Dynamo Dispatch (03/08/21)

Issue 142 | Ocean Insights, Deliverr, Ox

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 💭

Busy week! Read on to see what went down.

Lately, we’ve heard a lot of startups commend us for being consistent with this newsletter and appreciate the support. Equally, startups should use this as an easy way to connect with us. You don’t need to find an intro or write a great cold email - be shameless and hit reply to schedule a call with someone on the team. Also, you can find us at hello [at] dynamo [dot] vc.

Thank you to Minda and Chris for the startup referrals this week.

We Are Dynamo,

Santosh, Ted, Barry, Jon, Rachel, and Emily

Note: please add “dynamo@substack.com” to your email client, so you don’t miss future issues due to aggressive spam filters.

Supply Chain 📦

Walmart Will Spend $350B on Local Sourcing. Over the next decade, Walmart will spend billions on supplies produced, grown, or assembled in the US to support small and diverse businesses while reducing carbon emissions. They also plan on working with manufacturers, academics, and governments to develop their “American Lighthouses” program that will pinpoint barriers to US production with the goal of returning manufacturing to US shores long term. Related, The History of Megafactories with Joshua Freeman.

🌟US Xpress Speaks on Variant at Length. US Xpress, Eric Fuller detailed the Variant initiative that applies digital brokerage technologies to a new asset-based carrier. The result is 50% less driver turnover due to stable miles, improved utilization, and reduced insurance costs that can total a near 10% in near-term margin. In LTL, Trucking Boom Prompts Old Dominion to add 1.2K drivers and dockworkers as Logistics Industry Expansion Continues in February.

US Shippers and Truckers are Searching for the Right Freight ‘Fit’.  Carriers are offering their capacity to shippers whose freight “fits” their own network in terms of the right shipments in the right lanes and at the right price and margin. Shippers are struggling with the fact that carriers are turning away business, and need to brace for months of tight truck capacity and higher rates in both the truckload and LTL market. Related, Interest is Growing in Private Fleet Conversion.

Germany is Making Firms Responsible for Policing Abuses by Global Suppliers. Germany will require companies to screen suppliers for environmental and human rights violations, but some corporations are saying it will be hard to enforce and could result in less internal competition. The bill is part of a broad movement in Europe to ensure that European legal, environmental, and workers’ rights standards are upheld by outside suppliers. Are you building in this area, reach out, we would love to talk to you.

Greensill Faces Possible Insolvency After Credit Suisse Suspends Investment Funds. Greensill specializes in supply-chain finance, a form of a short-term cash advance that lets companies stretch out the time they have to pay their bills.  Greensill packages securities that give investors a higher return than they could get from bank deposits, with Credit Suisse’s funds being a major buyer of those securities. Credit Suisse froze the funds because some assets in them are “currently subject to considerable uncertainties with respect to their accurate valuation,” according to a notice the bank sent to investors. As of late Friday, it is expected that Greensill will file for insolvency in the UK.

The Global Cargo Traffic Jam Could Last Into 2022. Traffic jams on the world’s road, air, and sea corridors could continue into next year, increasing shipping costs. 

This comes as long-haul trucking spot rates have jumped 35% and air freight prices have doubled.  Maritime rates have been hit especially hard, as the cost of shipping a 40ft container from China to California has nearly quadrupled since last year. Also on the open ocean, Void Sailings Could be a Signal of Soaring Rates on the Transatlantic and the Maersk Essen Arrives in Los Angeles 6 Weeks After Container Loss.

Global Air Cargo Demand Returned to Pre-Covid Levels in January. In January demand was up for air cargo by 3% compared to December 2020, however capacity on the passenger side sank by 5%. This should be an indication to governments that they need to share their plans for travel so the industry has clarity in terms of how soon more capacity can be brought online. Related, Air Cargo Rates are Climbing Sharply Again.

