Plug and Play San Diego Finds Home in New Downtown Works Space

Plug and Play San Diego has formed a partnership with Downtown Works, a new co-working space in downtown San Diego, which will give the local Plug and Play program a place to call home.

Plug and Play San Diego, established in 2013 as a satellite of the Sunnyvale, CA-based incubator, has funneled 15 local startups through the Silicon Valley program after providing some coaching and other services in San Diego. The program provided each company with $25,000 in financing, and a spot for three months in the startup camp program at the Plug and Play Tech Center in Sunnyvale.

Alex Roudi, the San Diego investor backing the Plug and Play program here, has described the local effort as a bridge to Silicon Valley, by enabling the San Diego companies to make connections and raise funding in the Bay Area. Among other things, they get an opportunity to pitch to investors and industry representatives at Plug and Play’s quarterly “expo” event. Companies that participated in the program include Airbitz, Rock My Run, TipNetwork, Vioozer, Raynforest, Stretchr, and Ahorro Libre.

“We’ve always been on the lookout for a strategic location where we could bring in our existing portfolio companies, and possibly some of our future prospects,” said Alex Roudi, the San Diego investor backing the local Plug and Play program. “We would like to launch an accelerator based here, and bring in additional resources from the Bay Area.”

Under the new partnership with Downtown Works, startups that enroll in Plug and Play San Diego should be able to raise more than $25,000, said Gaby Dow, a spokeswoman and partner of Plug and Play San Diego. In the Bay Area, Roudi said about 180 companies pay Plug and Play an annual fee to get an inside track on incubating startups, and in some cases could be making investments in San Diego companies as well.

Downtown Works is a co-working space for technology startups that opened last month in a completely renovated office building at the corner of India and West B streets. The co-working space occupies the top floor and mezzanine of the building, and includes shared desks, offices, conference rooms, kitchen, and rooftop deck. With over 15,000 square-feet of space, the facility has room for dozens of startup teams, and already houses Industry, a Web-based professional networking and job market for the hospitality industry, and the San Diego office of OurCrowd, the Israeli crowdfunding platform.

While there has been a proliferation of tech co-working spaces in or near downtown San Diego—the list includes DeskHub, WeWork, Nest/Cyberhive/iHive, EvoNexus and The Vine—the thing that makes Downtown Works different is its strong ties with financing and technical resources in Mexico.

The four partners backing the $9 million project include Wolf Bielas, a San Diego angel investor, serial technology entrepreneur, and alumni of Mexico’s Monterey Institute of Technology, and Michel Cohen, a San Diego investor with extensive financial ties in Mexico City. (The other partners are Edward Adato and Daniel Schwarzblat.)

“I have a vast network of friends in San Diego and Mexico City who are serial investors,” said Cohen, who is a principal at Walket Capital and affiliated with LM Advisors, a San Diego investment firm with over $1.3 billion under management. Cohen described Downtown Works as a “hyper-connector.”

Downtown Works San Diego co-working space

Downtown Works Interior

“It’s a place where we’re going to put 250 like-minded people, where I can mentor him, you can mentor me,” Cohen said. As entrepreneurs, “Most of us have a diamond in the rough, and you polish it by talking with others.”

Bielas, a longtime San Diego resident who founded RSI ID Technologies, a San Diego area maker of inexpensive radio-frequency identity tags and RF readers, said he started to invest in technology startups after selling the business (which merged with Sirit in 2008) to Federal Signal in 2010.

“I could see there wasn’t much of an ecosystem in San Diego in comparison to San Francisco or Tel Aviv,” Bielas said. “My dream is that anything that has to do with startups, that people will think of Downtown Works as kind of the epicenter of innovation in San Diego.”

Of course, the proliferation of similar co-working spaces for tech startups in downtown San Diego could pose challenges for landlords like Bielas and Cohen. New York-based WeWork, for example, is renovating six floors in a downtown San Diego high rise to create a co-working space with about 90,000 square feet. DeskHub, a co-working space in San Diego’s Little Italy neighborhood, recently expanded its space by 8,000 square feet.

But for startups, there will be more available options and perhaps the market for downtown office space will be a little more competitive.

To Walt Tendler, a consultant who has worked as the chief financial officer at San Diego-based Avalon Ventures and Mission Ventures, the proliferation of co-working spaces is making downtown San Diego “a really entrepreneur-friendly area. It’s really cool.”

Bruce V. Bigelow is the editor of Xconomy San Diego. You can e-mail him at bbigelow@xconomy.com or call (619) 669-8788 Follow @bvbigelow

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