Dynamo Dispatch (01/06/20)

Issue 90 | Shipfix, SkyWatch, Lixiang

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

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

Weekly Commentary 💭

Happy New Year! We're rolling into the new year and excited to continue our journey to find and support exceptional seed stage founders building supply chain or mobility businesses. Have a great week!

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 📦

National Returns Day Recap. For the seventh straight year, returns were up on the biggest day of returns of the year. UPS alone expects to ship 1.9M packages for a 26% jump over 2018. About 10% of goods sold in the US each year are returned to retailers, generating lost sales of nearly $1T. This all points to an ever-growing opportunity in reverse logistics. Related, Gen-Z Consumers Lead Rush to Return Gifts.

Mattel Simplifies Supply Chain: Puts a Lid on Excess Colors. Mattel is tackling supply chain head-on in 2020 as the CEO says that “supply chain had become one of our handicaps.” The company is reexamining its broader factory footprint and catalog of components. Until recently, toy designers could choose from about 150 types of red, for instance, and each variation added storage costs and factory downtime for cleaning equipment to swap out the shades. Related, a look at Mango’s Logistics Operation Focused On Fast Fashion.

2020 Container Outlook. Container trade is expected to grow 4.9% this year, compared to 2019’s 2%, on the back of strong intra-Asian shipping. This growth is expected to continue at similar levels over the next 5 years driven by increased containerization of cargo, which in turn generates more volume and lower rates for shippers. IMO 2020 is expected to result in a fuel bill hike approaching $20B, which could cripple a sector that has failed to make an aggregate profit in over a decade. Also, IMO 2020 to Beckon A New Reality.

US Commercial Drone Deliveries Will Finally Be a Thing in 2020. With technical barriers to widespread drone delivery crumbling, beyond-line-of-sight operations that fly over people are marching closer to becoming a reality. The FAA remote ID announcement this week, essentially creating license plates for drones, is one of the last major steps the agency has stated will be required before allowing drone flights over people. Speaking of last mile, FedEx and UPS Increase Surcharge on Oversized Goods.

An Amazon Warehouse Town Dreams of a Better Life. Nearly 1 in 5 people in Campbellsville, KY live in poverty. To replace its old staple tenant Fruit of the Loom, the town gave Amazon an incentive in which 5% of Amazon workers’ paychecks, which would ordinarily go to the county and state, went to Amazon itself. Amazon’s incentives totaled $19M over 10 years, including exemption from the state’s corporate income tax. The town is grateful for the job presence but disillusioned by the lack of wage growth. On the topic of warehousing, Fixed vs Mobile Industrial Robots and Is Warehousing Alphabet's Next Moonshot?

Federal Judge Temporarily Blocks AB5 Enforcement Against California Trucking. Motor carriers operating in California received exemption from AB5 by successfully arguing the bill is preempted by a prior FAA Act. Carriers stand to benefit for obvious reasons, but many owner-operators have also spoken out saying they have no desire to work for a carrier full time. Rather, they want to maintain their ability to work for multiple carriers and create their own schedules.

Mobility 🚗

Norway’s Capital City Achieves Vision Zero. Oslo capped off 2019 without a single pedestrian or cyclist fatality, recording only a single traffic death all year—a driver who crashed into a fence. The city has steadily progressed down from 41 fatalities in 1975, as American cities have gone in the other direction. Also, Cities Race to Slow Climate Change.

Tesla Sold More Cars in 2019 Than in Previous Two Years Combined. Tesla sold a record 367,500 cars last year, largely driven by the popularity of the Model 3 and continued growth of consumer demand for EVs. As successful as 2019 was, 2020 is posed to be even better, Why 2020 Is the Turning Point for Electric Cars. Still, Tesla’s positioning of its Autopilot raises huge red flags as Three Crashes, Three Deaths in December Raise Questions About Tesla’s Autopilot.

