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

Dynamo Dispatch (01/14/19)

Issue 49 | "White Glove Love", Daimler, Amazon/Baylo, Geospock

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

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

Weekly Commentary πŸ’­

The NY Times circulated a piece this past week discussing a trend of founders declining venture capital. I thought it's worth cutting through the noise to address venture funding as it relates to supply chain startups, specifically. To start, not all businesses are created equally and more importantly, each founding team have their own dynamic as it relates to ambition and growth capability. These attributes ultimately impact a company's financing strategy.

As Josh Kopelman at First Round puts it, venture capital is "jet fuel" and a very specific set of companies fit the criteria to take it. Peeling back the onion, not all venture funds and specifically, seed funds are created equally β€” smaller funds have smaller exit value needs vs their larger counterparts. The driving factors ultimately boil down to check size, ownership, and reserves. To detail, more a fund owns per dollar deployed and the better they can maintain that ownership, the greater tolerance for β€œsmaller exits.” This requires a fund to β€œgo big, later" or "go early and lock down ownership” - not easy in the reality of things. A simplified example: $10M with no expenses, 25 portfolio companies, $400k for 5% ownership, no reserves so assume 50% dilution before exit, oversimplification of the return distribution, not taking a preference stack into account. Most GPs target 3x returns over a 10 year fund life. So what does that mean? That means that the fund needs $400M exit value to return $10M and a $1.2B exit value for $30M. Turns out dilution is nobody's friend. So what does this mean for founders in the space?

The diversity of functions, problems/solutions, and business models make almost the entire spectrum of financing options viable in supply chain. The industry is typified by fragmentation, service-first thinking, physical goods, and short time to revenue but long time to critical mass (and scale). This generally means that venture capital is ill-suited for most businesses due to product, go-to-market, revenue model, and timing issues. Simply put, VC is good for businesses that have 1) a large addressable market/a market that's fast growing, 2) a founding team that gets the demands of VC, and 3) an opportunity that can reasonably generate a healthy return for the investor (assume 3x minimum in 10 years). Other factors tend to include: large product investment requirements, path to product/market fit, and scalable go-to-market (the latter two are usual not evident/fully clear at seed). It's great that more financing options are becoming available. VC as the status quo, go-to for funding is incorrect. So what are the other options?

Money comes from many sources and full of nuance: bootstrap/self-funded, high net worth investors, private equity (majority investors), bank financing, specialty lending, grants, revenue, and VC. Bootstrapping is great for businesses that have relatively fast time to revenue and for founders who want to own most or all of their business. I see many who are fortunate to have friends/family with the means, take some dilution or a loan to juice their progress without being beholden to a certain return profile. Freight brokerage, mid-market SaaS solutions are a great example of businesses that could grow this way. High net worth investors (usually angels or family offices) are great sources of capital that tend to be less sensitive to returns. Asset-based businesses or those that require manufacturing can be a fit for this group. It’s worth noting that neither of these aforementioned sources preclude one from raising venture and they aren’t exclusive to venture backed companies despite being associated with them. Private equity has long played in supply chain. They tend to seek tenured operators, majority positions with control rights, and write large checks up front in the hopes of 7-10 year gains β€” smaller firms tend to be more open to minority investments. We've seen freight forwarders, brokerages, and increasingly, SaaS businesses attract PE. Bank financing and speciality lending is debt β€” an obligation on a company balance sheet that can also include minimum cash payments, and performance covenants. It's usually harder to come-by for startups but can be a fit for asset heavy industries, manufacturing, and where factoring (fronting cash for receivables) is advantageous. I would note specialty lending can be highly bespoke so can be driven off revenue or growth metrics. Grants are usually great for really early, high-tech products but requires a special approach to earn. We do see this as a precursor to venture capital or other funding in the case of β€” robotics, energy, applied ML solutions.

While not an exhaustive perspective, it should be clear that VC fits a minority of businesses in this sector and the spectrum away from VC. "VC raised" is an ego metric and not all business need VC to grow to a critical mass. Furthermore, founders that raise VC are not any more special vs those who have the self awareness and realization that they're/their business are ill-suited for it. The easiest way to attract outside capital ultimately is your customer's dollar. Revenue is the best source of capital and if you're earning it consistently and acquiring it efficiently, that generally brings investors of all types to your door.

