Dynamo Dispatch (05/18/20)

Issue 107 | Vector AI, DispatchTrack, Shiprocket

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

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

Weekly Commentary 💭

If you’re looking to catch up on the Future of Supply Chain, I highly encourage you to check out the last couple episodes with Paul Noble of Verusen and Aaron Meredith of Georgia Pacific/Point A discussing startup/corporate engagement as well as Lance Theobald of SecurSpace chatting truck and trailer parks.

Stay safe out there!

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 📦

Americans Keep Clicking to Buy, Minting New Online Shopping Winners. Following shelter-in-place orders in March,  e-commerce penetration across the US has grown as much in 8 Weeks as It Had during the Past 10 Years. While some of this demand might just be driven by temporary changes to consumer habits, the major growth of grocery and food delivery suggests that both sectors are likely to emerge with significantly higher online sales post-pandemic. Echoing this sentiment, the Wall Street Journal anticipates Coronavirus Finishes the Retail Reckoning That Amazon Started.

COVID-19 Changed the Stakes for e-Commerce. Do Fulfillment Networks Need to Change Too? While previously a thorn in the side of many brick and mortar retailers, e-commerce today “is now an essential insurance policy — a way to keep sales from stopping entirely,” writes Emma Cosgrove at Supply Chain Drive. Just as coronavirus has spurred companies to embrace digital sales channels, the present risk posed by contagion to centralized fulfillment networks is forcing operational leaders to embrace on-demand warehousing to support their shift to distributed fulfillment configurations. 

Covering methods to make operations more robust and increase expense visibility, McKinsey looks ahead at the future of work in Jump-Starting Resilient and Reimagined Operations.

📊 Magic Quadrant for Multi Enterprise Supply Chain Business Networks. Given the exigence of end-to-end process planning and cross-team coordination, multi enterprise supply chain business networks (MESCBNs) are an essential technology enabling digitally mature companies to reduce cost and capitalize on opportunities. Offering connectivity and collaboration that exceeds the single-company focus of a standard ERP, MESCBN leaders include Infor and E2open whom Gartner appraises alongside challengers like IBM and OpenText in its comprehensive assessment of industry players. Meanwhile, 34% of financial leaders polled by PwC have automation top-of-mind as Key to Supply Chain Agility Post Pandemic. Also, in autonomy: Delivery Robot Operators Are Also Working From Home.

Uber Approaches Grubhub with Takeover Offer. Deliberations are ongoing for a possible consolidation that could account for as much as 55% of the food delivery market. While likely to draw antitrust scrutiny, the acquisition could also reduce cash burn for the Uber Eats unit, which has remained largely unprofitable amidst steep competition from leading rival DoorDash. Despite much of America being stuck at home, Food-Delivery Companies Still Struggle to Profit. Meanwhile, New York City Moves to Limit Fees from Meal-Delivery Apps

How VR, IoT, AI, and Big Data Power UPS's Digital Transformation. From the use of virtual reality for training to big data Network Planning Tools (NPTs), just a short visit to UPS Worldport in Louisville reveals the heavy tech investments at the world's largest automated sorting facility. As Bala Ganesh, Vice President of the Advanced Technology Group, observes, "Some of the new technology will work, and some won't, but we're putting our chips on the table and starting to see some returns." For related insight into 3PL’s innovation outlook, listen to FedEx CEO Frederick W. Smith Talking Business, the Economy and COVID-19

Maersk: Container Volumes Could Fall 25%. Despite grim predictions for Q2 container volumes, Maersk feels well-positioned to weather the fallout of coronavirus. Having already blanked more than 90 sailings in Q1 to reduce variable costs, the Danish shipping giant plans to continue reducing capacity as necessary. Nevertheless, year-over-year shipping revenues have been up 3% through the pandemic. In other news for the company, Maersk Launches Its First Rail Service from China to Turkey. Meanwhile, rival CMA CGM Secures $1.14B Loan and State Guarantee.

Apple Supplier Responsibility 2020 Progress Report. From its base in California, the technology giant oversees a globe-spanning supply chain throughout which the iPhone maker has sought to add face masks, health screenings, and deep cleaning protocols. “Our teams have also partnered with suppliers to redesign and reconfigure factory floor plans where needed and to implement flexible working hours — including staggered work shifts — to maximize interpersonal space,” writes Sabih Khan, senior vice president of operations.

Mobility 🚗

Elon Musk Wins Battle with Alameda County: Tesla Factory Allowed to Reopen. Following threats last week by Musk that he would move Tesla production out of California, local officials have reached a detente with the billionaire founder. The Alameda County Health Department has affirmed that operations at the Fremont plant could resume as early as next week so long as Tesla can safely ensure social distancing among its workers. Related, A Look at Tesla's Neural Net Training Techniques while Voyage Partners with Fiat on AV Vans.

US Automakers Set to Reopen Amid Virus, Mexico Hurdles. Plexiglass dividers, temperature checks, and face shields are but a few of the safety protocols that Detroit automakers are following as they prepare for plants to reopen on Monday. However, concerns abound on both sides of the border as economic and health officials send mixed signals about the “essential” nature of car manufacturing. With the industry already in flux when the pandemic hit, The Loadstar predicts Automotive Supply Chains Face a Long Road to Recovery as Production Restarts.

China Auto Sales Snap Long Falling Streak, but Growth May Be Short-Lived, China’s auto market in April grew 4.4% over the previous year, snapping 21 consecutive months of declines. The good news, however, is likely short-lived as the April numbers reveal that sales of passenger-cars declined 2.6% versus commercial vehicles rising 32%, suggesting the boost comes more from government stimulus than consumer demand. Looking at the US, AutoNation CEO argues there is 'No Turning Back' From Online Car Sales.

Archrivals Uber and Lyft Must Join Forces to Survive. With ridership falling almost 70% and regulators placing even more scrutiny on the two ride hail companies, Byrne Hobart argues that Uber and Lyft should pursue a comfortable duopoly akin to Coca-Cola and Pepsi or Kellogg and General Mills. By emphasizing profitable equilibrium in place of cut-throat competition, the two companies together can ensure their survival through the coronavirus and impending court cases. Meanwhile, the two companies have announced New Safety Requirements For Drivers

Cities Are Transforming as Electric Bike Sales Skyrocket. From Seattle to New York, cycling rates are up 5% nationwide since the onset of the pandemic. As more cities experiment with road closures to allow social distancing, it is likely that the American urban environment could witness a permanent shift towards more pedestrian-friendly policies after quarantine. The Atlantic welcomes this future in advocating Don’t Close Parks. Open Up Streets. Also, see Sidewalk Widths NYC for a neat visualization of just how much space New Yorkers are typically confined to. 

Boeing Orders Slip Below 5,000 on MAX Cancellations. For the first time in seven years, the order book of the jetliner has dropped below 5,000 as more than one hundred orders of the manufacturer’s 737 MAX jets have been canceled. Acknowledging the near term hardship, Chief Executive David Calhoun does not anticipate passenger traffic reaching 25% of pre-COVID levels until September at earliest. However, by appointing its vice president of digital transformation Mike Delaney to lead its ‘Confident Travel Initiative,’ Boeing Has a Plan to Get People Back on Planes. 