Electric Cars Threaten the Heart of Germany’s Economy. The decline of global car sales coupled with capital outlay being focused on new technologies like autonomous and electric cars is striking at the biggest industry in Germany’s economy. Employee concern is mounting as this new era of automotive manufacturing appears to be a secular shift—focusing on vehicles that are easier to assemble, requiring fewer workers and fewer parts. Related, States Grapple with Regulating EVs to Pay for Road Maintenance.

Bosch to Offer Lower-Cost Lidar for Self-Driving Cars. Bosch made its self-driving aspirations evident last month with the launch of a robot-taxi pilot in partnership with Daimler. The tier 1 supplier’s new lidar sensor will complement its existing radar sensor the LRR4. Although official pricing has not been disclosed, it is expected to be sub-$1K, potentially making lidar a mainstream car feature. More on the AV outlook for 2020,  After 2019’s Reality Check, What’s Ahead for Driverless Cars in 2020?

Cities Struggle to Boost Ridership With ‘Uber for Transit’ Schemes. Several cities from Shanghai, to Helsinki, to Sydney have struggled to rollout AI-driven, on-demand bus services. The barriers to success in microtransit remain high as public transit cannot price similarly to services like Uber, which while generally overlooked, is really a premium transit service.

Baidu Bets on FPGAs for Automated Valet Parking. Baidu’s automated valet parking module is now production-ready, allowing drivers and passengers to be dropped off before the car drives itself away to look for a parking space. Automated valet parking is seen as an important stepping stone for driverless vehicles, offering a profitable and sustainable business model in the near-term, as fully autonomous vehicles remain years away. 

Fundraises, M&A, Talent 💸

CarDekho Raises $70M Led by Ping An Global Voyager Fund. CarDekho is an Indian automotive technology startup that has digitized a wide array of the Indian auto ecosystem. Sequoia and Hillhouse Capital also participated.

Clearcover Raises $50M Led by OMERS Ventures. Clearcover is a digital insurance carrier. With this latest funding, the company intends to a expand its platform to a total of 10 different states by the end of 2020.

GoMechanic Raises $14.7M Series B Led By Sequoia Capital and Chiratae Ventures. GoMechanic provides consumers with a transparent and convenient solution for car repairs- on average, customers can save 40% using GoMechanic vs authorized repair centers.

Skywatch Raises $7.5M Series A Led By Bullpen Capital. Skywatch provides satellite image distribution, analysis, and data management software. The company will ramp go to market this year and hopes to have 1,000+ customers on the platform.

Shipfix Raises $4.5M Led by Idinvest Partners. France-based Shipfix is using deep learning to modernize dry-cargo shipping operations by giving users a picture of what's going on in the dry cargo shipping market. It services charterers, ship owners, ship operators, freight forwarders and various brokers.

Lixiang Files for US IPO of at Least $500M. Chinese electric vehicle maker Lixiang Automotive, founded by entrepreneur Li Xiang, is aiming to IPO in H1 2020. China’s alternative powertrain vehicle market, which includes PHEVs and BEVs, is the world’s largest. Sales in the sector jumped almost 62% in 2018 even as the broader auto market contracted.  

Company Building 🛠️

How to Lose A Monopoly. “Today, it’s quite common to hear the assertion that our own dominant tech companies - Google, Facebook et al - will easily and naturally transfer their dominance to any new cycle that comes along. This wasn’t true for IBM or Microsoft, the two previous generations of tech dominance, but then there’s another assertion - that this was because of anti-trust intervention, especially for Microsoft. This tends to be said as though it can be taken for granted, but in fact it’s far from clear that this is actually true.”

Pricing Transformations in 2020. A great read on developing scalable pricing, the role of CX in pricing, the evolution of procurement teams and more.

Starting Greatness: Marc Andreessen on Netscape. Andreessen discusses the highs/lows of building Netscape, reflects on what he might have done differently, and what lessons from its success are not fully understood?

Who's Hiring? 👩‍💻

Backend Engineer at Mobikit in Columbus, OH.

R&D Deep Learning Engineer at Gatik AI in Toronto, Ontario.

Regional Sales Manager at Zeelo in London, England.

Check out other jobs at Dynamo portfolio companies.

❤️ 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.