We Are Dynamo,

Santosh πŸ’₯

Supply Chain πŸ“¦

DHL Robotics Investments Provide 25% Productivity Boost. We noted that industry payroll numbers showed a slowdown in hiring on the part of parcel carriers. This can largely be attributed to an improved ability to cope with "surge" β€” industry-speak for spikes in volume β€” without costs escalating in lockstep. Automation investments are starting to show their worth by empowering existing talent and seasonal hires to cope with more volume.

πŸ“Š US Holiday Parcel Delivery Benchmarking. Shipmatrix analyzed parcel carrier data through the holiday and it turns out that USPS Parcel Select led the industry with 98.8% on-time delivery. UPS came in second at 98.3% and FedEx at 97.6%.

Profile of Wisetech Founder, Richard White. White leads Wisetech, one of the most acquisitive players in supply chain technology. Their strategy has been to serve as an "app store" by aggregating products that customers can use across geographies and functions. Also loved this statement β€” "Technology convergence is also going to take a big share of the logistics spend and turn it into a technology spend. This means technology could account for 10% of the industry's revenue in a decades time."

🌟 eCommerce Driving "White Glove Love". As people continue to gain comfort around the purchase of beds, furniture, appliances, the demand for white glove, last mile services will increase. Many incumbent carriers have growth their exposure to this offering. This week, JB Hunt paid $100M for a NJ-based company that specializes in large deliveries.

JD Ready to Offer "Fulfillment Tech as a Service". The Chinese eCommerce behemoth is ready to offer it's retail fulfillment platform to retailers in North America (the existing network in China is highly automated and can offer same-day and next-day delivery to 99%+ of the country). It looks like they are going head-to-head with Amazon FBA that focuses on SMBs, primarily. The question is if large retailers will use JD's services β€” perhaps if they gain comfort that the JD/Google effort won't cannibalize sales?

Dynamo Dispatch (01/07/19)

Issue 48 | Reverse Logistics, Fleet Auctions, Forager

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

❀️ We would love your support. Please forward to friends or share on Twitter or LinkedIn.

πŸ—žοΈ If you were forwarded this and found it interesting or helpful, please sign up.

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

Weekly Commentary πŸ’­

Happy New Year!

We're coming into the new year with jittery equity markets amid an ongoing US government shutdown and trade war concerns. It seems markets are cautious and hopeful for solutions to our shutdown and amicable trade agreements. The perks of being involved with industries that are the backbone of the economy is that as founders, we tend to have a better pulse of the market: container flows, truckload volumes, warehousing activity, inventory builds, automobile purchasing, etc. It's helpful to have such leading indicators and understanding of sentiment given that a recession is called only after two consecutive quarters of economic contraction. It's worth noting that perception and fundamentals can detach and that can be unnerving. A fundamentally healthy economy can be driven to recession if enough Americans "feel" less wealthy and curtail spending; business start to delay or defer hiring, purchasing, and investing; and credit moves slower across the system. Founders in the industry should leverage their vantage point to be pragmatic, plan ahead, and exercise caution through a downturn.

We tend to hear "cash is king" more often during recessions and resulting recoveries. Cash is always king and that means your startup should have enough to weather a 18-24 month recession (the last recession was 18 months with durations as short as 6 months). Understand that startups with product/market fit or a clear path to product/market fit will tend to raise financing albiet at slightly lower valuations. Middling startups namely those with a slower path to product/market fit, high capital consumers, or poor growth will tend to get cash at poor terms. A third bucket of startups might be unable to seek venture funding and will need to shutter or bootstrap through. The benefit of supply chain startups is that they tend to bring customers operating leverage and reduced costs β€” a huge focal point for any business dealing with economic contraction.

As a founder, be cautious, moderate burn and lean into exercises that can bring greater optionality in a slow business climate. If executed well, this can result in reduced (or no) reliance on outside investment. All that said, a slow-down is a boon for well-capitalized startups who can invest into a slow down. Prices tend to fall not only for assets but also talent, product investments, and customer acquisition. I recall learning early in my career that companies that invest through downturns (not only during growth cycles but consistently), especially when their competitors sit out, tend to be better positioned during the upturn.