By the End of May, Most World Airlines Will Be Bankrupt. Sounding the alarm on behalf of airlines, the CAPA Centre for Aviation calls for coordinated government and industry action to avert catastrophe. Advocating for a new global safety regime, the Centre argues that intergovernmental coordination is necessary to prevent protectionist government responses and to reconsider regulations like cabotage that could make airlines more robust post-pandemic. A quick primer for the worst-case scenario: What Happens To Your Miles When An Airline Declares Bankruptcy.

Fundraises, M&A, Talent 💸

💥 Vector Raises Seed Round. Based in London, Dynamo portfolio company, Vector has developed a platform powered by computer vision to convert supply chain and financial documents into a “digital fabric” that can be leveraged throughout international trade workflows. The round was led by Episode 1.

Intello Lab Raises $5.9M Series A Led by Saama Capital. Leveraging computer vision and artificial intelligence, the Indian startup helps standardize quality assessment within agricultural supply chains. The new funding will be used to accelerate growth across Asia Pacific and the US. 

Shiprocket Raises $13M Series C Led by Tribe Capital. The New Delhi-based startup serves as a logistics aggregator for the nation’s growing direct-to-consumer brands. The company, which said it was profitable for the financial year that ended 31 March 2019, plans to use the new capital to help drive its overseas expansion. 

VanMoof Raises $13.5M in Round Led by Balderton Capital and SINBON Electronics. Started in 2009, the Dutch e-bike startup has received its fresh capital injection just as many cities around the world have been doubling down on cycling infrastructure. The funds will support international expansion following the launch of the new electric VanMoof S3 and X3 bikes.

Wallbox Completes Second Tranche Of $25M Series A. The Spanish startup manufactures electric car chargers for personal residences. Leading the round was Seaya Ventures with additional investment from Endeavor Catalyst and existing investors such as Iberdrola.

DispatchTrack Secures $144M Growth Investment Led by Spectrum Equity. Based in San Jose, the last mile technology companies offers a platform for self-scheduling, dynamic route optimization, and delivery performance analysis. Accepting outside funding for the first time in the company’s ten year history, DispatchTrack plans to use the investment to support innovation and expansion. 

Waymo Raises an Additional $750M. Following the $2.25M that the Alphabet subsidiary raised in March, Waymo announced this week it had padded its war chest even further as it raises to deploy its autonomous vehicle technology. Investors this time included Perry Creek Capital and units of T. Rowe Price and Fidelity Investments

Company Building 🛠️

Hiring 10x Execs. “I want you to intimately know my strengths and weaknesses, and I want to know yours as well. I will share my last 360 review with you so we can discuss it on our next chat, and I’d like you to share yours with me. I know it won’t be perfect and some parts may be unfair. I’m just looking for you to walk me through it so we can discuss.”

Importance of GtM Innovation from CEO of Hashicorp. So often we see founders focus acutely on a great product but neglect the go to market. It’s important to build both in concert and understand the deep relationship between what one is building and how they need to sell it.

Invest Like the Best: Tobi Lutke on Building a Modern Business. In our humble opinion, Lutke is artfully building Shopify into a viable Amazon competitor while developing key capabilities around the eComm supply chain (ex: 6 River). This is worth the entire listen with special attention to his thoughts on quality, being without process, and scaling.

Who's Hiring? 👩‍💻

Product Manager at Vector AI in London, UK.

Digital Marketing Intern at SVT Robotics in Norfolk, VA.

Software Engineer at Stord in Atlanta, GA.

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.

Dynamo Dispatch (05/11/20)

Issue 106 | nextmv, SVT Robotics, Ninja Van

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

💥 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.

Weekly Commentary 💭

We have spent the last couple of months brainstorming ways to elevate the ecosystem despite the headwinds from COVID-19. We ended up settling on the concept of a bi-quarterly webinar series called, Corporate Camp. This is a shippers only, virtual series to discuss relevant topics as it pertains to supply chain, technology, and innovation. Each session will be 45 minutes over a lunch hour and considered a safe space among like-minded people. If you are a shipper and want an invite to our first event in late May, send Santosh an email at santosh@dynamo.vc - there are limited spots to ensure it’s approachable and conducive to conversation.

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 📦

3D Printing Finally Found Its Market, and All It Took Was a Pandemic. The recent demand spike for medical equipment has helped reveal the opportunities and obstacles for 3D printing to fill supply chain gaps. While HP and others have leveraged the technology to make thousands of masks, face shields, and ventilator parts, 3D printing has yet to achieve the price and output of such items to compete head to head with traditional manufacturing techniques post-crisis. Meanwhile, large manufacturers might consider that Wearables Could Be Key for Worker Safety as Warehouses Eager to Reopen. 

Sourcing PPE Dominates Air Capacity, but More Lift Is on the Way. Spurred by governments looking to secure PPE at almost any cost, spot rates out of China have reached as much as $18/kg. However, charter rates appear to have plateaued as additional passenger planes have been converted for cargo missions. Also seeing increased shipments of medical equipment, freight forwarder Expeditors Remains Bullish Despite Volume Decline, and Still Fully Staffed Despite Crisis.

Gatik Responds to Online Grocery Demand, Adding Autonomous Reefers for Walmart, Retailers. Dynamo portfolio company Gatik has announced this week it will add more than 10 temperature-controlled box trucks to its self-driving middle mile fleet. Working with Walmart and other retailers, Gatik has supported the increased throughput rates of refrigerated, frozen, and fresh groceries on fixed routes between stores and micro-fulfillment centers.

America’s Meat Shortage Is More Serious Than Your Missing Hamburgers. It’s no joke asking “Where’s the beef?” when Meatpacking Plant Shutdowns Lead to Hamburger Shortages at Hundreds of Wendy's. As Recode explains, the top four beef processors account for more than 80% of the heifer slaughter. With COVID outbreaks shutting down processing sites, the entire meat supply chain from farmers to restaurants could be thrown into turmoil as bottlenecks lead to worsening animal conditions and spoiled food. 

North American Rail Volumes Could Dip in the Double Digits. In the latest report from Moody’s Investor Service, 2020 North American rail volumes are projected to fall by as much as 15% from the previous year.  Significant declines in coal traffic and automotive volume account for the uncertain projection through the end of the year. To see how operators are already being impacted: BNSF Railway Cutting Hundreds of Jobs, Closing Some Facilities.

🌟Amazon Quietly Rolled Out Its 'Uber for Trucking' Service to 48 States. Aiming for a bigger slice of the digital freight brokerage pie, the retailing giant expanded its service in March to cover the continental US without any public announcement. Given the billions of Amazon packages that cross the country, the move into brokerage provides natural synergies with its e-commerce business as it looks to challenge incumbents like CH Robinson and XPO Logistics. Meanwhile, Uber Freight Has Moved Tens of Thousands of Touchless Loads but Posts Loss in Q1

Some Shipping Lines May Not Survive Downturn, Hapag-Lloyd Chief Says. Rolf Habben Jansen, chief executive of Germany’s biggest shipping company, has warned that some shipping companies will likely go under if the global trade downturn continues through 2021. “We are looking at a difficult second and third quarter. If a recovery starts in the third quarter, all the top 10 liners will be standing at the end of the year. If it’s going to take longer, then it may become more difficult for some” to survive, he said. 

