijuana, Sergio Sandoval barely spoke English and knew nothing about the American education system when he enrolled at San Diego City College in the fall of 2011. No matter. Thanks to the overwhelming support he was showered with at the downtown San Diego campus, Sandoval was able to transfer to and graduate from the Georgia Institute of Technology. Now he’s working at NASA’s Johnson Space Center in Houston while going to graduate school.
“San Diego City College changed my life,” Sandoval said. “It showed me that anything was possible, that I was capable of doing great things.”
City College has been helping thousands of students go on to do great things since its founding more than a century ago, sending graduates to some of the top universities in the country and housing a number of innovative career education programs ranging from cosmetology and special effects makeup to photography and graphic design that are second to none.
“Sergio embodies what City College offers,” said Rafael Alvarez, a City College professor who heads the Math, Engineering, Mathematics Excellence (MESA) program at the Downtown campus and who served as a mentor to Sandoval.
Sandoval never planned on a career in the sciences. His father owned a small printing shop in Tijuana, and Sandoval figured he’d go into the family business. On graduating from high school, Sandoval set his sights on City College.
His friends thought otherwise.
“They said I should do something I loved. They kept telling me I was really good in math and science, so I should try engineering. I didn’t know anything about the subject, but I looked into it and it looked interesting. I loved the complexity it involves. I was convinced to find something I was passionate about, and engineering was it.”
Upon graduating from high school, Sandoval quickly set his sights on City College across the border. “I didn’t know what a community college was. A cousin told me about City College, so I went there to check it out. The location, the campus itself, it was just so beautiful. And the access from the trolley, the fact it was Downtown, it was perfect.”
He faced more than his share of challenges along the way. Still living in Tijuana, Sandoval’s daily commute meant passing through Customs at the San Ysidro pedestrian border crossing, walking to a transit center and boarding a trolley for a 45-minute ride to City College. The trek took up to three hours or more each day.
“Every single day you ask yourself the same question: ‘Why am I doing this?’ It’s 4 in the morning and all you want to do is sleep, but instead you’re walking across the border and getting on a trolley, and there are no guarantees anything would ever come from this. But you have to keep telling yourself that it’s worth it and keep reminding yourself that in the end it’s going to be OK.”
It was worth it. Especially when he joined the college’s MESA program, an acronym for Math, Engineering, Science Achievement.
“It’s a family where success and meeting your goals is the most important thing,” Sandoval said. Everybody is so focused. Nobody is afraid to work.”
He also earned a Price scholarship, a competitive grant program that offers cash awards of up to $10,000 in return for up to 300 hours of volunteer work in the community each year. Sandoval served as a volunteer tutor and mentor with the Barrio Logan College Institute, whose mission is to break the cycle of poverty by preparing underserved students to be the first in their families to go college with the help of after school programs that begin in the third grade.
“The Price Scholarship Program really underscores how big of an impact San Diego City College has on the community.”
Sandoval transferred to Georgia Tech in 2013 as a recipient of the university’s Provost Scholarship program, which awards an out-of-state tuition waiver for eight semesters. He also found a job on campus. Gone were the early morning, three-hour commutes. At Georgia Tech, one of the nation’s leading research universities, Sandoval joined the school’s aerospace engineering honor society. His academic achievements were recognized with a collection of annual awards.
In the fall, he begins his master’s program at San Diego State University. But not before he lands at NASA’s Johnson Space Center in Houston this spring and summer working on algorithms involved with the guidance controls and landing mechanisms of the Orion spacecraft.
“I never imagined I could ever work with NASA. I never thought I could be part of this family.”
It won’t be his first time working with NASA. He was an intern assigned to the Jet Propulsion Laboratory in Pasadena and has worked at the Johnson Space Center in 2016 and 2017 through the NASA Cooperative Education Program – in which students alternate semesters at school with semesters at NASA centers – while attending Georgia Tech.
His ultimate goal? “I would love to become president of San Diego City College,” Sandoval said. “That would be a dream. It would allow me to pay back the school for all it’s done for me.”