On the talent front, keep on top of competitors as well as employers of great, costly talent (think ML, data science, senior sales). Ensure a plan for new hires β€” what will they work on? can they "pay for themselves" within 12 months? How do we hire the best before others?

On product, founders (assuming you don't have a PM yet) have to know their competition and competitive products really well. It's essential intelligence to assist in ruthless prioritization and build for where the market is going. Generally this is talent-driven, hire more to build the high-need/high-value aspects of your offering you've deferred, didn't have bandwidth to build, have your competitors beating you on the margin, or know will become necessary from customers in the near future. This approach importantly ensures that any new hires will work on things that matter and accrete value to your business.

Customers and sales cycles might be overlooked for cash and liquidity concerns. As previously stated, perception can manifest itself into a recession. Monitor customer outlook and sentiment, emphasize ROI opportunities, and try to get large opportunities over-the-line in the next 6 months. Also know your competitors' weaknesses and prep your sales team to take share should any get in a cash bind or start to be stretched on product development.

I would suggest speaking with your investors who know your business well, have certain opinions on the current economic climate, and can help determine the appropriate strategy.

We Are Dynamo,

Santosh πŸ’₯

Supply Chain πŸ“¦

🌟 Reverse Logistics in Focus: Managing Reverse Logistics During the Holidays. With timely deliveries turning into table stakes for eCommerce, the need for a timely return and refund experience is not be far behind. With promises of free returns, consumers are buying, trying, and returning up to 30% of online purchases driving a need for more robust reverse logistics operations. Reserve Logistics Is Primary Driver of Warehousing Demand. CBRE estimates that 700M sq ft of space is being used for handling ~$100B of returns.

Trucking Survey Shows Economic Optimism and Hopes for Infrastructure Improvement. The Transport Topics survey of various trucking executives, shippers, and stakeholders reads surprisingly positive with continued hopes for government spending on roads.

Delisting from Instacart and Other Grocery Platforms. Grocery executives are asking the question, "how can we switch eCommerce providers?" as Instacart and other platforms disintermediate grocers from their customers.

🌟 Crash Course Into the African Supply Chain: A Call for Improved Infrastructure Plans With China. China is the leading infrastructure financier for the country β€” there should be policy that favors free trade and foreign direct investment without giving away the farm (or ports and roads in this case). Encumbrance of infrastructure prior to a major economic catalyst could create massive headaches. Ports, roads, rail need to be open, affordable, reliable, and safe. The Supply Chain Africa Needs. The "last economic frontier" requires improved policy (free trade zones, tariff reform, technology and manufacturing incentives), fundamental fixtures of supply chain and informed actors (regional and local distributors, customs agents, forwarders), investment in associated technology platforms (distribution, warehousing, demand forecasting). The result could be a massive economic powerhouse that has massive intra-regional trade flows.

πŸ“Š Rail Volumes Up in 2018. 2018 U.S. rail carloads increased 1.8%, or by 238,857 carloads, annually to 13,640,641, compared to 2017’s 13,401,784. Intermodal containers and trailers increased 5.5%, or 751,217 units annually to 14,472,849. From my conversations, many rail executives noted they were also benefiting from elevated long haul trucking rates and shipper efforts to maintain margins.

New Whole Foods Openings Likely To Speed 2 Hour Delivery. Whole Foods provided Amazon a network of grocery stores that can also serve as a base for the distribution of perishable goods. Now, a planned ramp of new Whole Foods locations can bolster the advantages of micro DCs in driving 2 hour or same day deliveries.

Intel Launches New IoT Platform with Honeywell. The effort is part of a broader joint effort to provide solutions for logistics. The Connected Logistics Platform provides supply chain visibility with a focus on quality, integrity, and security.