COVID-19 Brings Opportunities for Cloud-Based Software Solutions. As businesses reassess their operations amidst the coronavirus, Dynamo partner Santosh Sankar argues that the current crisis could catalyze the adoption of cloud-based SaaS solutions within international logistics. Offering interoperability with legacy systems and cost savings of 30 percent or more, such investments in technology not only improve efficiency today but are likely to set the course for long term success over the coming decade. Also looking ahead, Andreessen Horowitz weighs in on the opportunity for job platforms post-crisis in COVID-19 and the Great Rehiring

Mobility 🚗

Self-Driving Unicorn Zoox Shops For A Buyer. The six-year-old company had raised more than $1B in venture funding on the premise that custom-built vehicles would ultimately outperform the design constraints of legacy manufacturers. In today’s market uncertain about the future of mobility, the autonomous vehicle startup has instead offered itself up for sale with OEMs or logistics giants like Amazon and JD seen as potential purchasers. For a peek into its competitor Argo, check out The Relentless Startup Fast-Tracking Ford’s Self-Driving Cars

Auto Sales Crashed In April But There Are Reasons For Optimism. Barring an unexpected nosedive, experts believe that used-cars sales have already bottomed out during the four week stretch between mid-March and mid-April when shelter-in-place orders went into effect. After initial estimates that sales would drop more than 70% for April, it appears the actual decline will be closer to 40%. Anticipating that demand for cars could rise to 80% of pre-pandemic levels by the end of May, ad agencies are also bullish that U.S. Demand for Cars to Rebound while Travel, Dining Lag

Researchers Close to Enabling Electric Cars to Recharge Themselves Wirelessly. In a recently published article, a team of Stanford engineers has demonstrated a practical way to wirelessly recharge robots and moving cars in the span of milliseconds. At scale, the advancement in wireless-transmission technology could refuel an electric vehicle with hundreds of kilowatts even at speeds of 70 mph by simply driving across a four-foot charging zone. 

🌟Why Empty Planes Keep Flying Through the Pandemic. Despite grounding three-quarters of their fleet, airlines like American have seen more than 99% of their flights at less than 20% capacity. The Wall Street Journal breaks down the major reasons these passenger flights still take to the skies, ranging from the essential transport of medical personnel to the operational intricacies of connecting flights. Domestic carriers are not alone in facing difficulty; across the pond, Crisis Costing Lufthansa €1M an Hour – 'Bitter Decisions' Ahead, Warns CEO.

Volvo to Sell LIDAR-Equipped Self-Driving Cars to Customers by 2022. Given the $75K price tag of most LIDAR systems, few automakers have considered putting the laser sensors into commercial vehicles. Volvo, however, is leveraging its investment in the LIDAR startup Luminar, which claims to have reduced the cost to just $1K per unit, to enable autonomous highway driving in its vehicles by 2022. In a related thought piece, McKinsey assesses The Impact of COVID-19 on Future Mobility Solutions, anticipating the near-term suspension of autonomous vehicle testing but OEMs doubling down on AV investment by 2025. 

UK Launches £250M Active Travel Fund to Promote Cycling and Walking. Announced on Saturday, the UK will support pop-up bike lanes, wider pavements, and bus-only corridors with its emergency active travel fund. Additionally, new regulations will trial the use of electric scooters in four  Future Transport Zones as the government studies their impact on public space. As the Financial Times points out, sustained private-public cooperation will be necessary as Retro Charm of Two Wheels May Not Save e-Bikes and Scooters. Also in e-scooter news: Scooter App Report: April 2020

California Sues Uber and Lyft, Saying Drivers are Employees. In its lawsuit brought Tuesday by State Attorney General Xavier Becerra, California has alleged the two ride hailing companies have illegally deprived their drivers of adequate worker protections by labeling them, independent contractors. The suit throws the gauntlet in what will likely be an extended battle between lawmakers and gig employers following the state’s enactment of Assembly Bill 5, which established stricter standards for classifying independent contractors as of 1 January. The court drama only amplifies the turmoil facing Uber and Lyft in the wake of coronavirus who along with other Shared Mobility Companies Take a U-turn to Stay on the Road.

IoT to Track Urban Mobility Changes During Pandemic. Despite government sponsorship of its contact-tracing app COVIDSafe, only 4 million Australians have downloaded the tool - approximately 16% of the population and far short of the 40% deemed necessary for it to be effective. Complementing that effort, researchers at the University of Wollongong have partnered with Meshed IoT to apply wi-fi sensing technology across transport hubs and public spaces in the country to assess urban mobility and identify transit patterns leading to infection. Also fighting COVID through data collection, Here's How the Commercial Drone Industry Can Prove Itself During the Pandemic.

Fundraises, M&A, Talent 💸

💥nextmv Raises $2.7M Seed. The latest addition to the Dynamo family, nextmv has developed a real-time, end-to-end decision automation platform that helps software engineers build and maintain complex simulation environments. Also participating in the round were FirstMark Capital, XFactor, Atypical, and 2048.

💥SVT Robotics Raises $3.5M Seed Led by Cowboy Ventures. Virginia-based SVT Robotics, a Dynamo portfolio company, utilizes machine learning for self-optimization to accelerate and simplify deployment of industrial robotics. With the investment, the startup will expand product development for its robotic Integration Platform as a Service.

BasicBlock Raises $1.5M Seed Led by Emergent Ventures. The startup provides a workflow solution enabling faster payments to truck drivers. With social distancing top of mind during the COVID crisis, BasicBlock plans to use the new funds to fuel its contact-less business solution for the trucking industry’s payment space. 

Strella Biotechnology Raises $3.3M Seed Led by Yamaha Motor Ventures and Laboratory Silicon Valley. The Philadelphia-based company has developed biosensor technology and IoT capabilities to detect the ripeness of produce as it travels through the supply chain. With the fresh injection, the team plans to expand and prepare its entrance into the retail sector.

VNDLY Raises $8.5M Series B Led by Madrona Venture Group. The Cincinnati-based company has developed a cloud-based vendor management platform that streamlines the talent sourcing and acquisition process. The fresh funds will help further product development and global expansion. 

KlearNow Raises $16M Series A Led by GreatPoint Ventures. Based in Silicon Valley, KlearNow optimizes customs clearance and document management. With the new investment, the company plans to expand its geographic footprint and further develop its platform. 

Covariant Raises $40M Series B Led by Index Ventures. The Berkeley-based startup builds universal artificial intelligence for autonomous robots. The fresh funds will support further research and development and product commercialization. 

Kurly Takes $160M In Series E Led by DST Global. South Korean grocery delivery startup plans to use the funding for hiring and opening a new fulfillment center near Seoul. Also participating in the round were Hillhouse Capital, Sequoia Capital China, Fuse Venture Partners, SK Networks, Translink Capital, and Aspex Management. 

Uber Leads $170M Investment in Lime. In the same week that Uber Lays Off 14% of Its Workforce, the ride hailing company has announced its investment in Lime. According to The Information’s initial report, Lime’s valuation has decreased 79% to $510 million with this round. Meanwhile the deal will see Lime acquire Uber’s micromobility subsidiary Jump.

Chehaoduo Raises $200M Series D+ from SoftBank Investment Advisers and Sequoia Capital China. The Chinese online car trading platform extends its $1.5B round of financing from February 2019. Founded in September 2015 as “Guazi.com,” the startup has expanded beyond its used car trading roots to also provide a new car marketplace and post-sales automobile services.

Ninja Van Raises $279M Series D Led by GeoPost. Operating across six countries in Southeast Asia, the last mile logistics company plans to use its investment to become “solidly profitable” in all markets. Other investors in the round include Grab, B Capital, and Monk’s Hill Ventures. 

