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EvoNexus Seeing Opportunities in Orange County Expansion

CommNexus, the local nonprofit that helps young tech companies get on their feet, is expanding beyond San Diego County with the aid of Cisco Systems Inc. and the Irvine Co.

In the span of a month, CommNexus and its EvoNexus incubator announced a partnership with Cisco (Nasdaq: CSCO) — the $48.6 billion Silicon Valley networking equipment stalwart — and a plan to export its EvoNexus incubator model north to Orange County.

EvoNexus has incubator facilities in downtown San Diego and the University Towne Center neighborhood. The Irvine Co. is the common thread, CommNexus executive Walter Davis said. It owns the buildings with the two San Diego incubators and the building that will house the Orange County facility.

An Irvine Co. spokesman sees the EvoNexus partnership, begun in 2009, as a success, and the donation of space seems to be paying dividends.

EvoNexus’ incubators in UTC and downtown have graduated about 30 companies to date, including several that have taken nearly 50,000 square feet of office space with Irvine Co., the spokesman said.

Those businesses include IO Semiconductor Inc., which took 22,000 square feet in Irvine Co.’s Eastgate campus office property, and MD Revolution Inc., which took 9,000 square feet in the Irvine’s La Jolla Gateway complex.

Companies selected for the EvoNexus incubators stay in their space with no strings attached. EvoNexus takes no equity in the young companies and charges nothing. Companies spend four months to two years in the incubator.

Cisco Seeking Relationships

San Jose-based Cisco has not been able to ignore the phenomenon.

A joint program called Cisco Entrepreneurs in Residence plans to welcome one to three companies into a San Diego program before the end of the year. EvoNexus will accept applications from late July to Aug. 31.

According to a joint EvoNexus and Cisco announcement, Cisco is looking to build relationships with companies working in big data, cloud computing, enterprise mobility and what’s called the Internet of Everything. The latter refers everyday objects having the ability to trade data with each other. Cisco also wants its prospective partners to work in the business-to-business space.

EvoNexus and Cisco are dangling the global reach of Cisco and its corporate support as incentives. Startups admitted to the program will receive financial support and benefits from the Silicon Valley company, access to mentors and opportunities to work with Cisco employees — on the business side and the engineering side. That is on top of other benefits from EvoNexus, including free office space in its downtown or UTC location.

The maker of Internet routers and related technology reported about $9 billion in net income on almost $50 billion in revenue during fiscal 2013. Securities filings say Cisco lost a net 1,200 employees recently, due to attrition and workforce reduction. That would put its head count at about 74,000 employees, split evenly between the United States and the rest of the world.

Cisco has other partners besides EvoNexus. It recently announced a similar project with the Chicago Innovators Exchange.

EvoNexus already has a corporate partner in Qualcomm Inc. (Nasdaq: QCOM) which runs Qualcomm Labs at EvoNexus.

6 to 8 Startups Sought to Start Up

Meanwhile, Irvine Co. plans to prepare space for EvoNexus later this summer in one of its buildings on California Avenue in the University Research Park section of Irvine. It plans to open it early in the fourth quarter, a CommNexus spokeswoman said.

The site is an easy walk to the center of Aldrich Park, the hub of the University of California, Irvine campus, which houses a medical school, engineering and life sciences programs, and the California Institute for Telecommunications and Information Technology.

EvoNexus plans to admit companies to its Orange County facility by Nov. 1.

“We expect a class of around six to eight startups from a variety of technology sectors,” said Michele Yoshioka, director of programs and operations with EvoNexus and CommNexus.

Davis said the two San Diego incubators have different atmospheres. The downtown campus is software oriented and has a collaborative feel, while the UTC incubator deals with specialty hardware and has more of a “heads down” feel.

“We’re thinking Orange County will be a little bit of both,” said Davis, who is vice president for organizational development with CommNexus, a former defense executive and a retired U.S. Navy vice admiral.

EvoNexus has 26 companies in incubation. Those companies and the ones that have already graduated from the program have collectively created more than 1,000 jobs and raised more than $541 million in funding and from being acquired since the incubator’s inception in October 2009, EvoNexus said.

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