Mobility πŸš—

🌟 Trucking Fleets Turning to Action Market for Assets. Strong freight rates and a need for assets has driven large fleets to join owner-operators at auctions. Interesting to note that overall auction supply was low as assets were put to work β€” so low that 4-6 year old trucks had no depreciation priced in to their values (usually 1-1.5%/month). Some asset owners opted to sell model years in that range as they garnered a premium with relatively low milage and in some cases, an on-going warranty.

Dynamo Dispatch (12/17/18)

Issue 47 | McKinsey on Autonomous Trucks, Optibus, Shipa

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

❀️ We would love your support. Please forward to friends or share on Twitter or LinkedIn.

πŸ—žοΈ If you were forwarded this and found it interesting or helpful, please sign up.

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

Weekly Commentary πŸ’­

It's been a great year here in the "Dynamo of Dixie.” The Dynamo Team and I wish you and your loved ones a Happy Holiday and Happy New Year filled with health, happiness, and success. We'll be back in the New Year rested and ready for a great 2019!

We Are Dynamo,

Santosh πŸ’₯

What We’re Reading πŸ“–

Supply Chain & Mobility

McKinsey on Autonomous Trucks. The first in a series, McKinsey explores the full industry impact of autonomous trucking. It's expected that full autonomy (10-15 years out) would drive operating costs down by 40% with the distribution of savings still unclear.

2018 Mobility Study from Continental. In the US, there's mixed sentiment on AVs being helpful vs taking the fun out of driving. It is interesting to note that majority of US respondents believe AVs will be a facet of life in the next 5-10 years. Americans are also critical to insurers monitoring driver activity.

ISM Outlook Positive for Transport & Warehouse Investments. A survey of executives in the service sector (including transportation and warehousing) show a 3.4% increase in CapEx with a close to 14% average increase among respondents who expect to boost investments. Overall, economic growth is expected to be positive but more moderated amid an uncertain global trade environment.

A Tumultuous Week for XPO. Short seller, Spruce Point Capital issued a note citing agressive accounting and questionable management practices amid a spree of acquisitions since 2011. The stock price is -56.6% for the year and -44.3% since it's 52-week peak, but +15.4% on Friday as sell-side analysts offered bullish outlooks.

Profile of Bird and Founder, Travis VanderZanden. Suitable way to close 2018, "The Year of Micromobility" in my humble opinion. VanderZander has led Bird to 120 cities, 10M+ rides, and $415M in funding (with a recent $2B valuation) in 14 short months.

Qantas' New Flight Planning To Save $40M/Year. The Constellation system was made in partnership with the University of Sydney and accounts for thousands of routes and millions of data points to build a "cost map" with suggestions around the most efficient route. The system replaces a 30 year old methodology that only looks at 3 or 4 routes with a handful of data points.

New Yorkers, Your Subway Might Move Faster. Aging, misconfigured, and faulty signal systems as well as overly cautious driver training have contributed to the degrading service of the NYC subway system. This last year, a task force was created to analyze every mile of track and suggested a speed increase at 130 locations (34 approved to date) with speed limit changes expected at 100 locations by spring.

UPSNav Routing Pilot Successful. A previously mentioned pilot of UPSNav was deemed successful and will be broadly rolled out in ORION (On-Road Integrated Optimization and Integration) tool drivers use. The system is tailored to the demands of UPS' last mile staff and can improve service levels, reduce mileage and fuel consumption.

A Profile on Scooter Hardware Leader, Ninebot. Ninebot admits that it was blindsided by the demand for electric scooters with sales up 6x, estimated market share of 80% and valuation of $1.5B. All that said, it faces questions over quality and safety after Lime recalled some Ninebot scooters over fire hazards.

Starbucks Expands with Uber Eats. The US pilot began this fall in Miami and will be rolled out through 2019. Uber continues to build the value of Eats ahead of it's 2019 IPO. Interesting to note that Uber began delivery in China in partnership with Ele.me (Alibaba).

Volvo to Release Electric VNR in 2020. The regional haul tractor will begin testing in California in 2019 with a broad rollout in 2020. Details on range and payload were scant but the electric powertrain is in use in FE models in Europe that have two electric motors totaling 370 kW, 496 hp, 627 lb-ft. torque, and range of 186 miles (on 6 batteries).

