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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Weekly Commentary 💭
You might begin noticing a different tone or voice to the Dispatch as Clay starts leading the curation and editorial of our weekly newsletter. As always, please reply with feedback or questions.
We Are Dynamo,
Santosh, Jon, Barry, Ted, Clay, Katie, Charles, Leo, and Warren
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Supply Chain 📦
Port of Long Beach Smashes Annual Record Despite December ‘Speed Bump’. TEUs handled at the port grew by 13.5% y/y to a record 9.4M in 2021 – that's 1.3M more TEUs and 15.7% higher than the previous record! Imports increased by 14.6% y/y to 4.6M TEUs, while exports declined by 2.6% to 1.4M TEUs. Additionally, the ports revisited implementing a dwell fee this past week which charges ocean carriers $100 per long-dwelling container, increasing in daily $100 increments per container. That said, not everything was good news for the industry as Cargo Data Timeliness and Consistency Becomes a Bigger Hurdle Than Access.
🌟US to Close Borders to Unvaccinated Canadian, Mexican Truckers. Border COVID vaccine mandates are coming into force despite pushback from the truck industry. The impact is expected to be felt most acutely in the US-Canada freight market given 120K Canadian truckers regularly cross the border, out of which 10%-15% may leave cross-border trucking, according to the US and Canadian Trucking Alliances. To put this into perspective, Canada is the top exporter for 32 US states and moves $45B worth of goods across the border every month. For more on this hot topic, check out Pigs Here, Feed There: Truck Cargoes Stuck on U.S.-Canada Border.
Edge Computing Holds Rising Value for Logistics and Manufacturing Firms. As organizations shift to more distributed networks enabled by improvements in Wi-Fi, Bluetooth, and 5G data communications, 25% of supply chain decisions are expected to be made across intelligent edge ecosystems, according to a report by Gartner. The design enables data processing, communications, and storage to occur at the point of data capture, such as small sensors placed throughout a logistics operation. Platforms leveraging edge computing, like smart robots in warehouse operations, would create more even workflows, distribute data capacity, and streamline real-time responses. For more opportunities for technology innovation within the space, check out How Global Supply Chain Woes Maybe an Opportunity for Seattle Shipping-tech Companies.
The Fertilizer Crisis Is Getting Real for Europe Food Prices. An energy crunch, export curbs, and trade sanctions will force growers of staples like corn and wheat to undergo their first fertilizer crisis. Sky-high nutrient prices will leave European farmers little choice but to pass on the cost down the food chain. As a result, many farmers yet to secure chemicals are either waiting until the last minute in case prices ease or may spread them more thinly. In related news, Export Restrictions by Russia and China to Sanctions on Belarusian Potash Output and Europe’s Imbalance in Shipping Container Supply Chain is Far From Over.
Truck Tonnage Ends 2021 With Gains, Reports American Trucking Associations. ATA’s advanced Seasonally Adjusted For-Hire Truck Tonnage Index (whew, that’s a mouthful), a barometer of the US economy representing 72.5% of tonnage carried by all modes of domestic freight transportation, increased by 1.4% y/y to 114.7 in December. The gain followed a 1.6% increase in November and marked the fourth consecutive annual increase. In December, tonnage reached the highest level since March, but it was still 2.7% below the pre-pandemic high, which was attributed to ATA’s data being dominated by contract freight. Although the trend is reflective of a still-growing goods economy, contractor truckload carriers operated fewer trucks in 2021 compared with 2020, making it difficult to haul significantly more tonnage with fewer trucks. For related news on trucking (and one long headline): One of the Largest Trucking Companies in the US is Giving Raises of Up to 33%, Allowing Drivers to Make Up to $150K in Their First Year, Amid Worker Shortage.
Union Pacific Will Beef Up Intermodal Infrastructure In California, Midwest. The company plans to bolster its intermodal offerings through capital investments and programs meant to encourage loaded outbound international containers. These investments are part of its $3.3B capital expenditures plan for 2022, which also includes freight car acquisitions, projects to bring more carloads to the network, the completion of approximately 20 sidings, and upgrades to the locomotive fleet. On more news about investments aimed to ease logistics hurdles, Intel's $20B Ohio Factory Could Become World's Largest Chip Plant and Giants ArcBest and NFI Pour Millions Into Remote-Operated Forklifts To Help Solve Labor Shortage.