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Venture Capital Investment in San Diego
Reaches Record $1.6 Billion During 2017
Venture capital activity in San Diego bounced back in 2017 after a slower 2016, thanks to strong back-to-back quarters
in investment. The 2017 total was over $1.6 billion, which is the highest deal volume on record for San Diego, according to data from CBRE Research, PwC/CB Insights MoneyTree Report, Pitchbook and Mattermark.
M&A activity was also very high in 2017, including 23 M&A deals in the fourth quarter alone. This figure includes announced or completed deals involving San Diego companies either as the acquirer or the acquired. Additionally, two companies made major stock offerings or IPOs.
In the fourth quarter, San Diego firms received $452 million of VC investment, down 4.3 percent from quarter 3, but up 161.3 percent year-over-year. There were 28 deals executed this quarter, on par with the three-year average.
Industry Highlights
The largest life science VC deal this quarter went to Progenity, a biotech company focused on molecular testing and therapeutic applications for women. The company raised a $125 million Series B round. 12 Sigma Technologies, a developer of a medical image and data analysis platform, raised $30 million this quarter in a Series B round. Impact Biomedicines, a developer of cancer treatments, received $22.5 million of venture funding in addition to the $90 million of structured financing they received at the beginning of the fourth quarter. Celgene Corp. is expected to acquire Impact Biomedicines for as much as $7 billion in 2018.
Life science companies in total received $271 million in investments from 11 deals in the fourth quarter and closed a record year at just over $1 billion in 2017. Medical device / diagnostic companies received $194 million in the fourth quarter and also set an annual record in 2017 with $459 million total. Biotech / pharmaceutical received $77 million in the fourth quarter and $563 million overall in 2017, which was up a modest $7 million from 2016.
Tech companies in San Diego scored 7 deals totaling $178 million in the fourthquarter for a total of $554 million in 2017, the highest annual volume on record. Software / web companies received the bulk of the investment at $119 million. TuSimple, a manufacturer of autonomous semi-trucks, raised $55 million in a Series C round. SmartDrive, a developer of driver safety and risk management software, raised $40 million in a Series C round. Hardware / IT services companies raised $59 million across three deals. Achates Power, a developer of internal combustion engines that aim to increase fuel efficiency and reduce GHG emissions, raised $29.8 million in a Series D round.
M&A Activity/IPOs
San Diego-based Ignyta was acquired by Roche for $1.7 billion (source: Xconomy). The acquisition will give Roche the rights to a drug, entrectinib, currently in pivotal testing for cancers that contain specific types of genetic mutations.
Jack in the Box, Inc. has agreed to sell its Qdoba fast-casual Mexican food chain to New York-based Apollo Global Management LLC for $305 million (source: Reuters). Qdoba is the second largest fast-casual Mexican food brand in the United States, operating over 700 restaurants nationwide. The deal is expected to close by April 2018.
San Diego-based pharmaceutical company Odonate Therapeutics is looking to raise $150 million through an IPO (source: Business Wire). If successful, Odonate would far exceed Tocagen’s $97.9 million IPO in April and Otonomy’s $100 million in 2014. IPO activity slowed down in 2017; however, companies such as One Stop Systems, who filed for a $23 million IPO in December, are looking to change the downward trend.
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Fast-Growing Smashtech Leases
Penthouse Suite in Symphony Towers
Smashtech, one of the San Diego region’s fastest growing companies with more than 60 employees, has leased the penthouse suite on the 33rd floor of Symphony Towers in Downtown San Diego.
The 22,000-square-foot lease more than quadruples Smashtech’s footprint, and offers employees of the three-year-old tech panoramic views of Downtown San Diego, according to Irvine Company Office Properties. The marketing company, owned by Omar Imani and Anwar Husain, creates health and wellness brands.