Postmates Launches Serve Autonomous Delivery Robot. The friendly sidewalk delivery robot has a patented "Socially-Aware-Navigation" system is supposed to allow for a more human-friendly experience. The Serve has a 30 mile range with maximum payload of 50 lbs.

Strategic Developments, Fundraises, M&A

Optibus Raises $40M Series B Led by IVP. Optibus builds routing software for public bus transportation systems. Alibaba also participated in the round.

Agility To Invest $100M in Shipa Over Three Years. Shipa is a digital logistics platform that includes eCommerce enablement services for cross border retailers, delivery and freight services.

Robotiq Raises $23M. Robotiq makes components for collaborative robots including cameras, sensors, grippers, and software. The round was led by Battery Ventures.

ABB Streamlines Business to Focus on Digital Industrial. The actions leaves ABB with #1 or #2 positions in electrification, industrial automation, robotics and discrete automation, and motion. ABB will return the majority of cash from the Power Grid divestment to shareholders.

Whole Foods and Instacart Part Ways. The wind down will occur through 2019 with a bulk of Instacart shoppers (part time staff who fulfill orders) expected to shift to other grocery partners such as Publix, Safeway, Kroger, and more. At it's peak, Whole Foods contributed to 10% of sales for Instacart.

Uber Looking to Deepen Relationship with Transport for London. Uber is seeking to incorporate already available data around bus and tube schedules to compete with Citymapper. Under Khosrowshahi, Uber is looking to facilitate mobility through private and public modes.

Amazon Plans Regional Air Hub in Ft. Worth, TX. The facility will go live next year and include sortation operations as well as the ability to handle it's growing scale and flight volumes.

Hyundai Plans $6.7B Investment to Boost Fuel Cell Production. The investment will occur through 2030 with a capacity to build 700k+ units (currently 3k). Fuel cells are competitive to ICE and electric by using hydrogen.

Continental to IPO Powertrain Business, Become Acquisitive in 2019. The IPO is slated for 2H 2019. $5B+ of proceeds from the IPO will be used towards ramping software competency via acquisitions.

Company Building

Managing Remote Teams. I've had remote staff and it requires some intentional process, communication standards, and rigorous approach to culture. Andreas Klinger, VP Engineer of Coinlist shares his thoughts.

Growth at Early Stage Enterprise Startups. Go-to-market is tough and the Head of Mid-Market Sales at Slack offers some of her thoughts around pilots, pricing, bottoms-up strategies, and more.

Which is More Important: New Account Growth or Account Expansion?. Tomas Tunguz on why new account growth is a better use of marketing spend and tends to be favored by venture investors. Ultimately, it's driven by the belief that distribution is the best long-term moat.

Building a Customer Centric Culture in B2B. Mathilde Collin, Co-founder and CEO of Front shares her approach. Few things stuck out to me: 1) Everyone at Front does support (Founders too!); 2) Public product roadmap; 3) Good and bad feedback is openly shared with team.

What We’re Listening To 🎧

Exponential View: Michael Liebreich on Climate Change and Technology. We've had the privelage of working with Michael around our investment partnership in Zeelo. He shares his thoughts on the US climate assessment, new energy, and technology.

Micromobility Podcast: Why Micromobility Platforms Matter. Dediu and Bruce discuss among other things: what a potential Apple entry into micromobility might look like; what platforms build on micromobility fleets might be like; network effects.

πŸ’₯ The Future of Supply Chain: Building a Culture That Wins. Amari Ruff of Sudu joins me to share his story. Amari was homeless for a period in his youth but is now a repeat startup founder who discusses the diversity problem in our industry and how to be intentional around building a winning culture.

Who's Hiring? πŸ‘©β€πŸ’»

Product Manager at Sennder in Berlin, Germany.

Senior Account Executive at Stord in Atlanta, GA.

Front End Engineer at LogisticsExchange in New York, NY.

Check out other jobs at Dynamo portfolio companies.

Dynamo Dispatch (12/10/18)

Issue 46 | Uber Freight vs Convoy, p44/Gatehouse, Rideshare IPOs

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

❀️ We would love your support. Please forward to friends or share on Twitter or LinkedIn.