Sidewalk Infrastructure Partnership Raises $400M Series A from Alphabet and the Ontario Teachers Pension Plan. A spin-off from Alphabet’s Sidewalk Labs, the new holding company will focus on long-term projects to upgrade cities’ infrastructure. To start, the group is tackling the plastics problem with a planned recycling plant incorporating robotic arms and artificial intelligence to support the circular economy. Also this week, Sidewalk Labs Abruptly Abandons Toronto Smart City Project.

Target to Acquire Same-Day Delivery Tech from Deliv. News of the purchase comes just one day after reports that same-day delivery startup would begin winding down operations. Characterized as an R&D acquisition, the deal (whose value is yet undisclosed) follows Target’s purchase of same-day service Shipt for $550M in 2017. 

Company Building 🛠️

The Recession Planning Framework for SaaS Startups. Courtesy of OpenView, this framework is worth reviewing as we calibrate/recalibrate to navigate the current economic climate.

A Virtual Events Crash Course. We ourselves are in the midst of launching a virtual event series like many of our portfolio companies. This is a great primer for all companies as they leverage tools like Zoom to recreate in-person efforts.

The Fundraising Market Has Changed. True to form, Tomasz Tunguz at Redpoint Ventures takes a data-driven approach to March fundraising data in light of the coronavirus recession. Interestingly, Seed and Series A have seen a faster decline in activity than later stage rounds. It’s important to note here that not all rounds are closed prior to being announced - we suspect much of the activity that’s been announced closed prior to the slowdown.

Who's Hiring? 👩‍💻

Customer Success Lead at Backbone in New York, NY.

Pre-Sales Automation Technician at Plus One Robotics in San Antonio, TX.

Head of Systems and Safety at Gatik in Palo Alto, CA.

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.

Dynamo Dispatch (05/04/20)

Issue 105 | Otonomo, Amply Power, Deliverect

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

💥 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.

Weekly Commentary 💭

We continue to navigate the currents created by COVID-19 across both supply chain and mobility. Earnings season is in full swing so we get a sampling (albeit likely only a one-quarter) of the impact the virus has had on publically-traded companies. Consider UPS has slashed $1B of planned capex as the last mile network is under on-going profitability pressure, Amazon plans to reinvest any profits despite pressures on profitability (hat tip to Shopify’s new Shop app), while Buffet sold all airline holdings and sits on the sideline.

We expect to see demand pressures throughout Q2 and even into Q3 as the Us looks for a framework to return society back to some sense of a new normal. As a firm, we remain committed to investing in great teams building in large opportunity areas as we enter an era where supply chain technology sits at the forefront of conversations.

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 📦

📊 PwC’s COVID-19 CFO Pulse Survey. We continue to see supply chain emerge from COVID-19 as a focal point for organizations. “Findings show CFOs prioritizing specific actions: 56% cite developing alternate options for sourcing, and 54% say better understanding the financial and operational health of their suppliers.”

Index: Rail Volumes and Trucking Spot Rates May Have “Bottomed Out”. Covid-19 recovery indexes released this week by research firm FTR Transportation Intelligence suggest that both the trucking spot market and rail volumes are unlikely to slump further. “Once we start to see things picking up, the trajectory of the restart will help us better understand whether this is a ‘U-shaped’ recovery or a ‘V-shaped’ recovery. We expect transportation metrics to be a leading indicator of the broader economic conditions,” said FTR chairman and CEO Eric Starks. In other rail news, Railroads on Track to Meet PTC Deadline, GAO Reports

The Algorithms Big Companies Use to Manage Their Supply Chains Don’t Work During Pandemics. Drastic changes in the country’s transportation, production, and purchasing behavior under Covid-19 has led to unprecedented swings in the data informing big retailers’ forecasting models. Given the difficulty of refining their algorithms on the fly, many businesses are now relying on the expertise of human demand planners to inform their forecasting decisions through the crisis. It’s not just retailers who have been caught flat-footed by coronavirus, as the WSJ points out Miscalculation at Every Level Left US Unequipped to Fight Coronavirus. As such, MIT professor David Simchi-Levi makes a compelling case for why We Need a Stress Test for Critical Supply Chains.

The Pandemic Will Change American Retail Forever. The Atlantic’s Derek Thompson ponders the long term implications for retail and urban life amidst the threat of contagion. Among his predictions: the dominance of e-commerce over physical retail, the shift of in-person dining to cloud kitchen deliveries, and paradoxically the resurgence of cities as more white-collar workers relocate to suburbs giving small businesses an opportunity to reassert themselves in what Thompson calls a “renaissance of affordability.” Related: Consumers Trying New Retailers More Often; Spending Less on Non-Essentials.

China-Europe Freight Rail Service Hits Monthly Record High in April. Freight trips between China and Europe have grown 46% year-on-year with a record high 979 trips in April. Considered a valuable showcase of China’s Belt and Road Initiative, the trains have carried 262,000 standard-sized shipping containers (including 3,142 tons of personal protection equipment) between the two regions over the past four months.  Also tackling cross-continental shipments, Trucks Are Filling a 6,000 Mile Beijing-to-Berlin Supply Gap and Logistics Company Launches Private Airline for China Shuttle.

🌟Coronavirus Upheaval Triggers Corporate Search for Supply Chain Technology. Concerns over viral transmission are at last pushing legacy operators to upgrade their supply chain technology. Industry players have noted a spike not only in warehouse automation but also in systems reducing physical paperwork as companies look to streamline their operations while limiting person-to-person contact. Bullish on IoT and delivery robots, DHL weighs in Big Words vs Big Inventions: Which Tech Innovations Have Lived Up to Their Promise?

Manna Flies Medicine to Elderly in Ireland. Dynamo portfolio company, Manna is working with the Irish  Health authority to deliver medicines and other essential supplies to vulnerable people in the small rural town of Moneygall. Elsewhere, governments greenlight UPS to Fly Medications by Drone to Florida Retirement Community and UK Trials Medical Delivery Drones for COVID-19 Supply Runs. Also, check out the re-air of the Future of Supply Chain podcast with Zehra Akbar of Skygrid.

Spoiling Rice in Vietnam Show Perils of Food Protectionism. The struggle of rice exporters in Vietnam is emblematic of the policy changes faced by many private businesses throughout the global food supply chain. With traders uncertain about government adjustments to the national export quota, hundreds of thousands of tons of rice have piled up at the nation’s ports, being spoiled instead of sold. For a look at what’s happening stateside, The Counter offers An Explanation for Why Farms Have Dumped Produce They Can’t Sell.

Mobility 🚗

COVID-19’s Impact on Personal Auto Insurance. Although the majority of insurers have implemented premium relief programs in the wake of coronavirus, stark differences in refund size and timeline suggest a lack of consensus on how driving behavior has been impacted by COVID-19. Given that the relief packages offered so far are not proportional to the changes in personal driving, Dynamo portfolio company Mobikit recommends carriers make the switch usage-based insurance (UBI) to better quantify risk exposure and generate tailored rates over shorter intervals. 

Off Road, but Not Offline: How Simulation Helps Advance Waymo Driver. Despite suspending on-the-road operations, autonomous driving tech company Waymo is still conducting 20 million miles of simulated driving per day. Building on its data acquired through physical deployment, the company has been able to modify a given scenario in simulation and amplify its learning through synthetic scenarios that have yet to be encountered in the real world. In related research, engineers at UC Berkeley explain The Ingredients of Real World Robotic Reinforcement Learning.