FedEx Commits to Carbon-Neutral Delivery Operations by 2040. To help reach their goal, FedEx is designating more than $2B of the initial investment in EVs, sustainable energy, and sequestration. Along with electrifying the global parcel pickup and delivery fleet, they will establish the Yale Center for Natural Carbon Capture to advance sequestration solutions. As a note, sequestration is the process of capturing and storing atmospheric carbon dioxide. In the north, Schneider Sets 2035 Net-Zero-Emissions Goal for Facilities and in India, Flipkart and Amazon Electrify Fleets with EVs from Mahindra Electric.

eComm Fulfillment Squeezes Retailers’ Profit Margins. The eComm uptick over the last year has redefined how retailers should approach leveraging their brick and mortar store workers, locations, and inventories. In order to ease the transformation, stores should address inefficiencies on store-based fulfillment, equipped associates with digital touchpoints like texts for customers, provide a frictionless shopping and return process, and keep in-store inventory management just as accurate as warehouse counts for better curbside pickup. As analysts say Leveraging Reverse Logistics is Key to Profits this Year in eComm and The eComm Boom is Changing Peak Shipping Periods. 

Mobility 🚗 

🌟📊EVs Require Less Raw Materials than Petrol and Diesel Cars. EVs consume  300-400x less materials during their lifetime than an internal combustion engine vehicle, and will use less as battery technology evolves. The average fossil-fuel car burns the equivalent of a stack of oil barrels 25 stories high, whereas EVs waste only around 30kg of metals if you take into account the recycling of battery materials, which is roughly the size of a football. Related, Toyota Announces Hydrogen Fuel Cell Module. 

It's Time to Invest in LEVs. Although EV ownership is growing, we still need to reduce vehicle miles driven by 20% by 2030 to achieve the less than +1.5°C climate goal. LEVs, electric two- and three-wheelers, are responsible for more avoided oil consumption than any other vehicle category. Given their unparalleled decarbonization potential, LEV charging should be a top consideration for federal agencies.  Also, Lime Will Spend $50M on eBike Expansion.

First Footage of Vehicle in Flight by Joby Aviation Air Taxi. The company hasn’t operated in secret, but till now, they have yet to make any announcements about product development. Joby recently announced a SPAC merger with Reinvent Technology Partners, valuing the company at just over $5.7B USD. The merger paves the path to bring Joby public, which may be the final boost that the Joby Aviation air taxi needs to take to the skies by 2024. Speaking of air travel, Software is Eating Business Travel. 

'World's Highest-Capacity' Solid-State Battery Developed in Japan. The high-performance solid-state battery features a capacity of 1K mAh, roughly seven times as much as prior models, and can operate from 100°C to minus 40°C.  Solid-state batteries have a lower risk of fires and more enhanced energy efficiency than conventional lithium-ion batteries and are considered to be the next-generation power source. All the while, Fisker Abandons Solid-State EV Batteries.

Huawei Will Become the Next Tech Manufacturer to Make EV Cars. The Chinese-based company, known for its smartphones, is said to be in discussions with at least two car makers about manufacturing EVs under the Huawei brand. The interest in cars is in part to investigate other business opportunities in response to sanctions imposed by the US that have hurt Huawei phone sales. Meanwhile, Xiaomi Denies Rumoured In-House Car Development while EVs are Expected To Reach 58% of New Car Sales in China by 2030.

Rumor: Cruise In Talks to Buy the AV Technology Startup Voyage. Cruise, the AV company majority-owned by GM, is in talks to acquire Voyage, an autonomous technology startup that operates in retirement communities.  If an agreement is struck, it would merge Cruise’s engineering and software capabilities with Voyage’s presence in the retirement community market, which is well suited for a driverless taxi business. In the realm of safety, US Roads Were More Dangerous in 2020 Despite People Staying at Home.

VW's EV Stacks up Well Against Tesla in UBS Teardown. Estimates show that Tesla will sell 2.3M EVs in 2025, with VW selling 2.6M. However, Tesla’s operating profit will be nearly three times that of VW’s as UBS forecasts $20B in annual profits for Tesla whereas Volkswagen could make $7B that year. Elsewhere, Jaguar Land Rover Quality Issues Cost them $100K in Sales Annually.

Automotive Cells Company Seeks Contracts with Other Automakers. ACC, the battery joint venture of Stellantis and Total, is seeking to build EV batteries for other automakers when it starts production in 2023. The EU estimates that demand for mobility sector batteries in automakers will rise from about 40 GWh in 2020 to 170 GWh in 2025. The EU has prioritized EV battery production as being in the bloc's strategic interest, with the aim of being self-sufficient in 2025. Meet, Ample Provides Automated Battery Swaps for EVs.