πŸ—žοΈ If you were forwarded this and found it interesting or helpful, please sign up.

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

Weekly Commentary πŸ’­

Hello from NYC (again) β€” the city that taught me so much as a professional and uniquely provided insight for many of the relationships, conversations, and decisions I make today.

As an investor, I spend time speaking with talent that our portfolio is looking to hire. I had a conversation this morning with an individual that has a similar background to mine but struggling with the realities of joining a startup β€” lower cash compensation. It was a life altering decision for me at 26 to leave a well paying job, burn through savings, and be all-in on achieving a dream. I know I'm not alone in this and that the decision can be really uncomfortable.

The anxiousness of leaving "the known" especially when one is a consultant, banker, or corporate executive cannot be focused on cash compensation. Startups require different personalities, backgrounds, and skillsets in what can be dubbed a "pressure cooker environment." This is what provides an individual a great platform for personal and professional growth. Where else can someone come make or impact key decisions around product, sales, or culture? The short-term compensation trade-off comes with knowledge and experience that are worth multiples in long-term gains β€” early hires/early fires, team dynamics, building a MVP, sales, scaling a team, and more! The best founders lean into employee goals and work to drive outcomes that contribute to them as well as company objectives.

It's important to understand that the current cash compensation is temporary. In an event of a success, as a Series A round is raised, salaries approach market-rate. In the event of failure (and this is a very real risk in startups), one will have a great body of experience and lessons to point to β€” it is NOT a scarlet letter. However, one must know their risk tolerance and lifestyle aspirations and how startup compensation plays to that.

The "compensation" in joining a startup are numerous and not exclusively cash-related. I am glad I made the difficult decision and having weighed the decision, I can honestly say I spend my life truly doing what I love. BTW β€” several of our companies are hiring, send me an email at santosh at dynamo dot vc if interested!

We Are Dynamo,

Santosh πŸ’₯

What We’re Reading πŸ“–

Supply Chain & Mobility

Uber and Convoy: Lane Explorer vs Shipper 2.0. In a world where digital freight brokerage seems to be a "game of capital," Uber and Convoy released major updates to their shipping platforms. Uber is looking to build a moat around it's ability to accurately price lanes two weeks in advance and still earn healthy margins while offering shippers a discount to their forecasted price. Convoy, also using data is trying to prove their worth and ultimately show their customers that their platform is the more cost efficient for a shipper's trucking needs.

USPS Could Franchise Mailboxes. The Task Force on USPS released their report this past week and one of the potential solutions to the near $70B in cumulative losses ($3.9B in fiscal year 2018) could be to charge private companies a fee to deliver to individual mailboxes.

Local Knowledge is Key to Great Last Mile Delivery- DHL. β€œWhen setting up e-commerce operations, we are finding different consumer expectations on a country-by-country basis.”

NYU on Consumer Consumption & Mobility Preferences. A piece of the study focuses on estimating the impacts of online consumption practices on mobility practices. It turns out that 37% of Manhattanites and 26% of Parisians use express delivery or collection option. Further, 14% of Manhattanites and 9% of Parisians use instant deliveries.

The Story of Rethink Robotics. A pioneer in "cobots" Rethink was viewed as a leader in industrial robotics till a series of technical setbacks and cultural friction led to it's ultimate failure.

Dollar Stores Are Feeding More People Than Whole Foods. Dollar stores threaten grocery stores as they drive sales lower by ~30% even though most dollar stores have no fresh food, only a limited selection of packaged items.

How Starship Uses Neural Networks for Delivery Robots. An approachable explanation for the non-CTO using a real world example of neural networks in autonomous last mile logistics.

Tesla Battery System Proving It's Worth. Neoen, the owner of the giant Tesla battery system in South Australia, revealed that the energy storage system saved about $40 million over the last 12 months. The system only cost $66M β€” could it be a worthwhile investment for select coldchain or conventional distribution facilities?

JB Hunt Takes Delivery of First Mitsubishi Fuso eCanter EVs. The medium duty box trucks will be used in last mile operations. The vehicles cost $6/mi less than conventional diesel vehicles but range is limited to 80 miles.