🌟Are Electric Vehicles Doomed? While Covid-19 might have dampened EV sales for the coming year, Ars Technica argues against short-sighted pessimism: “expectations have simply outpaced tremendous progress.” Among the trends that make them bullish are the upcoming release of electric SUVs and crossovers better suited for consumer tastes, advancements in the electrification of heavy duty vehicles, and the shifting headwinds in Washington that might push up the federal gas tax and encourage the purchase of EVs. In related news: SK Innovation to Spend $1.5B on Georgia Plants, as ‘Center’ of World EV Battery Industry

Automakers Outline Reopening Plans. Carmakers on opposite sides of the Atlantic have taken divergent paths as they consider when to restart production.  BMW, Audi, and Volkswagen have reopened their German plants, albeit at limited capacity. Toyota meanwhile has pushed back its North American restart date to 11 May. GM, Ford, and FCA meanwhile have not officially announced their return although it has been tentatively scheduled for 18 May. ICYMI, Tesla Earns $350M+ on Regulatory Credits from Other OEMs.

The Pandemic Pace: A Look at Congestion-Free Speeding and Its Risks. In the wake of coronavirus, personal car travel has declined nationally by 41%. Crashes, however, have not been dropping at the same rate as traffic. With much of America moving at “congestion-free” speeds, city planners are moving beyond theory-based predictions as they gather transit data and refine their models for the future of safe transportation.

New York City Subways Won’t Run 24 Hours a Day During Pandemic. Starting 6 May, the city that never sleeps will be giving its trains a rest. In an unprecedented move for the MTA, all 472 stations will close between 1AM and 5AM each day to allow for cleaning. Until further notice, the estimated 11,000 riders who use the trains between those hours will be offered alternative transportation via buses or for-hire vehicles. Speaking of cities, our friends at Toyota AI Ventures Extends Call for Connected City Innovations.

As Red Ink Begins to Flood Bottom Lines, the Mega-Airlines Begin to Unravel. The steep decline in international travel has shown to impact large hub-and-spoke airlines that rely on global alliances more severely than point-to-point operators like Southwest. Following a first quarter loss of €535M, British Airways announced this past week that it will likely cut 12,000 jobs, approximately one quarter of its workforce. With a ‘tsunami’ of airline job losses already beginning in Europe, some fear US Carriers Could Be Next. As job cuts rack up, analysts debate whether An $85 Billion Airline Rescue May Only Prolong the Pain

Fundraises, M&A, Talent 💸

Buymie Raises €2.2M Led by Act Venture Capital. The Irish grocery delivery startup is currently available to over 490,000 households across the Emerald Isle. The investment will help drive the company’s overseas expansion.

Amply Power Raises $13.2M Series A Led by Obvious Ventures. Based in Mountain View, the startup has developed a smart charger for electric vehicles. Amply plans to use the fresh capital to expand its team and customer deployments.

ForwardX Robotics Raises $15M Series B Led by China Merchants Capital. The Beijing-based autonomous robot platform initially built self-driven suitcases that used computer vision to track owners and avoid obstacles. The company has since pivoted to warehouse applications for its technology and plans to use its new funds to support production and international expansion.

Deliverect Raises €16.25M Series B Led by OMERS Ventures. Founded in 2018, the startup integrates third-party online ordering platforms including Uber Eats and Doordash into restaurants’ point-of-sale systems. Waiving set up fees since the outbreak of COVID-19, the Belgian startup aims to become the global gateway for online food ordering and delivery.

Material Bank Raises $28M Series B Led by Bain Capital. The three-year-old startup has developed a logistics platform for architects and designers to search and sample materials from hundreds of manufacturers. The new funds will help build a second logistics facility near its existing hub in Memphis and expand into new product categories.

Brain Corp. Raises $36M Series D Led by SoftBank Vision Fund 1. The San Diego-based startup has developed autonomous mobile robots for industry cleaning. With the new funding, the company looks to build out its machines’ shelf analytics and inventory delivery capabilities.

Otonomo Raises $46M Series C. Developers of a data exchange platform, Otonomo helps monetize data collected by smart cars, acting as a middleman between carmakers and third-party companies. The Israeli startup will dedicate the new capital to expansion and research and development.

Cheetah Raises $36M from Eclipse. Cheetah offers contactless delivery of food and related supplies. The company pivoted from B2B to B2C amid COVID-19 wiping out demand from its traditional restaurant markets. New funds will be used to support the pivot.

Nexar Raises $52M Series C Led by Corner Ventures. The five-year-old Israeli company has developed an AI dashcam application that uses deep learning to detect and help avoid driving hazards. Providing visibility into traffic congestion, the company has also positioned itself to support smart city initiatives through the aggregated data it collects from users.  

Inceptio Technology Raises $100M Series A Led by GLP. The China-based company builds autonomous heavy-duty trucks with the aim of developing a self-driving freight network by 2022. The business plans to use its latest investment to support commercial trials. 

Nio Secures $1B Investment from State-Owned Companies. Tesla’s Chinese rival, Nio designs and manufactures electric vehicles. Turning to state-owned entities from Anhui province, the cash-strapped company has given up a 24.1% stake in the company and promised to relocate its headquarters to the provincial capital Hefei.

Intel to Buy Smart Urban Transit Startup Moovit for $1B. Multiple sources report that the chip giant is in the final stages of acquisition for Moovit, the developer of a public transportation application that monitors traffic and offers transit recommendations to some 800 million people across the world. It is suggested that with the purchase Moovit will join Intel’s Israeli automotive hub, using its traffic data and intelligent routing to support autonomous vehicle development.

Uber’s CTO Thuan Pham Steps Down. Hired in 2013, Thuan Pham is the last holdover from the Travis Kalanick era to depart the ride hail giant. An American success story, Pham escaped Vietnam as a refugee at the age of twelve before arriving in the US where he studied at MIT and began his career in Silicon Valley.

Lyft to Lay Off 17% of Staff. The company announces it will pare down its workforce to 982 employees while furloughing an additional 288 in the aftermath of Covid-19. The move comes less than 24 hours after rival Uber announced its own plans to Lay Off 20% of Employees. Share prices of both companies rose in the wake of the announcements; however, the true reckoning will come in the week ahead as the two companies report earnings on May 6th and 7th respectively.

Company Building 🛠️

Growth Loops > Funnels. “The fastest-growing products are better represented as a system of loops, not funnels. Loops are closed systems where the inputs through some process generate more of an output that can be reinvested in the input. There are growth loops that serve different value creation including new users, returning users, defensibility, or efficiency.”

How to Build a Breakthrough. The Marvelous Maples introduces us to the concept of “backcasting” that he believes is helpful in creating breakthroughs. It allows visionary founders to start from their vision of the future and backcasting to the present to build their company. 

Mark Suster on the Current VC Market. Suster sits with Harry Stebbings to discuss the current state of VC across enterprise and consumer. His thoughts on Series A for enterprise startups certainly mirrors ours - “In a market where people aren’t just paid to “innovate” but will need to show real economic value, expect gains to come more slowly. Burn through your cash quickly at your peril.”

Who's Hiring? 👩‍💻

ML Engineer at Vector AI in London, UK.

Network Engineer at Gatik in Palo Alto, CA.

Front End Developer at SVT Robotics in Norfolk, VA (open to remote).

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.

Dynamo Dispatch (04/27/20)

Issue 104 | Schüttflix, Nuvocargo, SparkCharge

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

💥 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.