Lumber Rebound Awakens Timber Market From Long Slumber. Record lumber prices and cardboard production are starting to lift southern timber prices from their years-long slump. A lot of woodlands are too mushy to log, putting a premium on trees that can be harvested from dry ground. Although many believe it’s still too early to call an end to the timber bust, the average price in the South for pine trees used to make lumber hasn’t been higher in more than a decade. Meanwhile, cardboard boxes have never been more in demand, with US production of cardboard growing 5.6% y/y to a new high in 2021. Separately, boxes won’t be the only thing movers and shippers might want to start rationalizing: Butter Prices Skyrocket 40% y/y to $2.02 per pound on Labor and Supply Woes as well as Laundry Detergent, Gas, Cars: Inflation, Supply Chain Snags Send Prices for Everyday Items Soaring.
Mobility 🚗
CATL Warns On Solid-State Batteries, Sees Supply Shortfall Ahead. CATL, a leading Chinese battery manufacturer, said that unresolved technical problems will most likely prevent mass production of solid-state batteries for 10 years. The first generation of solid-state batteries is expected to emerge by 2025, garnering 1% of the market share. The next generation is expected after 2030. Why is this relevant? Stakeholders should re-evaluate expectations on where battery technology will be by 2025. For more on battery production, this week check out VW and Bosch Set Up JV to Push European Battery Production.
Intel To Invest $20B For Ohio Chip Hub; Project 'Critical' To Automakers. Intel is investing $20B into what it expects to eventually become the world's largest silicon manufacturing site. They will begin the construction of two fabrication plants in New Albany, expected to be completed by 2025. This is part of a string of reactions to the global chip shortage, aimed at increasing long-term supply chain resilience. There is also noise coming from Washington on a potential bill that would amplify government investment in the area. Other relevant news for automakers include Computer Chip Shortage Pushes European Car Sales to Record Low and Will Airbags Calm Fears About Driverless Vehicles?
Hyundai, IonQ Use Quantum Computing to Simulate EV Battery Chemical Reactions. Hyundai has announced its partnership with IonQ to use quantum computing to study lithium compounds. This could lead to important innovations to the production and efficiency of batteries, the most expensive component of EV production. This would allow companies to adjust batteries’ charge and discharge cycles, which can affect durability, capacity, and safety. For more information on the latest EV tech check out CATL Says Evogo Battery Swap Will Work with 80% of All Pure EVs and Electric Vehicles Are Going to Dent Oil Demand—Eventually.
Opibus Reveals First Electric Bus Designed and Manufactured in Africa. Opibus, a Swedish-Kenyan tech company, just announced the first electric bus designed and manufactured in Africa. This will be the first bus to run on the company’s EV platform. Opibus expects the new bus to cost 80% less on maintenance costs compared to its diesel counterparts. These lower costs combined with great efficiency could set the tone for sustainable transportation within Africa’s public transport sector. For more on electric buses, check out Iowa City to Roll Out First Electric Buses and Volkswagen Money Helps Connecticut Start ‘Long Road’ to Electric School Buses.
Berlin Could Be Planning a Car-Free Area Larger than Manhattan. Berlin legislators are looking at a citizen-led plan that would heavily limit how many cars would be able to drive through the middle of the city. The biggest opponents of the plan don’t believe that alternative forms of mobility are convenient enough yet to completely abandon driving. The movement towards driverless cities has potential ramifications on the viability of micromobility and public transportation companies. For the latest on micromobility look at Lyft, Bird Execs Say Subsidies, Infrastructure Crucial to Expanding Micromobility.
Ford and ADT Join Forces On Car Security With Canopy Venture. Ford recently announced its new partnership with ADT on a new venture focused on vehicle security systems. In order to solve the estimated 7.4B problem of auto theft, Ford and ADT are creating Canopy, a system that uses a combination of sensors, cameras, radar, and GPS to report threats. The first systems will be released as aftermarket accessories for Ford vehicles, starting with the new electric F-150 and the e-Transit. For related news in the AV space check out Mercedes-Benz Acquires Stake in Lidar Maker Luminar, Will Use Its Sensors for Future AVs.
