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 đ
Good morning! The S&P just dropped 7% within the first 15 minutes of the day triggering the circuit breaker which puts a pause on trading activity. Markets have been rattled by the threat of coronavirus thatâs continuing to hamper cross border trade flows but driving consumers to shop online and stock up on rations at outlets such as Walmart and Costco. As a result, national and regional supply chains continue to perform as businesses work through existing inventories to fulfill demand.
Adding fuel to the fire (pun intended), uncertainty around the energy markets, namely the wrangling between Russia and Saudi Arabia only hurts in the short run. Weâre mindful that cheap oil makes the ROI for alternative energy more difficult which could hamper efforts for decarbonization. Even if the price dislocation is for a short period of time, the ability to build up inexpensive inventory would help some nations âkick the canâ on electrification. We do note that existing supply chain transportation providers would benefit from lower energy costs as freight demand slows.
We are not expert epidemiologists so will refrain from suggestions around the virus and focus on business building and financing through macroeconomic softness. Great businesses will continue to be founded and built in such an environment and weâre excited to support Founders on the journey. Our general thoughts are best distilled in five points: ensure the battalion is safe; expect the unexpected; cash is king/queen; embrace optionality; stay positive.
We Are Dynamo,
Santosh, Ted, Barry, and Jon
Note: please add âdynamo@substack.comâ to your email client so you donât miss future issues due to aggressive spam filters.
Supply Chain đŚ
Box Carriersâ Bill for Volumes Lost to Coronavirus Nearing $2B. Research from SeaIntelligence Consulting estimates that container lines have now lost 1.9M TEU in volumes since the outbreak began. While the number of blanked voyages have finally declined this past week, industry experts still warn the ripple effects are not yet over. Meanwhile, shoppers stocking up on goods domestically has led to Trucking Volumes Spike Despiteâ Because ofâCoronavirus Concerns. Related, IHL Looks at Coronavirus Impact on Retailersâ IT spending.Â
đAmazon Opens Smaller Warehouses Near Big U.S. Cities for Faster Delivery Times. The additional infrastructure will expand Amazonâs same-day delivery options from 20,000 items to more than 100,000 products in Phoenix, Philadelphia, Dallas, and Orlando. The option is free for Prime members who spend at least $35, but will otherwise cost $12.98 per order -- a price likely to encourage sign ups. Related, Target Reports Mixed Fourth Quarter, but Notes Same-Day Services Grew More than 90% in 2019.
The Final-Mile Headache Gets More Painful for Walmart as Skipcart Quits. Following its aborted partnerships with Uber and Lyft, Walmart loses another last-mile grocery courier in Skipcart. Despite handling more than 50,000 deliveries per month for the retailer, Skipcart was losing money âhand over fistâ according to chief executive Ben Jones. Meanwhile, Fear of the Coronavirus Is Driving a Surge in Grocery Delivery Services.
TuSimple Expands Autonomous Trucking Program with UPS. UPS announces the decision to increase its pilot with autonomous trucking company TuSimple to 20 trips per week. Until now, the pilot has run between Phoenix and Tucson, AZ; the additional 10 trips will introduce a new route to El Paso, TX.
Freight Tracking Remains Unsolved. According to a recent survey of 1,700 companies, 81% do not have full visibility into their supply chains and 54% have no visibility at all. Dynamoâs Matt McHugh discusses the shortcomings of current freight monitoring solutions and what technology is still needed to overcome the interoperability hurdle.
The Coronavirus Will Reveal Hidden Vulnerabilities in Complex Global Supply Chains. The Brookings Institute warns that vulnerabilities in nodes within global economic networks might only be realized upon their sudden failure. However, using the current shock to map supply chains and implement strategic redundancies is likely to bring forth alternative approaches that could ultimately prove more robust in the long term.Â
H&M Opens Up Global Supply Chain to Rivals in Green Push. The Swedish retailer launches a new venture called Treadler, allowing midsize brands to tap into its supply chain. In line with its goal of becoming carbon-neutral by 2030, the sustainability strategy will give brands access to the fashion giantsâ suppliers, production facilities, and logistics network. Related, IKEA Seeks to Cut Costs, Waste With Smarter Approach to Customer Returns.As for retailers pursuing different priorities,Amazon Nixed âGreenâ Shipping Proposal to Avoid Alienating Shoppers.
Mobility đ
Hackers Can Clone Millions of Toyota, Hyundai, and Kia Keys. Flaws in the DST80 encryption system used by the OEMs allow criminals to easily lift cryptographic data from fobs. Coupled with some old-fashioned hot-wiring, these vulnerabilities allow criminals to impersonate the key and start the carâs engine.
đAirlines Could Lose $113 billion in Passenger Revenue Due to Coronavirus, IATA Says. The International Air Transport Associationâs best case scenario is now $63 billion in lost revenue, assuming a V-shaped recovery in March. Should the virus continue spreading broadly, losses are expected to exceed $100 billion -- roughly one-fifth of worldwide passenger revenue. Related, Airlines Face $100 Billion-Plus Virus Hit, Discounts 'Wouldn't Do Any Good'.
đThe Frequency and Characteristics of Improper Scooter, Bike, and Car Parking: Report. Despite concerns across major American metros about âscooter clutter,â new research by leading urban planners finds that motor vehicles are the biggest culprit of parking noncompliance. Of the 3666 transit modes that were observed, cars were found to impede access far more (24.7%) than bikes (0.3%) and e-scooters (1.7%). Another topic for urbanists to consider: Pandemics Are Also an Urban Planning Problem.