Weekly Commentary 💭

Happy Monday! Over the last few weeks, we’ve published our perspectives about the Antifragility of Supply Chains and The Coming Build Up of Safety Stock. We’ve seen further data points and commentary from the supply chain supporting this perspective. On the former, Stifel and Princeton Research predict a ramp in technology spending by shippers while supply chains show signs of inventory build-up in light of reduced productivity.

Stay on top of our latest perspectives and research on our blog.

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 📦

US Import Plunge Inevitable as Canceled Sailings Mount. Copenhagen-based Sea-Intelligence reports more than 7 million twenty-foot equivalent units (TEU) of container capacity to Europe and the U.S has been blanked as carriers adjust capacity to reduced COVID demand. Carriers so far have kept prices steady, ensuring all remain solvent for the time being;. However, the future appears ominous as Global Container Shipments Set to Fall 30% in Next Few Months. Meanwhile across the pond, there’s fears the UK Could Run Out of Warehouse Space in Two Weeks as Imports Pile Up

📊 Chain Reaction: Leadership Perspectives from the World’s Top Supply Chain Executives. From their survey of 235 chief supply chain officers across 23 countries, Egon Zehnder finds that developing talent ranks just as highly as improving the efficiency of the supply chain at their organizations. From the feedback compiled, the advisory firm recommends that supply chain leaders put culture first, build a collaborative organization, and invest in executive development. 

New product radar: FourKites Launches Sustainability Dashboard, UPS Partners with Softeon on WES, and p44 Upgrades Network Management Center.

US Intermodal Sector Braces for Lasting Pain as Traffic Numbers Plumb New Depths. Traffic numbers from the Association of American Railroads (AAR) show intermodal volumes at the end of March falling 15% to Great Recession levels. With car loads and coal loads already sagging, ports look to offer little relief with US-bound ocean shipments also down 10.1%. In rail, Many Freight Locomotives No Longer Needed while America’s Small Truckers See Demand Plummet.

Logistics Technology Provider Survey.Conducting its annual survey of logistics technology providers, Inbound Logistics finds that cost reduction, visibility, and transport optimization are the three most critical challenges reported to be facing customers. Offered by 53% of respondents, supplier management was the most popular supply chain solution while predictive analytics jumped more than 20 percentage points over the previous year to reach third in the rankings (47%); both indicative of COVID’s impact on logistics businesses. Also, Survey: 42% of Shipping and Freight Professionals want to Change Their Supply Chain Strategies Post COVID-19

COVID-19 Fast-Tracks North Carolina Zipline, Matternet, Flytrex Drone Deliveries. Spurred by necessity in the face of coronavirus, the North Carolina Department of Transportation announces three new drone delivery projects to support medical facilities and social distancing through the pandemic. Zipline and Matternet drones will take to the skies of Charlotte and Raleigh respectively to support deliveries of PPE and medical supplies; meanwhile, Flytrex will make food deliveries throughout the neighborhoods of the smaller town of Holly Springs. Related, the FAA has granted The First COVID UAV Waiver for a Texas oil and gas operation.

IHS: Commercial Vehicle Production to Drop 20%. Citing plant closures and falling freight demand, IHS anticipates a slump in the commercial vehicle market coinciding with a global 3% decline in GDP this year. The research firm predictions amount to a 198,000 drop in production for Classes 4-8 trucks from its previous North American forecasts. Elsewhere there have been novel stimulus ideas for commercial fleets: Vox makes the case to Electrify USPS Mail Trucks

Mobility 🚗

The Subway Is Probably Not Why New York Is a Disaster Zone. Responding to a recent paper by MIT health economist Jeffrey Harris, Alon Levy of Pedestrian Observations combats the claim that The Subways Seeded the Massive Coronavirus Epidemic in New York City. Levy acknowledges that Manhattan had a larger reduction in subway ridership than the other boroughs and also a slower infection rate; however, he posits a range of confounding factors that mitigate causation. Among his most compelling assertions are that residents of Manhattan more than any other borough fled the city to shelter in place elsewhere and that as the New Yorkers with highest income on average, Manhattanites are the most likely to work from home thus making them the least liable to contract the virus through the workplace and not just through public transit.

📊A New World for Airports. In a presentation released this month, Bain warns the airline industry, “Traffic recovery will not be a V-shaped bounce back: it will be long and painful.” Key points of the crisis game plan the consulting group puts forward include establishing a dedicated business unit to track all coronavirus updates, prioritizing safety, designing a set of 2-3 year scenarios that separate 2020 from beyond, and prioritizing cash by drawing down on all existing credit lines and immediately engaging in renegotiations with OEMs and strategic suppliers. For a design firm’s take on the future of air travel, check out Aeroplane Seats Could Be Fitted with Glass Hoods to Separate Passengers

The Evolution of Parking Lots in the Face of COVID. According to SpotHero, demand for parking is down 90% since mid-March.  Along with Curbstand and AirGarage, a new crop of parking startups are seeking to re-envision how America uses its lots, where there are 3 non-residential parking spots for every car. Pivoting during the COVID outbreak, these startups have helped repurpose lots for drive-in movies, pop-up grocery stores, and even doctor consultations. Also, How Car Design is Changing at Jaguar Land Rover due to COVID.

Bird’s Big Workplace Problems. 406 out of Bird’s 1,400 global employees lost their jobs March 27th over a two-minute Zoom webinar. The Verge’s Julia Black speaks with 16 former employees who paint the picture of a workplace culture so fixated on growth that the micro-mobility company overlooked the churn of its own ‘BirdFam.’  In New Zealand, Bicycles Are the New Toilet Paper.

📊Consolidated Coronavirus Maps and Dashboards Made by Tech Giants. Powered by data from millions of users, Apple and Google have leveraged their anonymized insights to support contact-tracing in the fight against COVID-19. Business Insider has aggregated their dashboards along with Facebook’s to show decline in movements not only across countries but even across establishments types. (For most cities, the only decline greater than retail outlets has been public transit.) For the source material itself, see Google’s Community Mobility Reports and Apple’s Mobility Trends.

GM Shuts Down Car-Sharing Service Maven. Initially launched in 2016 as a competitor to Zipcar, Maven had altered course in 2018 to allow car owners to share their vehicles on the service as well. However, in an email to customers sent on Tuesday, the company has announced, “After critically looking at our business, the industry, and what’s going on with COVID-19, we have made the tough but necessary decision to wind down our business.” Elsewhere in ride-hailing, Uber launches new delivery services as demand for ride-hailing plummets

The Race For The Electric Car. With battery prices decreasing more than 80% since 2010, car owners increasingly have economic as well as environmental and political incentives for purchasing an electric vehicle. While it is expected that 55% of all new car sales will be electric by 2040, consumer demand between now and then remains difficult to track with some analysts predicting a global over-supply of 14M electric vehicles by 2030. Beyond investments in battery tech and charging infrastructures, OEMs must also be mindful of their manufacturing strategies to ensure they can flexibly scale production to match demand. 

Fundraises, M&A, Talent 💸

Didi Raises $1B for Bike Rental Service Qingju. Incubated in-house, Qingju is ride-hail giant Didi Chuxing’s two-wheel bet on bike-share becoming a major growth driver. The raise kickstarts the company’s pursuit of its ‘188’ goals over the next three years: 100M daily trips, 800M MAUs, and 8% penetration rate in the mobility market.

