Dynamo Dispatch (01/20/20)

Issue 92 | Joby, Hesai, XPO

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

❤️ 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 we were to guess, 2020 will be one for the books as historians chart the history of sustainability and the role of the industrial complex. For those who’ve spoken with us in the last several months, we believe that sustainability is a major trend for supply chain venture investment and one that will be driven by varying levels of regulation/self-regulation.

As you read ahead, note that this week saw MSFT announce plans to be carbon negative by 2030, Citi launch a $150M impact fund that will invest in sustainability, and Nestle committing $2B to avoid virgin plastics and boost investment in packaging innovation. This activity comes on the heels of IMO 2020, as the world’s steamship lines move to reduce sulfur content in the fuel they burn. 

While transportation and industry are estimated to contribute to 50%+ of global CO2 emissions, sustainability does reach beyond just emissions (to note, emissions continue to be an area we’re interested in as electrification requires a whole stack of software solutions to enable). For example, we consider the usage of plastics in packaging (40% of plastic demand is to pack items), food provenance (20% of fish is mislabeled), and validating sourcing practices (80% of companies don’t know if their products contain conflict minerals) as a few of the opportunity areas. Please reach out to us at hello@dynamo.vc if you’re building in the aforementioned areas (or otherwise).

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 📦

XPO Weighing Strategic Alternatives. XPO is flipping the script on its long-time track record of acquisitions. Maintaining its LTL business at its core, XPO is taking a hard look at its warehousing, last-mile delivery, drayage, and brokerage businesses in considering divestment. ICYMI, check out Bill Driegert of Uber Freight on the Future of Supply Chain discussing surge pricing, digital brokerage, and scaling.

Amazon’s Busy Week: Lifts Ban on FedEx Ground for Third-Party Prime Shipments, Plans to Invest $1 Billion to Help Digitize Small Businesses in India, and Expanding Air Cargo Ops. Rival Walmart Expands Its Robotic Workforce to 650 Additional Stores.

📊Top Labeling and Packaging Trends in Art Supply Chains. Loftware takes a look at 5 key trends in the space: end-to-end solutions, traceability & visibility, content management, digitalization, and sustainable packaging. Half of the respondents reported that they currently have separate workflows to manage their labeling and artwork packaging. Related, Startups Raise Record Sums To Take On Packaging Waste.

Maersk Ramping into Cold Storage to Boost Surface Transportation Business. Since announcing a new strategy in 2016, Maersk has dialed into cost-cutting efforts and profitability in its container logistics business at the expense of market share. While Maersk handles about 1 in 5 containers shipped at sea, it manages drayage for less than 25% of its customers. In order to correct this without competing with its large freight forwarder customers, Maersk has set its sights on cold chains. On the topic of trucking, Insurance Renewals Are Scourge to Trucking Operators.

⭐ Fabric Wants to Help Retailers Compete with Amazon. Fabric specializes in fulfillment condensed in tight urban spaces. The company can house 15,000 SKUs and fulfill 500-600 orders per day from a measly 6,000 sqft. space. Fabric plans to open 2 micro-fulfillment centers in NYC this year, enabling sub-two-hour delivery throughout the 5 boroughs. On the topic of warehouse automation, The Drivers Behind Warehouse Automation Investment and Spending on Robotics Forecast to Exceed $112B in 2020.

CBP Announces Cargo Data Pilot. US Customs and Border Protection is exploring technologies to better anticipate potentially illicit cargo for more targeted screening without bottlenecking processes for all other legitimate shippers. This pilot will involve the carriers transferring detailed cargo data ahead of port arrival, including details such as origin, content, tracking, and recipient information. On the international trade front, China and US Sign Initial Trade Pact but Doubts and Tariffs Linger and ARO 2020: Trans-Pacific Lines Look to Manage Capacity.

TfL Launches Freight Innovation Challenge. Transport for London has announced the London Freight Lab, in which they will partner with 10 startups focusing on innovation to tackle freight congestion. Tfl is collaborating with CEVA Logistics, Plexal, REEF Technology, Royal Mail, Thames Water, UPS, and others to evaluate the opportunities. The deadline for application submission is February 5th.

