Dynamo Dispatch (10/26/20)

Issue 126 | Ware, Transmute, Applied Intuition

Dynamo Dispatch. Weekly update from Dynamo Ventures covering the latest and greatest in supply chain, mobility, and building venture-scale businesses.

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🎙 Check out Dynamo's podcast series, The Future of Supply Chain.

Weekly Commentary 💭

We extended our application window for our Venture Fellow program till 11/15. If you are a recent graduate, we invite you to apply. Fellows get to experience the world of VC and startups as a key member of our organization.

We Are Dynamo,

Santosh, Ted, Barry, and Jon

Note: please add “dynamo@substack.com” to your email client so you don’t miss future issues due to aggressive spam filters.

Supply Chain 📦

Forwarders Slam Maersk: ‘Moving From Supplier to Becoming a Competitor’. Maersk draws stark criticism from major forwarders over concerns the line’s new integrated business and aggressive strategy creates a conflict of interest and undermines forwarders. As a result, DB Schenker moved 90% of its freight volume loaded at Maersk to other shipping companies, while others began exploratory measures of removing volumes away from the Danish company. 

Premium Container Service Uptake Pulls Industry Away from Commoditization. In the container freight market, shippers have seemingly adjusted to premium services, marking the shift away from commoditization toward value creation. For years the industry experienced lackluster service almost to the point where there was unnoticeable variation between first and second-tier providers. “Now, initially it’s through these premium services, but in our view, the premium services are allowing the market to move toward a new norm. I believe that there’s certainly going to be the reestablishment of service tiers among the carriers”, said James Caradonna, GM Pricing/Americas at M&R Forwarding and Multi Container Line. In related news, Container Shortages May Persist Well Into 2021.

Driverless Middle-Mile Deliveries Appear on the 2021 Horizon. Dynamo portfolio company, Gatik moves one step closer to driverless middle-mile deliveries as its partnership with Walmart shows promise. Since the summer of 2019, Gatik has been operating box trucks ranging from 10 to 26 feet on fixed routes from a Walmart “dark store” in Bentonville to a local store. Sam Saad, Head of Ops at Gatik said driverless vehicles may hit roadways by next summer. Related to middle mile, Prologis: Warehouse Rental Prices Creeping Higher.

Covid Era Subsidies May Worsen Global Trade Tensions. International friction already existed in light of tariffs, now renewed nationalism rhetoric may inflame tensions between open and closed economies, pushing impacted businesses to re-assess supplier bases. Deborah Elms, founder and executive director of the Singapore-based Asian Trade Centre said “The default will be: closer to home, regional agreements, bilateral agreements, where firms — if they’re smart — will start leveraging these opportunities.” Speaking of Covid-19, Will We Need 8K Jumbo Jets for Vaccine Distribution?

FedEx Transforms Stores Into Online Return Centers. Reverse logistics has long served as a crucial pain point for logistics providers. Expanding into more than 2K stores nationally, FedEx is teaming up with Happy Returns to facilitate in-person returns. Online shoppers from Happy Returns’ list of retail partners can return products in person, without a box or label, for an immediate refund or exchange. Speaking of eComm logistics, Regional Carriers Prep for Influx of Parcel Opportunity and 75% of Merchants Say Two-Day Shipping Boosts Competitive Advantage

📊University of Arkansas: Battling Truck Driver Burnout. According to the ATA, 2019 experienced a shortage of almost 61K truck drivers as industry retention struggles drag out year after year. A University of Arkansas report coins exhaustion, cynicism, inefficacy, stress, and burnout as key accelerators of high driver turnover rates. Also in surface transportation, CSX Seeks to Nab Trucking Market Share Amid Tightening Capacity

Mobility 🚗

TAUR Launches eScooter Built for Roadways. First launched on Kickstarter in 2019, TAUR built its new eScooter with roadway riding in mind. Scooters come equipped with Kevlar-reinforced, puncture-resistant tires and wheels meant to withstand pothole and other roadway impacts. With charging times 3x faster than usual, the scooter only needs 2 hours to achieve an 80% charge. ICYMI eScooter Injuries are Most Common on Sidewalks

📊Climate Insights 2020: Electric Vehicles. Soliciting American opinion on EV adoption, a survey finds 57% of future car buyers are willing to consider an EV and 29% believe driving an all-electric car meaningfully helps the environment. Results also show the future prevalence of global warming emerges as a key driver of openness to purchasing an EV. On the topic of sustainability, Uber Invests £5M for EV Charging in Less Affluent London Boroughs while Lime, WWF Partner to Promote Clean Transportation.

GM Invests $2B into Spring Hill for its New EV. The GM Spring Hill, TN plant will become the automaker’s third EV manufacturing plant, joining others across the state of Michigan. Despite building Cadillac’s new Lyric EV, the plant will also manufacture ICEs. GM said in a statement, “Through this investment, Spring Hill’s paint and body shops will undergo major expansions and the general assembly will receive comprehensive upgrades, including new machines, conveyors, controls, and tooling,” as the renovation will begin immediately. If you were wondering, When to Use the New Hummer’s CrabWalk Feature.