Bain Capital Invests $50M in Merchants Fleet. Bain’s investment in the fleet management company comes as demand has spiked for the New Hampshire-based business which rents vehicles to companies for deliveries.  With the investment, Merchants Fleet expects AUMt to triple to $3B by 2024.

Parsyl Raises $15M Series A Led by GLP. The Denver-based company provides IoT cargo solutions for shippers to track goods as they move through the supply chain. Leveraging that visibility to help gauge and mitigate risk, the fresh injection will support the launch of Parsyl’s new suite of insurance products.

Gauzy Raises $10 Million in Series C Led by Hyundai. The Tel Aviv-based startup has developed high tech windshields that apply dynamic shading to adjust the light of car windows and even allow image broadcasting both inside and outside the vehicle. Eleven OEMs have already begun integrating Gauzy’s product in their models, with the first slated to reach mass production by 2021.

Schüttflix Raises €8 million Led by Speedinvest. The self-styled “Uber for the construction industry” provides a B2B marketplace for on demand delivery of construction goods. The new capital will be used to scale the company throughout Germany with plans to expand internationally in 2021.

Nuvocargo Raises $5.3M Seed Led Co-Led by NFX and ALLVP. Focusing on trade routes between Mexico and the US, Nuvocargo provides a managed marketplace that helps streamline the stakeholders involved in cross-border trucking. The company’s free software digitizes the extensive customs paperwork, offering visibility to customers through its centralized cloud-based dashboard.

SparkCharge Raises $3.3M Seed Led by PJC. Tackling the issue of range anxiety for EV drivers, SparkCharge has developed a portable, ultra-fast electric vehicle charger. The fresh investment will help accelerate growth as the company enters its first year of mass production.

MUVO Raises $2M Seed Led by Auteco Mobility. Raising amidst the country’s mandated quarantine, the Colombian micro-mobility startup has nonetheless secured fresh capital from electric vehicle company Auteco. The investment will add 500 new e-bikes to MUVO’s fleet in Medellin and Bogota. 

ampUp Receives Investment from Leading Automakers. While the round size is undisclosed, investors include SAIC Motor, Hyundai Motor Company, and Forest Ventures. The startup has developed a software platform that enables smart scheduling and dynamic access control for electric vehicle charging stations. 

Company Building 🛠️

Selling Multi-Million Dollars Products to Technical Customers. Recap of the NYETM from our friends at Work-Bench covering the sale of high-value, technical products to technical teams. One point that we find ourselves repeating is “While a self-service model may seem like an easy way to pull in technical customers right off the bat, it’s actually very difficult for early-stage startups to pull off successfully.”

The Remote Design Sprint Guide. In a softening sales environment, we’re seeing many portfolio companies double-down on product… don’t let WFH rain on the Spring parade. 

The New Rules of Growth vs. Profits. NFX offers a framework for startups of all stages to balance growth and profits. For seed stage startups, see Slide 8 and the reminder about finding product/market fit before ramping burn. 

Who's Hiring? 👩‍💻

Decision Analyst at nextmv in Philadelphia, PA (open to remote).

Front End Developer at SVT Robotics in Norfolk, VA.

Senior Project Manager at Skupos in Denver, CO.

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.

Dynamo Dispatch (04/20/20)

Issue 103 | FarEye, Previse, AI.Reverie

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

💥 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.

Weekly Commentary 💭

If you haven’t already, check out last week’s Future of Supply Chain podcast episode featuring Bruce Welty of Quiet 3PF and Locus Robotics fame. Also, we’ve been more actively writing in the face of COVID-19, check out our blog as well.

Lastly, we are looking for our next Venture Fellow. Please forward to college graduated in your network that is looking for a six-month dive into startups and venture capital.

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 📦

With Retailers Closed, Parcel Carriers Struggle with B2C Volume Surge. Already stretched due to staff shortages, couriers across the globe are implementing desperation measures to handle the present spike in residential deliveries. Tactics have differed by nation: in Switzerland the postal service has set daily volume caps for its 100 biggest customers; meanwhile, the French post’s attempt to limit deliveries to three days per week was quickly reversed by government decree. The surge though is not just in Europe. ICYMI, Amazon to Suspend Delivery Service That Competes With UPS, FedEx and US Postal Service Warns of $22B Hole From Coronavirus.

Real-Estate Firms Expect Coronavirus-Driven Shifts Will Spur Warehouse Demand. Industrial real-estate operators are betting that the current supply chain strain will convince their retail customers to readjust from their lean inventory strategies. As one industry leader observes, “There’s this move away from just-in-time [inventory], so the tenants are getting fatter.” For those interested in a deep dive on the topic, we break down the changing trends in inventory in our latest blog post The Coming Build Up of Safety Stock

Coronavirus Broke the Global Food Supply Chain. In the UK alone, McDonald’s sources food from 23,000 farmers across Great Britain and Ireland. Having closed all 1,270 of its UK restaurants last month, the impact on producers, processors, and packers is indicative of the catch 22 facing the entire food supply chain: whether to reduce production capacity and stymie food waste losses or to maintain contractual output in the hope of markets opening back up. Speaking of food, How Is COVID-19 Changing the Grocery Industry?. CBRE also predicts Coronavirus Will Increase Demand for Cold Storage Options.

Former Starsky Executive Discusses Role of Technology and People. Drawing on three decades of experience in the trucking industry, Paul Schlegel lays out the guiding principles behind Starsky Robotics. Emphasizing that operators’ feedback can accelerate the development of self-driving trucks, his recommendations include seeking win-win solutions to turn drivers into advocates for a safer trucking future and maintaining conservative cost per mile financial plans in order to provide a real business case for adoption. Related, AV trucking startup, Kodiak Robotics Downsizes by 20% while drone startup, Matternet Has Delivery Operations Grounded

Why America's $800B Trucking Industry Was Left Out of the $2T Stimulus Bill. As compared with just 99 airlines operating in America, the US has more than 200,000 trucking companies. Industry leaders posit that great degree of fragmentation coupled with the busy past months grappling with demand as the reason trucking companies did not mobilize a unified request to policy makers. However, the industry’s voice appears to be getting more representation as Trump Says Trucking CEOs to Help Advise on Economic Recovery

Digitization is Inevitable in Container Freight. “If there is one original sin of the industry, it’s a fundamental lack of integrity in freight contracts,” writes JoC’s Peter Tirschwell. As present limitations to in-person business accelerate adoption of digital technologies, Tirschwell expects for the increased visibility to make mutually enforceable contracts the new industry norm. Elsewhere in the product world, Convoy Adds Carrier Insights to TMS and KeepTruckin Automates Maintenance Reminders.

📊The Economy and Logistics Through the Lens of Data. In an wide-angle overview of recent freight trends, Flexport breaks down the results of its latest web-based polls and Greater China shipper survey. Key takeaways include that shippers believe supply shock to be over for now, although most forecast impending demand shock. Meanwhile a quarter of respondents anticipate their sales will decrease more than 30% in Q2 but become less pessimistic for the full fiscal year. Related: Grim prospects for box carriers as collapse of demand weakens balance sheets, FreightWaves Believes the Freight Market Is About to Turn Up

How Medical Supply Chains Can Diversify beyond COVID-19. Approximately 80% of all active pharmaceutical ingredients (API) come from abroad. To mitigate American exposure in future crises, Deborah Abrams Kaplan posits a three part plan for enhancing transparency,  increasing near-shore manufacturing, and leveraging AI capability to anticipate and identify shortages. Speaking of which, MIT’s Yossi Sheffi thinks government intervention will be required to Solve the Health-Care Equipment Supply Shortage

Mobility 🚗

How Bike Rental Companies Are Helping NHS Staff Get to Work and Avoid Public Transport. Buzzbike, Beryl Bike, and Brompton Bicycle Ltd are some among several UK-based rental companies now offering their bikes free of charge to National Health Service workers. With hundreds of bikes already being requested, other businesses are joining in the appreciative effort with one floral business electing to give away posies with every bicycle they help deliver. Meanwhile in the US, Oakland's 'Slow Streets' Help Encourage Biking and Walking.