Mobility 🚗

China Auto Sales Slid 8.2% Last Year. From record growth throughout the 2000s, China’s automotive success finally started to taper off in 2018, falling 2.8%. After sliding an additional 8.2% last year to 25.8M vehicles, the market is poised for an additional contraction again this year. Upon closer inspection, German and Japanese OEMs have seen continued penetration as domestic brands receded. Augmenting domestic concerns, Price War Wipes out Half of China's EV Battery Makers while Ionity Increases Electric Vehicle Charging Prices 500% Starting January 31

US DoT Supports Consumer Reports Efforts to Make Car Saftey Features Clearer. The endorsement of a standard list of features does not mean manufacturers must use the new names but does indicate the agency wants more consumer-friendly descriptions (we’ve previously discussed how the term AV should only be used for market 100% autonomous vehicles). If you don’t think this is an issue, consider that a AAA survey found that a single feature can be referenced by up to 20 different names- that’s confusing. Related, Federal AV Policy Has 'Number of Parallels' to Boeing 737 Max Policy

📊McKinsey: The Future of Mobility Is at Our Doorstep. McKinsey summarizes its 2020 outlook on mass mobility, paying particularly close attention to fast followers in the EV space, growing infrastructure demands, and the role of cities in incenting innovation. Zooming in on micromobility, the estimation of the US market size is larger than that of Europe and China combined as a result of pricing differences. On the infrastructure front, From Utah to Florida, States Boost Spending on New Roads and Navigant Research Report Shows Major Growth for Smart Street Lighting.

Waymo’s Long-Term Commitment to Safety Drivers in Autonomous Cars. Humans have been behind the wheel for almost all of the 20M miles of public road testing that Waymo has completed thus far. Despite launching some driverless rides in Pheonix last fall, Waymo is still focusing heavily on strategically positioning its drivers’ employment statuses under staffing agencies to distance them from liability over the next several years. Related video, Mobileye’s Camera-Driven Autonomous Vehicle

Uber Calls on Congress to Boost Cyclist, Pedestrian Safety. Last week Uber launched a campaign in collaboration with various cyclist advocacy groups requesting additional funding for infrastructure to protect pedestrians and micromobility users. Prior to this, Bird had a fund to help cities pay for mobility infrastructure but ran into liability issues. Uber aims to avoid this by taking a more hands-off advocacy approach. Related, Electric Bikes Market to Reach $26 Billion by 2026 while Related, Behind the Gains in US Public Transit Ridership.

Largest Electric School Bus Program in United States Launching in Virginia. In partnership with Dominion Energy, Virginia school districts will begin phasing in electric school buses, initially launching with 50 vehicles. The initial launch will already be the largest deployment in the US. The goal is to roll out a 50% electric fleet, 1,000 vehicles, by 2025. Related, New Jersey Gov. Signs Electric Vehicle Law

Fundraises, M&A, Talent 💸

Joby Aviation Raises $590M Led by Toyota. Santa Clara-based Joby Aviation becomes the best-funded eVTOL startup with this round bringing its total funding to $720M in pursuit of electric air taxis. In addition to the investment, Toyota will partner with Joby to share insights into manufacturing and control processes.

Hesai Raises $173M Co-Led by Bosch and Lightspeed Venture Partners. China-based Hesai manufacturers both solid-state and mechanical LiDARs, as well as integration modules for AVs. The raise is one of the largest yet in the glowing sector.

NextNav Raises $120M Led by Fortress Investment Group. NextNav has developed an indoor positioning system that can locate devices like smartphones, vehicles, and IoT products in areas where GPS signals cannot be received. Columbia Capital, Future Fund, and NEA also participated.

Arrival Raises $111M From Hyundai and Kia. Arrival provides an EV architecture of materials, components, and software that its customers can build on top of. Currently, the company is piloting its platform with logistics companies in Europe that use vans built with its technology.

FlashParking Raises $60M Led by L Catterton. Austin-based FlashParking grants mobile apps for parking providers, enabling a whole suite of services like charging stations and cleaning. The company plans to use the funds to expand its service offering for parking garages and to explore new markets.

