Dynamo Dispatch (02/07/22)
Issue 181 | Amitruck, Lula, Loadsmart
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 💭
Happy February! Thanks to James Hueston, Allyson Plosko, and Lena Berghaus for offers and introductions to brilliant founders, investors, and new corporate friends. Also shoutout to Mark Mwangi and the rest of the Amitruck team for their recent raise (scroll to the Fundraises and M&A section to learn more).
BTW- a little birdie told us that Clay is going to step up his Twitter game finally. Give him a follow if you want our Associate’s wildest dreams to come true. 💫
We Are Dynamo,
Clay, Santosh, Jon, and the rest of the Dynamo team
Note: please add “dynamo@substack.com” to your email client, so you don’t miss future issues due to aggressive spam filters.
Supply Chain 📦
🌟Warehouse Space Is The Latest Thing Being Hoarded. Logistics firms are finding new options to deal with a scarcity of storage, including building multi-story facilities and choosing locations farther from coastal ports. As retailers and logistics companies try to stockpile goods to hedge against supply chain problems, they are facing a new challenge: in many parts of the US, there is little to no space available to stash the merchandise. Moreover, although small businesses have been able to pivot more easily than larger companies as these rely more on overseas producers, they still suffer due to larger retailers scooping up the available warehouse space. Thankfully, a ‘Massive’ Revision To Warehouse Jobs has eased some concerns as Warehouse Vacancy Rates Remain At All-Time Lows.
US Manufacturing Begins 2022 With Continued Growth. In its monthly report, ISM announced PMI decreased 1.2% m/m to 57.6, marking the 20th consecutive month of growth. Except for paper products, 14 manufacturing sectors saw gains in January, including apparel, furniture, and machinery. Key metrics such as new orders and production slipped 3.1% and 1.6% m/m to 57.9 and 57.8, respectively. However, employment increased by 0.6% m/m to 54.5, growing at a faster rate for the fifth consecutive month. Unlike in the US, the future of China’s manufacturing industry doesn’t look as promising following Rising COVID Cases Slowing Manufacturing To Weakest In Two Years and the US House of Representatives Passing Bill Adding Billions To R&D For Shoring Up Domestic Manufacturing.
Union Pacific (UP) Rail To Test Battery-Electric Locomotives. The company intends to invest more than $100M in 20 battery-electric locomotives, representing the largest investment in battery-electric technology in the US and the world’s largest carrier-owned battery-electric locomotive fleet in freight service. UP hopes to eliminate about 4K tons of carbon a year for every ten battery-electric locomotives used. The locomotives will be deployed in California’s and Nebraska’s rail yards to test their performance in cold and warm weather, as well as assess the potential use for long-haul services. For more on rail, U.S. Rail Carload And Intermodal Volumes and Virgin Hyperloop To Revolutionize Freight Transportation.
Omicron And Weather Dent Air Cargo Growth In January. Despite a new report showing air cargo demand was flat compared to 2020 and 2019, the sampling doesn’t take into account ongoing disruptions to the air logistics system, resulting in an undercount of volume. The amount of air cargo moved by airlines in January inched up 0.1% y/y and 0.2% versus 2019. Air logistics system continues to be buffeted by events that are chipping away at already tight capacity and reducing efficiency, including bad weather and the rollout of 5G wireless service. On the positive side, cargo capacity was up 0.06% y/y but is still 4% below pre-pandemic levels. In related news, FedEx Boosts Trans-Atlantic Air Capacity With Additional Freighters and The World’s Biggest Ocean Shipping Lines Are Buying Cargo Planes.
2021 Sets Robot Sales Record For North America. $2B worth of robots were sold in North America, increasing 28% y/y to a record number of 40K units according to the Association for Advancing Automation. The increase was fueled by a growing number of industries implementing robotics to help reverse productivity declines and fill repetitive jobs human workers don’t want. Interestingly, 58% of those orders came from outside of the automotive industry, a trend that began in 2020 and has led to a more diversified backbone of the robotics industry. Although Supply Chain Woes Continue To Hit Factories Providing Cherished Local Commodities, retailers such as Sam's Club Are Rolling Out Inventory-Checking Robots Chainwide to combat shortages.