Automakers Caution that Small Suppliers Require Assistance for A Return to Normalcy. While car manufacturers may have access to government loans and billion dollar credit lines, the network of smaller parts makers supporting them are in no position to take on large debt. On recent calls with Angela Merkel, automotive executives in Germany have warned that small suppliers must also be included in policymakers’ stimulus plans as replacing just a single supplier could delay the reopening of a major car plant for weeks.

The Devastated Travel Industry, by the Numbers. As of April 8th, North American airline capacity is down 72%, Europe 84%, and Asia 61%.Facing the worst travel depression since 9/11, the airline industry must recall that it took six years for the industry to turn profitable in the wake of those terrorist attacks, with cumulative net losses from 2001 to 2005 totaling $60.6 billion. For many, the current crisis could bode even worse. In contrast, German Carmakers to Resume Production as Lockdowns Ease andAs Other Carmakers Retrench, Volvo's Battery Lab Plugs Away.

‘Charger Desert’ in Big Cities Keeps Electric Cars from Mainstream. Problems abound for New Yorkers desiring electric vehicles but without access to private charging in personal garages. As is common in urban communities across the country, hurdles to EV ownership include distant charging stations and slow charging speeds. Despite recent efforts by startups to fill in these ‘charger deserts,’ some industry experts still argue that a Marshall Plan-type investment in infrastructure is necessary to spur the transition from gas-powered to electric vehicles.

Moovit Public Transit Index. Mobility-as-a-Service platform Moovit breaks down the impact of COVID-19 on public transportation ridership based on app usage before and after January 15th. Los Angeles, San Francisco, and New York have all witnessed declines of more than 70% while Philadelphia has fared the best among major American metros with a comparatively robust 58.8% decline in ridership. As for how mass transit systems can preserve through the downtown, a new report finds MTA Will Need Another $4-8 B in Fed Funding

Auto Accidents Drop by Nearly Half, According to Insurance Claims Data. With millions of cars parked across the nation due to quarantine restrictions, insurance-claims processor Snapsheet has observed a 40% to 50% decline in personal accident claims. Similarly, claims for commercial vehicles are down 30% to 40%. Related, How Insurers Decided on COVID-19 Refund Amounts.

"Rideshares for Kids" Pivot to Survive COVID-19. Since 2019 specialty rideshare startups HopSkipDrive, Zūm, and Kango have raised a collective $65M in venture capital. However, as school districts across the nation have announced closures through the fall, these companies that once specialized in bringing students to class are pivoting to bring school supplies and lunches to students now studying from home. It is not only the private sector that is readjusting its pickups: In the COVID-19 Era, the Wheels on the Bus Increasingly Bring Wi-Fi.

Coronavirus Exacerbates Debt-Laden Belt and Road Projects. Having accepted a $750M loan 6 years ago for highway construction, Montenegro joins a growing number of developing nations now facing massive debt and shifting exchange rates under China’s Belt and Road Initiative. With participating countries across Asia, Africa, and Europe putting up huge collateral for quasi-commercial loans, China stands to gain significant foreign assets if the economic fallout of coronavirus sees borrowing nations default as happened recently in Sri Lanka where China acquired the port of Hambantota.

Fundraises, M&A, Talent 💸

Kargo Technologies Raises $31M Series A Led by Tenaya Capital. The self-styled “Uber for logistics” platform matches Indonesian shippers directly with carriers, decreasing costs by cutting out middlemen. On the heels of its $7.6 million seed round, last year led by Sequoia India, Kargo’s latest raise makes it the most funded startup in Indonesia’s trucking space.

Choco Raises $30M From Coatue. The restaurant supplier plans to use the funds to continue building out its technology and customer base, as well as to adapt to the current market with more initiatives to help its customers stay in business across 17 global markets.

FarEye Raises $25M Series D Led by M12. Microsoft’s Corporate Venture Fund leads this latest raise for the cloud-based mobile workforce platform. FarEye plans to use the fresh capital to enhance its predictive abilities and fund expansion into new markets across Europe, Asia, and the US.

Previse Raises $11M Series B Led by Reefknot Investments and Mastercard. The London-based startup has developed a financial platform that leverages machine learning to predict which invoices can be paid immediately and thereby reduces payment timeframes for suppliers and contractors. Already Previse handles about 100K invoices per day and anticipates demand for its service will only increase as companies seek to unlock more working capital in the wake of the coronavirus outbreak.

Autofleet Raises $7.5M Series A Led by MizMaa Ventures. The fleet optimization startup offers APIs that apply artificial intelligence for optimal demand-supply matching, dynamic pricing, and automated de-fleeting. The majority of the new investment is slated for global expansion and research and development. 

AI.Reverie Raises $5.6M Led by Vulcan Capital. The computer vision startup helps smart city businesses train their machine learning algorithms and improve their artificial intelligence applications. The New York-based company plans to use the fresh injection for new hiring and product expansion.

LivingPackets Raises €5M via Crowdfunding Campaign. The Franco-German startup has developed an intelligent packaging system, THE BOX, which can be reused for delivery up to 1,000 times. Still, in pre-production, THE BOX is not only intended to reduce environmental impact but also to enable intelligent tracking and the ability to change the recipient’s address during delivery.

RISE Robotics Raises $3M Led by MIT’s The Engine. Developers of a linear actuator intended to replace hydraulic cylinder systems, the startup’s technology helps electrify the push-and-pull movements in heavy machinery that range from excavators to garbage trucks. The new funds will support the company’s work with a leading forklift manufacturer to accelerate the shift in its machinery from diesel to electric systems.

RaRa Delivery Raises $834K Seed Funding Led by 500 Startups. The Jakarta-based startup uses an asset-light operational model and AI-enabled routing technology to power its same-day delivery service. With the fresh funds, the company will look to hire new ops and commercial talent to lead its expansion across Indonesia.

Company Building 🛠️

🎧a16z Podcast: Moving to Remote Development. In the face of WFH and a ramp in remote work, the a16z team discusses the current technologies and practices that support organizational communication and alignment for distributed teams and development.

Pricing In A Time of Uncertainty. A couple of points stick out: 1) Resist heavy discounts and instead offer concessions around other terms - reduced pricing tends to follow into good economic times as well; 2) Consider usage-based pricing that helps stem churn if the customer feels like they aren’t using the product “enough.”

Advice From Recession-era Leaders. “Doing nothing is a decision. It’s the same as actively choosing to stay on the same path. And most founders don't realize that. If the winds are changing, a smart sailor will adjust their sails.”

Who's Hiring? 👩‍💻

Senior Decision Engineer at nevtmv in Philadelphia, PA (open to remote).

Software Engineer at SVT Robotics in Norfolk, VA.

Senior Full Stack Engineer at Backbone in New York, NY.

Check out other jobs at Dynamo portfolio companies.

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

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