The American Power Grid Can't Support EV At Scale. It turns out our power generation infrastructure could inhibit uptake. The issue specifically is around smoothing charging away from peak-use periods (afternoons in the summer in Texas) to non-peak periods using incentives such as "time of use."

Ford City Data Solutions. A data-driven, European-centric study on mobility in city environments. Interesting discussions around safety, trip timing, EV infrastructure, mode shifting, and more.

WaymoOne Struggles to Hit Full Autonomy Amid Service Launch. The launch on 12/5 comes with challenges as rider volumes seem anemic and safety drivers remain in the car.

Multimodal Transit and City Traffic. A call to focus on throughput of people vs vehicles as well as a system that provides multimodal transit options that supplement larger public transit arteries.

Strategic Developments, Fundraises, M&A

project44 Purchases Gatehouse Logistics. The pair had initially struck a partnership to improve visibility across US and Europe. The pro forma entity will be a leader in US-Europe freight visibility solutions and set the baseline for a global visibility platform.

Lyft and Uber File for IPO. Lyft beat Uber to making the confidential filing with both companies still unprofitable. Uber has been estimated to earn a $120B valuation with a net loss of $1.07B on sales of $2.95B in Q3. Comparatively, Lyft had a loss of $254M on sales of $563M. Both have their own strengths (Uber is international/Lyft is largest eScooter provider) and two wildly differing narratives. The big expected news by year end is Uber's acquisition of either Bird or Lime (owns minority stake) to own the micromobility market β€” Lyft recently closed the Motivate acquisition and is expected to invest in further scale-outs.

Dynamo Portfolio Company, Wise Systems Raises $7M Series A. The round was led by Gradient Ventures, Google's AI-focused venture fund. Wise provides dispatch and routing software for fleets.

Audi to Invest $16B on AV and EV Efforts through 2023. The investments will be made through 2023 and jive with the broader VW Group's efforts to double and triple down on emerging mobility technologies and business models.

Creandum and Point Nine Lead cargo.one Seed Round. The $3.2M round also saw participation from Lufthansa Air Freight in the air freight booking platform.

Farmstead Raises $2.2M to do Grocery Delivery, Better. Farmstead is building a fully integrated grocery delivery service that leverages a distributed base of cold micro warehouses and last mile network. The company also partnered with Udelv for autonomous deliveries. ARTIS Labs, Resolute Ventures, Red Dog Capital, and YC participated in the round.

Dynamo Dispatch (12/03/18)

Issue 45 | DHL, AWS DeepRacer and RoboMaker, Bird Platform

Dynamo Dispatch. Weekly update from Dynamo covering the latest and greatest in commerce and trade, #logisticstechnology, and building venture-scale businesses.

❀️ We would love your support. Please forward to friends or share on Twitter, Facebook, or LinkedIn.

πŸ—žοΈ If you were forwarded this and found it interesting or helpful, please sign up.

Weekly Commentary πŸ’­

A brief hello from NYC where we're hosting our first annual portfolio day. We have a series of interviews and presentations for our portfolio founders to benefit from the experience and wisdom of best-in-class operators.

It looks like policy news over the weekend around a temporary China-US trade policy truce and a "NAFTA 2.0" are seen positive by the markets. That said, I think the former is more of a delay or deferral around Trump's trade war rhetoric. The latter could just further complicate US political affairs as the deal must get congressional approval.

See you next week!

We Are Dynamo,

Santosh πŸ’₯

What We’re Reading πŸ“–

Supply Chain & Transportation

DHL to Invest $300M in Warehouse Modernization. DHL made a statement last week that they're serious about being a North American eComm logistics player with a massive warehouse modernization plan. The goal is to implement IoT, software, and robotics at 60% of their facilities. The news follows UPS pouring billions into modernization and network digitization.

Introducing Bird Platform. In a very Amazon Flex-esque move, Bird is allowing entrepreneurs to manage their own fleet of electric scooters. Bird will provide the logistics and charging infrastructure once they sell a scooter for 20% revenue share.