Missing Profits: 93% Of Amazon Sellers Lost Revenue From Supply Chain Disruptions. Amazon accounts for roughly 40% of US eComm sales, which reached ~$470B in the US last year. However, sellers on the platform are not doing well: many lost revenue due to supply chain disruptions, and the majority reported inventory was delayed by two months or more. Moreover, 42% of large brands said they are unable to order new inventory from their supplier. With a large percentage of sellers’ products coming from overseas, Looming Obstacles For The Ocean Shipping Sector, including US Regulatory Scrutiny, raise concerns on eComm this year.
US Imports Help Fuel Strong, Long-Term LTL Growth. Containerized imports, as well as tight truckload and intermodal capacity, improve the outlook for the US LTL freight market despite risks of softening demand. Besides, an unlikely glut of LTL capacity that would reduce pressure on pricing and changes in consumer purchasing patterns during the pandemic has also pushed more freight toward LTL. Historically, some freight has shifted between truckload and LTL carriers when long-haul capacity is tight but LTL carriers are rejecting such freight at high rates. In fact, ODFL and Saia increased LTL shipments per day by 19.4% and 5.7% in 2021, respectively. That said, not all headlines about trucks have been positive following news that Trucks Are Clogging America’s Roads, Delivering Goods, and Tearing up Yards.
Mobility 🚗
Congress Is Still Spinning Its Wheels On AV Regulation. The first congressional hearing on AV regulation on Wednesday ended with little movement towards consensus on a regulatory approach. Legislation on this front has been stagnant for around half a decade. Automakers will most likely have to become adept at dealing with legislation on a state-by-state basis and not hold their breath on a universal federal approach. For related news, check out Self-Driving Car Companies Zoom Ahead, Leaving US Regulators Behind.
MDOT Awards Wireless EV Charging Lane Contract. The Michigan Department of Transportation awarded Electron the contract to build the US’ first in-road charging system, allowing EVs to charge while in motion. MDOT will provide $1.9M towards the pilot. Charging innovations like these have the potential to revolutionize vehicle fueling as a concept and make EVs the preferred option rather than a green alternative. In related news look at Lamborghini Is Still Figuring Out Its First EV and Volvo And Northvolt To Build A Gigafactory In Sweden With A Former Tesla Exec In Charge.
In Ford’s Transition To EVs, Cost-Cutting Takes Center Stage. Ford has created a task force dedicated to lowering the cost of materials for its EVs. They’re focused on further integrating its supply chain, engineering, and manufacturing divisions in order to locate opportunities to cut costs. The challenge as always will be maintaining a competitive quality while cost-cutting but this focus and innovation will be good for EVs as a whole as companies try to improve margins. For other EV news check out EV Charging Ports Will Soon Outnumber Gas Stations In The US, Yet It Won’t Be Enough and GM Aims for 400K EVs through 2023.
Automakers, Chip Companies Differ On Duration Of Semiconductor Shortage. Automakers have a more optimistic outlook and believe the chip shortage will lessen during the second half of 2022. Chip companies are focused on the risk of COVID potentially impacting medium-term recovery timelines. The shortage is estimated to cost the auto industry $210B. For more on the chip shortage, consider reading Ford To Suspend Or Cut Output At 8 Of Its Factories Due To Chip Shortage.
Tesla Recalls Full Self Driving Feature That Lets Cars Roll Through Stop Signs. The addition of the Assertive profile in Tesla’s FSD 10.3 allows vehicles to roll through stop signs at 4-way intersections. The recall will affect around 54,000 vehicles. This story illuminates the flip-side of the regulatory coin as automakers might have to balance safety and innovation in absence of federal intervention. For related information, check out Tesla Autopilot Issue Leads to 'Recall' of Nearly 300,000 Cars in China and More Details About Cruise’s Robotaxi Service.
The 3G Shutdown Could Put Some EV Chargers Out of Action. To make room for 5G, telecom providers are shutting down their 3G cellular spectrum. This will be a problem for devices that use 3G to go online, including various points in the older EV charging infrastructure. This could lead to a short-term decrease in usable chargers, especially in rural areas that might take a while to get upgraded. For more on charging, check out Quantumscape Solid-State Battery Holds 400 Charging Cycles and Tesla Is Expanding Third-Party Access to Superchargers.