“Smashtech is already considered one of San Diego’s best companies to work for. Their new headquarters will cement their growing reputation as one of the region’s brightest and biggest new business stars,” said John Turner, regional vice president, Irvine Company Office Properties. “In just a few short years, they’ve grown from two owners to occupying some of San Diego’s most prestigious space.”
The company is scheduled to move in June 2018 from the Union Bank Building, also Downtown.
“We’re beyond excited for our new home. We’re committed to growing even more in the coming year and providing our team with the best working environment,” said Husain, co-founder of Smashtech.
“This is going to be, hands down, one of the best offices in San Diego,” said co-founder Imani, at the company’s “SmashGiving” party.
The announcement drew wild applause from employees, who watched the company’s founders sign the lease with their fingers, on their iPhones.
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Poway Manufacturer Vitrek Corp.
Acquired by N.Y. Private Equity Firm
Vitrek, a Poway company that manufactures electrical safety test and measurement equipment, has been acquired by a New York-based private equity firm. Neither the terms of the transaction nor the identity of the buyer was disclosed.
Founded by Kevin and Cindy Clark in 1990, Vitrek serves a diverse group of domestic and international customers from its headquarters in Poway, including many Fortune 1000 companies and premier brands in the electrical, electronic, medical, cable, power, lighting, appliance and industrial sectors.
PierCap Partners announced the acquisition.
The New York private equity firm focuses on partnering with already strong companies with less than $100 million in sales, working with them to strengthen operations and facilitate growth to maximize their potential. The firm’s purchase of Vitrek will allow the manufacturer to expand its research and development capabilities, invest in new product innovation, increase its sales and marketing capacity, expand production and add personnel, according to the announcement.
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City of San Diego to Relocate Employees
from Executive Complex Due to Asbestos
The city of San Diego announced Wednesday that it is moving all of its employees from the Executive Complex, a building it leases from a private property owner due to concerns about the presence of asbestos-containing construction debris. Following a positive test for asbestos that led to the immediate removal of city employees last Friday, remedial actions have been taken by the landlord. However, due to these ongoing construction-related concerns, the city has decided to relocate its affected employees. City operations are not anticipated to be impacted.
About 550 city employees occupied leased space in the Executive Complex building at 1010 Second Ave., which is privately owned by Tower 180 Owner LLC. While the city arranges for alternate work sites, some employees will work from the adjacent City Administration Building at 202 C St. and some are telecommuting.
Because construction is anticipated to continue for several more months, the city chose to move out all employees in an abundance of caution. The City is pursuing options to safely remove documents and other necessary materials from Executive Complex. A call-in number has been established for employees to ask any questions regarding this event.
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InTents Conference Returns to San Diego
to Benefit Farmers Market Purveyors
The second annual inTents Conference is returning to San Diego on Monday, February 26 and Tuesday, February 27, with bonus sessions for vendor and market start-ups on Sunday, February 25. It will be held at the Marina Village Conference Center in Mission Bay.
The conference brings together small farmers, artisan food makers, farmer’s market managers and more for two days of educational panels, speakers, roundtables and networking opportunities that teaches skills and provides resources to small businesses on achieving financial sustainability. InTents Conference focuses on helping small business owners grow their company to be stronger and more profitable and help prospective entrepreneurs get their ideas off the ground.
“InTents Conference educates farmers, small food makers and farmers’ market managers on how to maximize their profit, all while navigating the rules and regulations of the markets,” said Fields White, founder and director. “InTents Conference brings all of these groups together to spark conversation, network and compare notes on ways for micro-entrepreneurs and small businesses to launch a project at a market, maintain a profit and grow in an encouraging space.”
The conference will include featured guests Forrest Pritchard, owner of Smith Meadows Farm, market farmer, and best-selling author of “Gaining Ground and Growing Tomorrow,” and Neal Gottlieb, founder of farmers’ market business and now multinational brand Three Twins Ice Cream.