Fundraises and M&A 💸

ePlane Company Raises $1M in Seed Round Led by Naval Ravikant.  The ePlane Company VTOL eplanes can be used for faster door-to-door commute within cities and moving cargo in remote and rural areas. This new round of seed funding will help the company develop its engineering team for building IP. 

Fillogic Raises $2.5M in Seed Round Led by Food Retail Ventures CEO James McCann. Fillogic helps retailers by offering forward-staging inventory, receiving and fulfilling high-demand products, and unlocking expedited shipping, including same-day, for ground prices. The funding will expand the Fillogic Hub Network nationwide to key markets. It will also support team growth and further develop its platform, including its Delivery Partner Network and proprietary routing technology.

Advotics Raises $2.75M led by East Ventures. To help make logistics more efficient for its clients, the Indonesian supply chain startup offers SaaS solutions to monitor almost their entire supply chain, from warehouse inventory to generating delivery routes for drivers. The company’s new funding will be used to launch an online-to-offline system for SMEs and grow its sales team.

Venus Aerospace Raises $3M in Seed Round. The Houston, MA-based high-speed transportation startup is building out its Mach 12 hypersonic aircraft designed to travel at the edge of space, allowing passengers to go from Los Angeles to Tokyo in one hour. The company intends to use the funds to develop reusable and efficient advanced rocket engines and aerodynamic technologies.

Full Speed Automation Raises $3.2M Seed Round Led by HCVC. Full Speed Automation is VITESSE, the first no-code automated manufacturing platform. The funds will be used to accelerate the development of the innovative platform. 

Ox Raises $3.5M in Seed Round Led by MaC Venture Capital and Cortado Ventures. Ox is using AR to help sellers improve the order picking process and keep pace with eComm growth. The company plans to use the funding to grow its operations and expand its current team of 11. 

URB-E Raises $5M in Series A Led by UBS Group. The compact container delivery network replaces trucks with bikes and saves a large amount of space in crowded urban environments. The company intends to use the funds to scale its local delivery networks further.

Rollick Raises $8.5M  Led by Sandbox Insurtech Ventures and TechNexus. Rollick is a Texas-based online marketplace for recreational vehicles that launched a “Buy From Home” program across its network, allowing customers to make purchases safely without going into a dealership. The funding will be used to expand on these existing programs nationwide and create new ones. 

Aero Raises $20M in Series A Led by Keyframe Capital. Aero Technologies is a San Francisco, CA-based next-generation premium air travel company. The funds will be used to propel future flight paths and growth in the US. 

Bolt Raises $24M by IFC. The ride-hailing service has grabbed business from Uber in major African cities and Eastern Europe. They aim to use the money to improve technology to disrupt the transportation sector, making it better for the environment, safer, and more affordable.

Postmates' Robotics Splits to Become Serve Robotics and Raises $50M.  The funding round likely injected a $50 million investment into Serve Robotics, with 60 employees in San Francisco and become independent of Uber. Serve will continue to design, develop and operate autonomous delivery robots that navigate sidewalks in urban markets, and will pursue new partnerships. Also, Albertsons Companies Launches Pilot Program Using Delivery Robots. 

Flink Raises $52M in Seed Round Led by Target Global, Northzone, Cherry Ventures, and TriplePoint Capital. Flink is a Berlin-based on-demand grocery delivery service. They will use the new financing to expand further within Germany and into additional European markets. 

Fluid Truck Raises $63M Led by Bison Capital. Fluid Truck is an app-based platform that aims to take away the difficulties associated with owning or leasing commercial vehicles by helping mid-mile and last-mile delivery companies remotely manage an on-demand rental fleet on the web or mobile app. The money will be used to expand its truck-sharing platform. 

Turntide Technologies Raises $80M Led by Breakthrough Energy Ventures. The California-based intelligent motor system maker recently agreed to acquire Riptide,  a cloud-based building automation software platform. The company intends to use the funds to expand the development and production of its Smart Motor System and accelerate the deployment of Riptide. 

Deliverr Raises $135M in Series D Led by Coatue. The San Francisco-based fulfillment platform aims at providing merchants with a fast and cost-effective delivery method. The funding allows Deliverr to expand warehouse capacity and evolve their logistics technology to be even quicker, hassle-free, and cost-effective for merchants. 

