EvoNexus Demo Day Draws Crowd as Incubator Gets Bigger, Better

A little more than five years ago, CommNexus CEO Rory Moore called a news conference outside the former Leap Wireless headquarters to announce the formation of a pro-bono, non-profit incubator for San Diego tech startups. At that time, venture funding in San Diego was in critical condition—especially in the tech sector—and Moore acknowledged that “it’s miserably hard for a company to get funded in the seed round here.”

Since then the EvoNexus program has expanded beyond its initial focus on telecommunications startups, and evolved as a startup incubator to become the biggest and probably the most visible beehive of startup activity in the San Diego region.

Moore has been able to sustain the no-strings-attached program—EvoNexus startups do not have to give up equity—by drawing financial support from CommNexus member companies, including Qualcomm (NASDAQ: QCOM), Cisco (NASDAQ: CSCO), and especially the privately held Irvine Company, which is now providing free office space for a third EvoNexus incubator in Irvine, CA.

Moore has a series of statistics that he proudly cites whenever he gets an opportunity: His latest update shows a total of 826 startups have applied to get into EvoNexus; 68 were accepted and 58 are still active; over 1,000 jobs were created; and companies have amassed $573 million in total venture funding and acquisition outcomes (a one-of-a-kind statistic that conflates investments and exits as “total money raised” by EvoNexus companies).

He also notes that seven EvoNexus companies have been acquired since 2009—Qualcomm acquired Fatskunk; Silanna Semiconductor bought IO Semiconductor; DigitalGlobe took over Tomnod; Total Transit purchased GoFastCab; Five9 acquired Hold Free Networks, and Outerwall (aka Coinstar) got EcoATM. Financial terms were not disclosed in some cases, but the biggest so far was Outerwall’s $350 million payout last year for EcoATM, which created sophisticated kiosks that enable consumers to recycle cell phones and other mobile devices.

Demo Day at EvoNexus (photo courtesy of EvoNexus)

Demo Day at EvoNexus (photo courtesy of EvoNexus)

In the early going, the big drawback at EvoNexus was a lack of a mentoring program, or even experienced startup veterans to mentor startup founders—which has been key to the success of accelerators like Y Combinator and Techstars. But over the past couple of years, a strong grassroots effort by local volunteers has helped to mitigate this shortcoming—and a core team of EvoNexus staffers has worked hard to improve other aspects of the EvoNexus program.

Perhaps the most telling EvoNexus statistic, though, was the standing-room-only turnout for the incubator’s second official Demo Day. Roughly 280 people came to the downtown San Diego event last Wednesday to hear presentations by six EvoNexus startups. It was a record crowd for such presentations, and a testament to the high quality of startups going through EvoNexus these days.

The crowd favorite, measured by an audience vote, was Hush Technology—a startup founded in 2013 to develop “smart” earplugs. The vote was done the old-fashioned way, by tearing a paper ballot out of the program and dropping it into a bowl, and unfortunately, no prize was awarded.

Here is a brief rundown on each of the EvoNexus companies that made presentations:

Hush earplugs provide wireless noise-cancelling technology that enables users to sleep through anything, while at the same time allowing

Hush CEO Daniel Lee

Hush CEO Daniel Lee

important phone calls, calendar alerts, and wakeup alarms to go through a Bluetooth link with the user’s smartphone. CEO Daniel Lee, who graduated recently from the Jacobs School of Engineering at UC San Diego, told the audience, “The thing I hated most about college was the noise. I was the guy on the other side of the wall who was trying to sleep during those parties.” Lee said Hush currently hopes to raise $200,000 in seed funding, which would be used to set up a Kickstarter campaign the company plans to start in October.

Footprints has developed a mobile app that uses geo-location technology to deliver relevant information and sales and marketing data to sales reps when they visit customers. Such information could be that it’s the customer’s birthday, or that the customer has not placed an order for the previous three months. Footprints is the only geo-fencing app on Salesforce.com’s AppExchange. CEO Jonathan Friedman said the company is currently raising $1.5 million in early stage funding.

Tab32 has developed dental practice management software, which it is offering as a Web-based service. CEO Kiltesh Patel said the market, which consists of 165,000 dental offices in the United States, is a mix of legacy software and paper files, and about 60 percent of the dental offices have no automation. “We are going to move that needle for them and make them more efficient,” Patel said. Tab32 is intended to provide better patient data management and improve billing management. The company is currently seeking $1 million from investors, with a goal of recruiting 50 dental practices as customers in 12 months.

Koriist has developed software that enables users to stitch together the digital infrastructure of disparate communications networks. “We provide software that allows these machines to talk with each other without having to rip up networks and replace equipment,” CEO Chad Trytten said. While the initial applications would involve military networks, Trytten noted during his presentation that the Internet makes up only about 10 percent of the data networks in the world. The technology is ready, and Koriist is seeking $400,000 in early stage funding to hire additional sales employees, Trytten said. “We’re going to prove this problem in defense first and then move into commercial markets,” Trytten said. “Large defense contractors are willing to work with us.”

AllSeq has developed an online marketplace to help DNA scientists identify the gene-sequencing laboratories that are best-suited to provide sequencing services for various projects. As CEO Michael Heltzen said during his presentation, “We help researchers and doctors get to the source code of living things” by providing an online exchange that enables them to choose right lab, with the right technology, and at a fair price. The company is currently raising $1.5 million in funding.

Playmotion has developed gesture recognition technology that enables mobile gaming on a big screen TV. The system recognizes gestures by a player standing in front of the TV, much like Microsoft Kinect, turning a smartphone or tablet into a game console. Matt Flagg, Playmotion’s chief technology officer, said the company also has developed a proprietary approach that doesn’t require a software developer kit to control the game, or any mobile app. Playmotion is raising $1.1 million to bring the technology out of the lab and into the living room.

Bruce V. Bigelow was the editor of Xconomy San Diego from 2008 to 2018. Read more about his life and work here. Follow @bvbigelow

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