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Leading Economic Indicators Up
in November and Up Sharply in December
The USD Burnham-Moores Center for Real Estate’s Index of Leading Economic Indicators for San Diego County rose 0.6 percent in November and another 1.4 percent in December. December’s sharp rise was fueled by a huge gain in building permits, along with strong gains for initial claims for unemployment insurance, online help wanted advertising, and the outlook for the national economy. Local stock prices and consumer confidence were both up slightly as all six components were positive for the month.
December’s gain was the largest since March 2015 and pushed the USD Index close to an all-time high (the Index topped the 150 level for a few months back in 2000). It also marked the 14th straight month in which the Index was either positive or unchanged. So the outlook for the local economy remains positive through the end of 2018. Wage and salary employment growth of about 25,000 is expected for next year.
The tentative release date for the report for January is Feb. 27.
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UC San Diego Opens Outdoor Drone Test Facility
UC San Diego has opened a new aerodrome for research into unmanned aerial vehicles. The outdoor facility is designed “to create a living laboratory for unmanned aerial vehicles by bringing together researchers from across campus, including computer scientists, structural, mechanical, aerospace, electrical and computer engineers and scientists at the Scripps Institution of Oceanography,” according to a UC San Diego news release.
Managed by the university’s Contextual Robotics Institute, the aerodrome covers 2,500 square feet studded with motion capture devices and enclosed by a 30-foot-tall mesh cage, and will be used to further research on technologies as varied as drone swarms to hurricane-monitoring balloons. The university also plans to expand the facility next year, adding a 100-foot-tall indoor area connected to the current outdoor arena.
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Grossmont College Hosting Black History Month Events
Black History Month will be marked at Grossmont College with many events, including a presentation that links educating African-American boys and men to the Black Lives Matter movement. The presentation by San Diego State University Professor J. Luke Wood on his course, “Black Minds Matter,” is set for 2-3:45 p.m. Feb. 7 at Griffin Gate, Bldg. 60. He will be joined by SDSU graduate students who took the course last fall.
All events are free and open to the public. Many others are planned for the month of February. A complete list of events is posted online. Click here.
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Personnel Announcements
Bill Rose Named a Senior Managing Director with IPA
Bill Rose has assumed an adviser role with Institutional Property Advisors (IPA) in San Diego as a senior managing director. IPA is a division of Marcus & Millichap.
Rose will focus on the sale, financing, and joint venture structure of institutional-quality West Coast shopping centers. Most recently, he served as national director of retail for Marcus & Millichap and IPA.
Rose joined Marcus & Millichap in 2003. Previously, he was a managing director at HFF where he was active in debt origination, structured finance and investment sales. Prior to that, he spent 13 years at TrizecHahn as director of development leasing and management. During his career, Rose closed more than $3 billion in real estate transactions.
Rose holds a Bachelor of Science degree in real estate and finance from the University of Colorado, Boulder and Certified Retail Property Executive (CRX) and Certified Shopping Center Manager (CSM) designations. He is a member of the International Council of Shopping Centers, the Urban Land Institute and the University of Colorado Real Estate Advisory Board.
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Ian Gordon Joins United Way of San Diego County
United Way of San Diego County has hired Ian Gordon as the new vice president, community impact. In collaboration with United Way’s leadership team and board, Gordon will lead the organization’s education and family self-sufficiency initiatives, disrupting cycles of poverty to change the odds for children and families throughout the region.
Gordon is responsible for community engagement, scaling up existing collective impact initiatives and developing new opportunities to deepen United Way’s cradle to college and career work. While working with multi-ethnic, multi-cultural community members, he will leverage local resources to achieve measurable results.
Gordon is an executive leader with 22 years of experience in organizational and nonprofit management, community and workforce development, social science research, federal contracting and business. As the director of the San Diego Youth Development Office, Gordon leveraged more than $1.7 million in K-12 and workforce funds to reengage disconnected youth in three underserved neighborhoods. Gordon also served as the local site lead for a national collective impact initiative that addresses systemic barriers that prevent youth from succeeding at education and employment.
Gordon holds a bachelor’s degree in human development from Howard University and a master’s in human development and family studies from The Pennsylvania State University.