SiCepat Raises $170M in Series B. The Indonesian company provides last-mile deliveries for small merchants and large eComm platforms and covers warehousing and fulfillment, middle-mile logistics, and online distribution. The money will be used to grow in the Indonesian market and potentially explore expansion to other markets in Southeast Asia. 

Skydio Raises $170M in Series D Led by Andreessen Horowitz. Skydio, a California-based autonomous drone manufacturer, has become the first US drone maker with a valuation of more than $1B. The startup intends to use the cash to help it expand globally and accelerate product development.

Rohlik Group Raises €190M Led by Partech. Rohlik is a Czech Republic-based online grocery business. The company intends to use the funds to accelerate its expansion in its existing markets and launch in Germany and other international markets and continue to invest in technology and operating capabilities. 

Volocopter Raises €200M in Series D Funding. The German eVTOL developer is known for its wide circular design that sits where the rotor on a helicopter would be. The funds will be used to help certify and launch its battery-powered city air taxi, VoloCity.

Loggi Raises $205M Led by CapSur Capital. The Brazilian logistics startup aims to transform the industry by using a  “logistics-as-a-service” platform, useful for eComm and local businesses struggling with delivering and transporting goods. The firm seeks to expand its distribution footprint and shorten delivery times amid an eComm boom in South America's top economy. 

Instacart Raises $265M Led by D1 Capital and Valiant Peregrine Fund. The San Francisco-based grocery delivery is now valued at $39B, more than double what it was just six months ago. Instacart said it would use the money to expand corporate headcount by 50% in the first half of 2021 and invest in Instacart Marketplace, Instacart Advertising, and Instacart Enterprise.

Dana Acquires Pi Innovo. Pi Innovo is a leader in embedded software solutions and electronic control units.  Dana previously held a non-controlling interest. The deal adds a substantial library of turnkey EV application software, vehicle level controllers, and auxiliary controllers. 

project44 Acquires Ocean Insights. The Chicago logistics tech company project44 has scooped up the German ocean freight intelligence company that provides tracking and analytics to help companies keep tabs on their containers in real-time. The acquisition further expands project44's logistics software to the seas. 

SPAC Radar 📡

Lime in $510 Deal with Evercore SPAC. These discussions come as scooter firms, including the Uber-backed eScooter startup Lime, try to bounce back from the damage wrought over the last year by the coronavirus pandemic. The potential deal involves the investment bank Evercore as Lime explores an attempt to go public via a blank check company. 

Flipkart Deal with SPAC. The Indian eComm company, backed by Walmart, is weighing plans to go public. The talks for a deal with a SPAC are at a very early stage and could fall apart as no plans have been finalized yet. The news comes as a number of Indian startups are considering the SPAC route which involves less regulatory scrutiny and gives companies more certainty over the valuation that will be attained and the funds that will be raised

Bukalapak Deal with SPAC. The Indonesian eComm company backed by Microsoft is in preliminary talks with several blank-check companies and is working with investment banks for the listing. The company could also consider listing a small part of its business in Jakarta, the capital of Indonesia,  prior to completing the deal with the blank-check firm for the US IPO.

Company Building 🛠️

What Makes A Good Product Company. “The product strategy tells us which problems are the most important and is itself a major topic. One of the problems with product strategy is that people think it’s like step by step, ABC, and you’re done. But it’s much, much harder than that. This gets again to the distinction between those good product companies and the rest, because more than anything else, great product strategies require strong product leaders.”

Making Your First Marketing Hire. We’re working with a portfolio company now to make their first marketing hire. Like all “first hires” in a given function, this requires a combination of skills. Out of the 11 qualities listed, definitely agree on points related to entrepreneurial drive, button clicker, and strong writing skills.

The Four Types of Startup COOs. This hire can mean different things based on who you ask. A great drill down of the types of archetypes you find among COOs and an exploration of what might help your startup and why. 

Who's Hiring? 👩‍💻

Senior Software Engineer at Token Transit in San Francisco, CA (remote ok).

Junior Product Designer at Zeelo in London, England.

Account Executive at Vizion in Atlanta, GA (remote ok).

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.