Why Starsky Robotics Won't Use Lidar. Kartik Tiwari, CTO of Starsky discusses how LIDAR is less helpful when teleoperators are in the mix. "Lidar technology, applied to autonomous driving, is a good science project that gets in the way of engineering."

Amazon Selling Medical Supplies to Sick. "An app, developed by a separate company called Xealth Inc., enables doctors to choose which supplies to recommend, then email the list of products to a patient. The email directs the patient to a website with photos of recommended products, descriptions and links for purchasing on Amazon."

Spread Out Online Promotions a Boon for Supply Chains. Online promotions are starting earlier and lasting longer, providing some relief from one-day surges. DHL did note their NYC facility saw a 15% y/y increase in volumes between Black Friday and Cyber Monday.

Launch Time for Waymo. The 10-year old moonshot effort by Google is gearing up for their first self driving ride service in Phoenix. All eyes are on the safety and passenger experience of the the service β€” management is heavily managing expectations.

GM to Layoff 15,000 + Close 7 Facilities. While the socioeconomic outrage continues, the rationalization shows the increasing importance of EVs. It appears that many factories are building dated models with the inability to adjust production for newer trends and technologies.

FedEx Invests in 1,000 Electric Vehicles from Chanje. The news hit over the Thanksgiving holiday but increases the electric fleet by close to 33%. The new vehicles will be operated in California with 100 purchased directly with the remaining 900 leased via Ryder.

Conditions for Shippers Improve as Capacity Crunch Subsides. The FTR Shippers Conditions Index shows some signs of renewed balance in September.

Citigroup Research on the Future of Food & Agriculture. I bring your attention to discussions around waste, a call for more vertical integration across the food supply chain, digital ag, and machinery and equipment.

Strategic Developments, Fundraises, Mergers & Acquisitions

AWS Launches Deepracer and RoboMaker at Re:Invent. DeepRacer allows engineer to learn and understand reinforcement learning with a $399 car. Could it be a smart way to build and then sell basic autonomy stack? RoboMaker is a centralized environment to build, test, and deploy robots with the cloud.

Easyship Raises $4M Series A. Easyship seeks to make international shipping for eCommerce as simple as Stripe makes international payment

Shipping Container Optimization Startup Blue Cargo Raises $3M Seed. The round was led by 1984 Ventures with participation from Greenbay Ventures, Sound Ventures, Kima Ventures, and others.

Event Mobility Startup, Rally Raises $5M Seed. The round was led by Daimler Buses who will work closely with Rally to develop hardware and software for the on-demand bus market.

XPO Partners with Google Maps for Last Mile Visibility. A user can track a shipment by entering the phrase β€œXPO Package Tracking” and then typing in the shipment number from any device.

Syrius Robotics and JD Logistics Co-Develop Warehouse Robotics. The AGVs will be available starting May 2019 for $14,100 with an initial production run of 100.

Cruise Appoints Dan Ammann as CEO, Kyle Vogt now CTO. Ammann comes with the experience of managing large companies (Cruise is 1,000 employees today) as well as taking GM public after the government bailout. Is a GM Cruise public float in the works?

Company Building

The Future of Marketplaces. A must read for marketplace founders discussing the reinvention of the service economy using marketplace models.

The Seed Funding Market is Less Crowded Than You Think. A very insightful read around the dynamics of the seed market. There are few instances where I can agree with everything in an article β€” this is one of those.

Selling Product While You Build It. Through an annual pre pay contract, customers will often pay a startup to build their product. It's an efficient way of financing product investment. The catch is that early stage founding teams must be able to sell and build simultaneously.

What We’re Listening To 🎧

While we were quiet on the podcast front this past week, it's worth listening to Episode 4 and Episode 5 of The Future of Supply Chain Podcast. I spent Episode 4 chatting with Erik Nieves of Plus One Robotics about the basics of industrial automation. Episode 5, I discuss clinical trial supply chains with Rust Felix of Slope.

Who's Hiring? πŸ‘©β€πŸ’»

Senior System Integration Engineering (Mechanical) at PlusOne Robotics in San Antonio, TX.

NLP Engineer at Vector AI in London.

Operations Specialist at Stord in Atlanta, GA.

Check out other jobs at Dynamo portfolio companies.

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