Three Major Micromobility Operators Partner with UCL to Develop Universal Sound for eScooters. The goal of this collaboration is to establish a universal sound in order to improve safety throughout the industry, specific applications include helping those with sight loss identify scooters. Research will begin in London in 2022 and build upon previous research to narrow down an option that takes into account a variety of neuro-diverse conditions. Other news in micromobility include, Neuron Reinforces Helmet Safety As New Report Underlines eScooter Risks and After Only 4 Years, This Texas-Based Electric Scooter Company Just Sold Its Millionth Scooter.
🐦Airlines Face Unexpected Safety Issue in Pandemic: More Bird Strikes. Yes, you read that right: there’s correlation between bird collisions and COVID. Birds migrated to quiet airports in the absence of global travel due to COVID. Now that the planes are back, the birds have become a legitimate safety concern for pilots. Last year a Spirit Airline engine caught fire after a bald eagle flew through. From April to October 2020, strike rates increased by as much as 17% across a sample of US airports.
Fundraises and M&A 💸
💥 Amitruck Raises $4M Led By Better Tomorrow Ventures. Amitruck is building Africa’s digital logistic marketplace, connecting shippers with transporters. Additional investors include Dynamo Ventures, Rackhouse Venture Capital, Flexport Inc, Knuru Capital, Launch Africa Ventures, and Uncovered Fund. The funds will be used to strengthen its technical, operations, and sales team to lay ground for its entry into Tanzania and Uganda.
Cargofy Raises $2M Led By JKR Investments Group. Cargofy is a logistics startup that allows truckers to optimize their routes and take extra cargo on the way. In 2014, Stakh Vozniak, CEO of Cargofy, initially created an Uber-like service for urban trucking. However, in 2017, Stakh pivoted the business model and launched Cargofy, where transportation was between companies, not people. The funds will be used to scale it’s platform and expand product functionality.
Leap24 Raises €4.25M Led By Yard Energy Investments. Leap24 builds hyper charging stations for delivery vans and trucks. The company believes that in 2025, 20 large Dutch cities will introduce a zero-emission urban distribution zone, which will require corporate users to have locations to quickly charge their EVs. The funds will be used to open 240 charging stations at 40 locations in the Netherlands and expand to Northwestern Europe.
Lula Raises $5.5M Co-led by Ripple Ventures, Outlander VC, and Up Partners. Lula provides convenience stores the tools to manage their entire delivery operations. Additional investors include SOSV, Simple Capital, NZVC, Stonks.com, EasyPost, Park City Angels, Alumni Ventures, Broad Street Angels, and Ben Franklin Technology Partners. The funds will be used for US expansion.
Resonant Link Raises $9.3M Led By The Engine. Resonant Link builds wireless chargers to accelerate electrification in robotics, material handling, and EVs. Additional investors include Volta Energy Technologies, Emerson Collective, Scout Ventures, Urban Us, and FreshTracks Capital. The funds will be used for hiring, product development and customer deployment.
Soelect Raises $11M Led By Lotte Ventures. Soelect develops and manufactures solid-state battery components designed for the next generation of EVs. Additional investors include GM Ventures and KTB Networks. The funds will be used to grow its team and scale manufacturing.
Zero Grocery Raises $11.8M Led By Sway Ventures. Zero Grocery provides zero-waste grocery delivery service. Since its last funding round, the company has doubled its customer base, while also growing average order values and retention rates. The funds will be used for geographic expansion.
Truck It In Raises $13M Co-led By Global Founders Capital and Fatima Gobi Ventures. Truck It In is a logistics startup focused on simplifying road freight in Pakistan. This seed round is the largest of its kind in the MENAP (Middle East, North Africa, and Pakistan) region. The funds will be used to expand its business, grow its team, and accelerate product development.
Melonn Raises $20M Led By QED Investors. Melonn is a Colombian startup that provides fulfillment and software services to SMBs in LATAM. This round comes less than a year after Melonn raised a pre-seed round from NFX. The funds will enable Melonn to scale in additional LATAM markets.
Loadshare Networks Raises $40M Led By Tiger Global. LoadShare Networks provides logistics services in India including order fulfillment solutions, first-mile, line-haul, last-mile deliveries, and third party fulfillment. Additional investors include Filter Capital, 57 Stars, CDC Group, and Matrix Partners India. The funds will be used for hiring, building logistics technology and adopting more electric vehicles into its fleet.