🌟Airlines Cancel Flights To US Due To AT&T And Verizon 5G Roll-Out. Airlines have canceled flights due to the potential of 5G interfering with aircraft technology that measures altitude. A little over 2% of the flights to the US have been canceled due to these concerns. While other countries have been rolling out 5G, the design of these networks defer from the networking being built in the US. Why? According to the FAA, cellular towers in the US have greater signal strength and cell tower antennas point up at a higher angle. In other news, Why Blockchain is Key to the Future of Smart Mobility and How Flying will Change in 2022.
Fundraises and M&A 💸
MatchLog Raises $3M Co-led By Blue Ashva Capital and Capital-A. MatchLog optimizes cargo, equipment and transport routes to solve wastages in the supply chain. They claim to be the first company in India to offer at scale the ability to turnaround a container from an import to export cycle, eliminating unnecessary empty runs to and from the container yards. The funds will be used to further develop their technology and enhance their machine learning models.
Sote Raises $4M Led By Social Capital. Sote is building the digital logistics infrastructure and largest B2B marketplace for Africa. This $4M seed extension round brings its total raised to date to $8.4M. The funds will be used to scale their platform and hire industry leaders.
Dropee Raises $7M Led By Vynn Capital. Dropee is a B2B wholesale platform that also offers financial services, like working capital loans, to SMEs. Additional investors include HCL Capital, Resolution Venture, LKF Capital, and Brama One Ventures. The funds will be used to expand their supply chain financing and onboard more brands and wholesalers across Southeast Asia.
Monta Raises €15M Led By Creandum. Monta is a platform for EV owners to charge seamlessly both at home and when away. Global VC firm Headline also made a significant investment towards the round. The funds will enable them to expand their global charge point network and grow their team.
7bridges Raises $17M Led By Eight Roads. 7bridges is a smart logistics platform that delivers visibility and control over logistics processes. This raise is coming after a strong couple of years of growth for 7bridges, which today provides tools to around 20 large multinational companies. The funds will be used to grow their platform.
Seurat Technologies Raises $21M Series B Extension. Seurat Technologies is a 3D metal printing company. Investors in the round include Xerox Ventures, SIP Global Partners, Capricorn's Technology Impact Fund, True Ventures, Porsche Ventures, and Maniv Mobility. The funds will be used towards building their production-grade system which is targeted to produce parts at $300/kg while tackling sustainability challenges.
Smartcar Raises $24M Led By Energize Ventures. Smartcar is the car API for developers. Their platform allows web and mobile apps to locate and unlock cars using simple HTTP requests. Additional investors include Andreessen Horowitz (a16z) and New Enterprise Associates (NEA). The funds will be used to introduce new vehicle telemetry APIs and broaden their compatibility with more car brands.
Formic Raises $26.5M Led By Lux Capital. Formic is a provider of turnkey robotic solutions to American manufacturers. In addition to the $26.5M round, Formic has secured access to more than $100M of debt capital to fund equipment purchases. This funds will enable the company to expand its operations and support the rapid deployment of its Robots-as-a-Service offering for American manufacturers.
Radian Aerospace Raises $27M Led By Fine Structure Ventures. Radian Aerospace is building a reusable horizontal takeoff and landing spaceplane, delivering people and light cargo to low earth orbit. Additional investors include EXOR, The Venture Collective, Helios Capital, SpaceFund, Gaingels, The Private Shares Fund, Explorer 1 Fund, and Type One Ventures. The funds will be used to support the development of their spaceplanes.
Alaiko Raises $30M Led By Next47. Alaiko is a fulfillment-as-a-service platform that enables online shops to scale their operations without friction. They came out of stealth mode with additional backing from Tiger Global and angel investors including Lazada founder Maximilian Bittner, and early Shipmonk investors Dan Dershem and Dave Anderson. The funds will be used to further develop their core technology, expand their fulfillment services, and grow their international team.
Moladin Raises $42M Co-led By Sequoia India and Northstar Group. Moladin helps agents and smaller dealers use tech to simplify transactions related to selling used cars. Additional investors include East Ventures, Global Founders Capital, and K3 Ventures. The funds will be used to scale their existing business and enter new secondary segments such as retail, financing, and servicing.