New Tesla Batteries May Last 2M Miles. Updated results from a Tesla researcher allude to its batteries lasting over 15K cycles or the equivalent of 2M+ miles in an electric car. Findings also show minimal capacity degradation when batteries are discharged between 25% to 50% of their capacity. Also, The Lithium-Ion Battery With Built-In Fire Suppression

Tesla’s New AV Software Catches the Eye of US Regulators. On Tuesday, Tesla released a beta version of its Full Self Driving software upgrade to a group of “expert careful” drivers. Regulators draw caution and “will not hesitate to take action to protect (the) public against unreasonable risks to safety." The abundant caution comes as the NHTSA recently investigated 19 crashes involving Tesla vehicles where it’s believed some aspects of the advanced driver assistance system were engaged at the time of the incident. Related to autonomy, The Insect Problem Plaguing Sensor Faces.

Alan S. Boyd, Remembering the Nations First Transportation Chief. A lawyer and chief executive who first served as Secretary under Lyndon B. Johnson, Boyd’s monumental efforts laid the foundation for a Cabinet-level agency that has grown from a $5.5B to $76.5B budget. Boyd was a champion of mass transit service, a cause that brought him to Amtrak in 1978.

Fundraises, M&A, Talent 💸

YPC Technologies Raises $1.8M in Seed Funding Led by Hike Ventures LLC and Real Ventures. The Montreal-based company builds robotic kitchens and maintains the vision of making food more accessible. YPC plans to use the financing to expand its engineering team and launch a beta version of its products and services. 

Transmute Raises $2M in Seed Funding Led by Moonshots Capital. Transmute is a Texas-based data exchange platform for global trade digitizing trade documentation in a cryptographically verifiable and traceable way across an entire logistics ecosystem. Fresh capital will help to expand its Austin-based team to service increasing customer demand.

Ways 2H Raises $2.5M Led by Pacific6 Enterprises. Ways2H, a leading developer of solutions that convert the world’s worst waste into clean hydrogen fuel for mobility, microgrids and power generation. A specific use of capital was not detailed. 

Ware Raises $2.5M Seed Round Led by UP Partners. Based in San Francisco, Ware is a technology startup deploying autonomous drones for warehouse inventory counting. Funding will be used to further Ware’s artificial intelligence and support customers as they deploy their technology.

ThinkIQ Raises $11.6M in Series A Funding Led by Ecosystem Integrity Fund (EIF).ThinkIQ delivers unprecedented material traceability and insight into ways to improve yield, quality, safety, compliance and brand confidence. With fresh capital, the company will accelerate growth of its digital manufacturing platform, which helps manufacturers improve yield, quality, safety, compliance, and brand confidence while reducing waste and environmental impact.

LM Industries Raises $15M Led by Mirai Creation Fund II. Parent company of Local Motors, LM Industries launches technology-forward products and begins every product with community-powered, human-centered design. Funding will enable Local Motors to deliver Olli to customers and consumers who are seeking ways to redefine local mobility.

Dance Raises $17.7M in Series A Funding Led by HV Holtzbrinck Ventures. Dance is an eBike subscription service founded with the purpose of positively impacting health, sustainability, and livable cities. The funding will help expand the service beyond its current pilot program in Germany.

ShopUp Secures $22.5M in Series A Funding Led by Sequoia Capital India and Flourish Ventures. ShopUp provides easy access to B2B sourcing, last-mile logistics, digital credit, and business management solutions to small businesses. The funding will help in increasing ShopUp’s retail reach, as it deepens its partnerships with manufacturers, and focuses on building tech-first infrastructure.

Applied Intuition Raises $125M Series C Led by Lux Capital, Andreessen Horowitz, and General Catalyst. Applied Intuition provides simulation software and infrastructure to test autonomous systems. The startup plans to use this money to expand internationally while also pursuing adjacent verticals and software possibilities.

Company Building 🛠️

Early Work. “There's a lot more to new ideas than new startup ideas, of course. The fear of making something lame holds people back in every field. But Silicon Valley shows how quickly customs can evolve to support new ideas. And that, in turn, proves that dismissing new ideas is not so deeply rooted in human nature that it can't be unlearnt.”

How to Structure the Data Team. Had a similar conversation this week with a portfolio company that’s moving towards an embedded structure. The interesting point this CEO made was the importance of keeping the tie-in with engineering given they work off one another. We tend to take it a step further- collisions with engineering and data are important to drive growth and support a strong technical culture.

Why IPOs, Direct Listings, and SPACs Will Flourish in Startupland. Let’s turn this on its head a little bit- liquidity has a premium and historically, public equities demonstrated this premium relative to their private market peers. This waned till recently for what Tunguz calls the “access premium” in private markets. Enter SPACs- best of both worlds- provide access to growth with some of the liquidity benefits common to your favorite stock. Expect to see more SPACs into the new year (if not longer).

Who's Hiring? 👩‍💻

Application Architect at Stord in Atlanta, GA.

SDR at SVT Robotics in Norfolk, VA (remote ok).

Product Manager at Zeelo in London, UK.

Check out other jobs at Dynamo portfolio companies.

💥 Have you seen any interesting startups recently? Introduce us.
❤️ We would love your support. Please forward to friends and share on social media.
🗞️ If you were forwarded this and found it interesting, please sign up.
🎙 Check out Dynamo's podcast series, The Future of Supply Chain.

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