Lunchbox Raises $50M Led By Coatue. Lunchbox is developing online ordering tools for enterprise restaurant chains and ghost kitchens. It processed over $3M in orders in 2021 from more than 970K guests. The funds will enable Lunchbox to scale its platform to continuously innovate on their product.
Dott Raises $70M Co-led By abrdn and Sofina. Dott is a micromobility platform that provides eScooters and eBikes in Europe. They currently operate a fleet of over 40K scooters and 10K bikes in 36 cities across Belgium, France, Germany, Italy, and Poland. The funds will enable Dott to accelerate the rollout of its new eBike services, continue product development, and expand to new markets.
Superpedestrian Raises $125M Series C. Superpedestrian is a transportation robotics company developing core technologies for micro mobility. Investors in this round include Jefferies, Antara Capital, the Sony Innovation Fund by IGV, FM Capital, Spark Capital, General Catalyst, and the Citi Impact Fund. The funds will be used to deploy its Pedestrian Defense safety system at scale.
RenoRun Raises $142M Co-led By Tiger Global and Sozo Ventures. RenoRun is an eComm platform for construction and building materials. This Series B round is a significant jump from the $17.1M Series A that RenoRun announced in November 2019. The funds will be used to expand to new markets and add new product features.
Loadsmart Raises $200M Led By Softbank Latin America Fund. Loadsmart is a freight technology company that leverages automation to help customers price, book, and ship goods. This Series D financing round puts Loadsmart at a valuation of $1.3B. The funds will be used to expand its service offerings.
TTTech Auto Raises $285M Led By Aptiv. TTTech Auto designs software that auto manufacturers use to manage data flowing from sensors and safety systems. Audi also participated in this round investing a total of $57M. The funds will enable TTTech Auto to expand in Asia and accelerate product development.
Cruise Raises $1.35B from SoftBank Vision Fund. Cruise is a self-driving service designed for cities. Earlier this week, Cruise announced they were opening up its service in San Francisco to the public. The funds from Softbank come on top of its initial $900M investment in 2018.
Anduril Acquires Dive Technologies. Anduril is transforming US and allied military capabilities with advanced technology. The acquisition of Dive Technologies expands Anduril’s suite of autonomous vehicles, extends its unmanned capabilities to the undersea domain, and accelerates the company’s strategic growth. The terms of the deal were not disclosed.
Huboo Acquires Roseto.io and Parent Company New Vision. Huboo helps online businesses grow by handling their eComm order fulfillment needs. This deal will see Huboo incorporate Roseta’s eComm integration software to help its customers integrate with multiple online sales channels and marketplaces on a global scale. The terms of the deal were not disclosed.
Solera To Acquire Spireon. Solera is a provider of integrated vehicle lifecycle and fleet management software. The acquisition of Spireon will enable Solera to expand its customer base and provide new solutions that benefit customers. The terms of the deal were not disclosed.
SPAC Radar 📡
Kalera In $375M Deal With Agrico Acquisition Corp. Kalera is a vertical farming company that produces leafy greens, microgreens and fresh herbs. This deal will result in Kalera becoming a publicly listed company on NASDAQ and delisting from Euronext Growth Oslo exchange during Q2 2022. Agrico, the SPAC that Kalera intends to merge with, currently has $146.6M cash in trust.
Company Building 🛠️
The Durability Formulas. To be clear, there’s never a sure fire formula for business success but this framework is interesting to consider. We pride ourselves in helping founders build durable businesses (we might call it, focusing on developing the fundamentals) and growing thoughtfully.
How to Stop Procrastinating. If this is you or someone else in your business, read it the full way through. It’s worth it.
Index Ventures: OptionPlan. Shared from the resources in our upcoming Dynamo Founder Portal (for portfolio companies), this is a handy reference for those wondering what a reasonable option grant is.
Who's Hiring? 👩💻
Data Scientist at Verusen in Atlanta, GA (remote ok).
Cloud Software Developer at Coros in Mountain View, CA (remote ok).
Strategic Client Success Manager at Factored Quality in Brooklyn, NYC (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.