Americans Spend 15%+ of Their Budgets on Transportation Costs - These US Cities Are Trying to Make It Free. Kansas City follows in the footsteps of Corvallis, OR and Olympia, WA to become Americaâs first large city to implement zero-fare public transportation. Supporters point to the fact that fares in most transit systems comprise less than 10% of revenue and a switch to a free model reduces operating costs for collection. A related opinion on improving mass transit: It's Time for Some Cheap and Boring Transportation Solutions. As for a new solution boosting last-mile mobility, L.A. Metro to Launch Ride-Hailing for Short Trips
Uber Prepares to Pay US Drivers Exposed to Coronavirus. Following similar moves in Mexico and the UK, the ridehail giant affirms it will compensate American drivers affected by Covid-19. Those who are quarantined or diagnosed with the virus will receive compensation up to 14 days, according to a recent company email. In other news regarding driver compensation (and classification), Uber Ruling in France Boosts Gig Workersâ Rights.
GM Lays Out Ambitions for Electric-Vehicle Lineup to Rival Tesla. Chief executive Mary T. Barra announces plan to sell a million electric vehicles annually by 2025. According to Barra, the new line of EVs would be profitable just shortly after the first models were introduced. Taking a similar tact towards electrification, Ford Confirms US-built Electric Cargo Van under Its $11.5 Billion Plan
Fundraises, M&A, Talent đ¸
Waymo Raises $2.25B to Scale Up Autonomous Vehicles Operations. The massive injection closes the Alphabet subsidiary's first round of funding. Silver Lake, Canada Pension Plan Investment Board, Mubadala Investment Company, Magna International, Andreessen Horowitz, and AutoNation all participated.
Spinny Raises $43.7M Series B Led by the Fundamentum Partnership. Also participating were General Catalyst Partners, KB Financial Group, Accel, SAIF Partners and Alteria Capital. The startup is among the leading Indian platforms for selling used cars online.
Five raises $41 million Series B from Trustbridge Partners, Direct Line Group and Sistema VC. The UK-based startup has developed a cloud-based platform to assure the safety of self-driving software. Lakestar, Amadeus Capital Partners, Kindred Capital and Notion Capital also participated in the round.Â
HaulHub Raises $30M Series B Led by T. Rowe Price Associates and Durable Capital Partners. The Boston-based startup provides a platform for construction companies to manage material movement with real-time tracking and automated scheduling. The startup looks to bring on additional engineers and operational staff.
Bolt Mobility Raises $30M Series A Led by Rokk3r Fuel ExO. Among the executives of the Miami Beach-based e-scooter startup is world-record-holding track star Usain Bolt. With the new injection, the team plans to kick start expansion beyond South Florida.
WhereIsMyTransport Raises $7.5M Series A Led by Liil Ventures. The startup maps public transport routes in emerging markets, having already documented 50,000 km of routes in 39 cities across Africa, Latin America, and Southeast Asia. The fresh capital will be applied to further expansion.Â
Swedenâs X Shore Raises âŹ5 million Led by Peter Dahlberg. Emphasizing sustainability, the Swedish startup has developed all-electric, silent boats for personal recreation. The new funds will support the growth of the team, facility expansion, and product development.Â
BoxLock Raises $4.5M from DHL, TNT, uShip, Aramex, InXpress and Maersk Executives. The Atlanta-based startup offers smart padlock devices that thwart porch pirates and support couriers' successful delivery rates. CEO Brad Ruffkess had previously been featured on hit TV show âShark Tankâ in 2018 but failed to secure an investment.
Nikola to Go Public with $3.3B Valuation. The fuel cell Class 8 startup builds hydrogen-powered big rigs. Following a merger with publicly-traded VectoIQ, the company plans to list on the NASDAQ under âNKLAâ in Q2 of this year.Â
Company Building đ ď¸
Coronavirus: The Black Swan of 2020. âHaving weathered every business downturn for nearly fifty years, weâve learned an important lesson â nobody ever regrets making fast and decisive adjustments to changing circumstances. In downturns, revenue and cash levels always fall faster than expenses. In some ways, business mirrors biology. As Darwin surmised, those who survive âare not the strongest or the most intelligent, but the most adaptable to change.ââ
đZapier Guide to Remote Working. Many companies are offering or mandating remote work for their staff as the threat of coronavirus remains. This guide from Zapier is a worthwhile read/can help ease the growing pains.
The YC Guide to Raising a Series A. In light of the coronavirus, some founders might determine that they would like to accelerate their fundraising plans or are looking for perspective on closing out an outstanding fundraising process. This is a worthwhile primer.
Who's Hiring? đŠâđť
Simulation Engineer at Gatik AI in Toronto, ON.
DevOps Engineer at SVT Robotics in Norfolk, VA.
Director of Engineering at Plus One Robotics in San Antonio, TX.
Check out other jobs at Dynamo portfolio companies.
đĽ Seen any interesting startups or have any tips for the Dispatch? Introduce us.
â¤ď¸ We would love your support. Please forward to friends and share on social media.
đď¸ If you were forwarded this and found it interesting, please sign up.
đ Check out Dynamo's podcast series, The Future of Supply Chain.