Matternet Raises Undisclosed Amount From McKesson. Matternet provides drones as a service for hospital chains, offering software and landing infrastructure as part of the solution so that hospitals can more efficiently move high-value items such as blood samples throughout their campuses. This strategic investment comes ahead of a planned $30M Series B.

Bolt secures $55M in Venture Debt from the EIB. Estonian Uber, Bolt offers a variety of transportation services including ride-hailing, micromobility, and food delivery. The company raised this bout of capital to focus on nailing down some safety improvements within its product line. 

Getir Raises $40M Led by Sequoia Capital. Istanbul-based Getir offers last-minute delivery services for common supermarket commodities, promising hyperfast delivery times of about 10 minutes. The company plans to launch in London by midyear. 

Hitched Raises $5.5M Led by Cottonwood Venture Partners. Hitched is a Houston-based marketplace for industrial equipment rentals. The company intends to use the funds to accelerate its product development and focus on polishing its user story.

Nestle Plans $260M Venture Fund for Sustainable Packaging Startups. As part of a $2.1B investment to cut its use of plastics derived from fossil fuels over the next five years, Nestle will launch a fund to invest in promising startups in the space. 

Proeza Ventures Raises $50M Fund to Back Mobility Focused Startups. Houston and Monterrey-based Prozea Ventures announced that it has raised its first fund last week, making it the largest LATAM investor specialized in the space. “Our mission is to discover and invest in visionary founders building early stage startups transforming the way in which we think about mobility and with whom we can partner to make a more sustainable world”, said Rodolfo Dieck, Managing Director at Proeza Ventures.

Takeaway.com Has Finally Won Its Battle to Acquire Just Eat for $7.68B. Amsterdam-based Takeaway.com announced that 80.4% of Just Eat shareholders had agreed to the all-share offer, greenlighting the acquisition. Takeaway.com has said that the dominance created by the merger will allow the entity to overcome the confounding low margin concerns.

Delivery Hero to Takeover Woowa with $2.56B investment. Food delivery group Delivery Hero raised $2.5B to help fund its $4B takeover of South Korea's food delivery app owner Woowa Brothers.

Google Acquires Pointy for a Rumored $163M. The acquisition of Dublin-based Pointy is proof of Google’s long-term commitment to deepen its foothold in e-commerce — in this case by working more closely with brick-and-mortar retailers. Pointy provides hardware and software technology to help physical retailers seamlessly expand to online channels, especially those with little previous physical-online integration.

Transplace Acquires Lanehub. Asset-light 3PL Transplace brought cloud-based freight “social networking platform” Lanehub into the fold last week. Lanehub will allow Transplace to offer its customers a network of more than 150 shipper members, 250 carrier members, and 180,000 lanes to match them with the lowest cost options.

GlobalTranz Acquires Cerasis. GlobalTranz complements its existing 3PL TMS service with the purchase of Cerasis, a tech-enabled managed transportation and multimodal-focused 3PL service provider. Cerasis is GlobalTranz’s 11th acquisition since January 2017, as the company continues to ride its acquisition-heavy strategy.

Company Building 🛠️

Enterprise IT Spending Expected to Grow 3%+. For those of us focused on enterprise, this is great news - especially in industries such as supply chain that are still in the early innings of cloud, are weighing major upgrades/replacements, and seeing a new way of operating from newer execs.

🎧How I Built This: Jerry Murrell of Five Guys. We were walking through ATL looking for something to eat and were praising the consistency of Five Guys. Consistency is important as a startup scales regardless of the function - buying/pricing, customer service, and product.

Your Life is Driven By Network Effects. “Our networks are our most valuable resource. They are the way our lives express themselves. Those networks are made up of all the people you care about, the people you, inspire, move, and help to live their best lives.”

Who's Hiring? 👩‍💻

Director of Operations at Token Transit in San Francisco, CA.

Integrations Lead at Stord in Atlanta, GA.

Enterprise Account Executive at LEAF Logistics in New York, NY.

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.