Phantom Auto Raises $42M Co-led By ArcBest and NFI. Phantom Auto builds remote operation software for logistics vehicles. Their lead investors ArcBest and NFI, executed commercial agreements to deploy thousands of Phantom-powered forklifts in the coming years. They will use the latest funding to grow their team, develop new technologies, and execute on commitments to top-tier customers.
Parallel Systems Raises $49.55M Led By Anthos Capital. Parallel Systems was founded by three former SpaceX engineers to build autonomous battery-electric rail vehicles. They came out of stealth mode on January 19 with the announcement of this raise. The funds will be used to build their second-generation vehicles, run pilots, and hire engineers.
Daedalean Raises $58M Series B. Daedalean builds autonomous flight control software for civil aircrafts. This round was led by Carthona Capital, Amino Capital, Redalpine Venture Partners and Honeywell Ventures. The funds will enable them to bring their technology to market over the next four years.
MilkRun Raises $75M Led By Tiger Global Management. MilkRun is an instant delivery grocery service based in Sydney, Australia. It was founded only 4 months ago by Milham, who previously co-founded direct-to–consumer mattress company Koala. The funds will fuel the company’s expansion from Sydney’s inner city suburbs across greater Sydney and into other Australian cities.
Factorial Energy Raises $200M Co-led By Mercedes-Benz and Stellantis. Factorial Energy builds solid-state batteries that offer up to 50% longer range per charge, increased safety, and are cost competitive with conventional lithium-ion batteries. The company has Joint Development Agreements with Mercedes-Benz, Stellantis and Hyundai to commercialize their batteries. The funds will be used to advance R&D, scale their team and invest in manufacturing facilities to drive commercial production.
Wayve Raises $200M Led By Eclipse Ventures. Wayve builds artificial intelligence software for AVs. They claim to be the first team to develop breakthroughs in deep learning to build autonomous driving technology that can easily scale to new markets using a data-learned approach. The funds will be used to expand pilot programs, advance their core technology and develop their AV prototype.
Exotec Raises $335M Led By Goldman Sachs Asset Management. Exotec builds scalable warehouse robotic solutions. They doubled their revenue and tripled their customer base since closing its $90M Series C funding round in the fall of 2020. The funds will be used to launch large-scale deployments in North America, Europe, and Asia for global brands.
Freightos Group Acquires 7LFreight. Freightos Group is a rapidly growing online marketplace for freight transportation. The acquisition of 7LFreight allows Freightos to further enhance its instant air freight pricing and booking capabilities through its WebCargo unit. WebCargo is a multi-carrier platform that connects airlines to freight forwarders, giving them automated pricing, quotes and reservations. The terms of the deal were not disclosed.
Instabox Acquires Porterbuddy. Instabox is a delivery service where packages are delivered to smart box locations 7 days a week. The acquisition enables Instabox to combine their best-in-class locker deliveries with Porterbuddy’s last-mile logistics technology to enter the home delivery market. The terms of the deal were not disclosed.
TransImpact Acquires Avercast. TransImpact provides end-to-end technology-based solutions that optimize supply chain operations, improve margin, and transform the business performance of customers. The acquisition of Avercast’s inventory forecasting and demand planning software adds seven software products to TransImpact's current technology solutions. The terms of the deal were not disclosed.
Company Building 🛠️
NYT on QSBS. Political perspectives aside, the benefits from QSBS is a must for American founders. It allows founders and investors to harvest up to 10x their initial or $10M (whichever is higher) of gains subject to some key parameters. Ask your tax specialist/lawyer if you need to learn more/ensure your company adheres to the requirements.
Don't Overdose on VC. “For instance, compare the performance of the 30 most funded and the 30 most valuable startups in this data set. The most valuable companies raised half as much capital and produced nearly 4X the value! Capital is clearly important, and most startups need some funding to get started, but it’s not determinative.”
VP Sales as a Catalyst. Ed Sim at Boldstart with a salient Tweet - also check out some of the comments around honesty and sequence of hires.
Who's Hiring? 👩💻
Enterprise Account Executive at Leaf Logistics in Chicago, IL (remote ok).
Machine Learning Engineer at Milk Moovement in St. John’s, Halifax (remote ok).
Cloud Software Developer at Coros in Mountain View, CA (remote ok).
💥 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.