Dynamo Dispatch (03/29/21)

Issue 145 | LGN, Baton, FourKites

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 💭

The blockage at the Suez once again thrusts supply chain to the forefront of conversations. Who would’ve thought people would care so much about steamships and canals? 

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 📦

Suez Canal Blockage is Delaying An Estimated $400M an Hour in Goods. The stranded container vessel in the Suez canal is holding up an estimated $400M an hour in trade based on the approximate value of goods that goes through the canal according to the shipping and data company Lloyd’s List. Many companies are still dealing with pandemic-related supply chain issues. This delay will likely cause additional challenges ranging from the availability of containers to restocking issues due to extended travel times. Related Stranded Suez Canal Ship Owner, Insurers Face Millions in Claims while shippers are now looking to Vasco da Gama for inspiration as Container Ships Steer toward Longer Route Along the Cape of Good Hope to Avoid Suez Canal. 

Where Are All the Containers? The Global Shortage Explained. Over the past year, Asian and North American countries have been being hit by and are recovering from the COVID-19 pandemic at different rates. This has led to an imbalance in shipping containers. When Asia was facing lockdowns and North America was open, Asia could not retrieve their empty shipping containers and when Asia reopened before North America, North America could not send empty containers back fast enough. On top of this, Asian trade routes have become so lucrative that shippers won’t wait for empty containers to be returned. Also, check out Dynamo Portfolio Company, Vizion’s piece on Reliability and Ocean ETAs.

Amazon Faces Growing Worker Pressure in the Shadow of Alabama Union Vote. On March 29, Amazon warehouse workers in Bessemer, Alabama, will vote on whether to unionize. None of Amazon’s 800K employees are unionized, but a union would give workers more power to negotiate with the eComm giant on pay and healthcare benefits. In other locations, hourly Amazon workers are gathering petition signatures, discussing potential strikes, and consulting with other unions about possible demands. Across the pond, investors are raising concerns about the condition of gig and hourly workers as Deliveroo Hit By Investor Revolt Ahead of London IPO. 

US Post Office Calls for Higher Prices, Slower Mail, and More Packages. This week Postmaster General Louis DeJoy released proposals that would get the agency to a breakeven point over the next decade. Dejoy wants to cut costs and help the agency compete for more eComm parcels. Some changes include less use of expensive air transport and more uses of cheaper trucking. These changes could slow the delivery of first class mail. This plan will impact small eComm packages the most and that has led some to say that DeJoy's USPS Plan Could Harm Online Sellers Struggling Against Amazon. 

CBRE: Warehouse Space is Limited, Expensive, and Likely to Stay That Way for Some Time. Unless you are Amazon, the number one buyer of big box space, it has been a tough year to rent industrial warehouses and fulfillment spaces. Rent growth is expected to reach 10% this year and first-year rents have doubled in some locations such as Los Angeles. This is due to increased competition since everyone from 3PLs to brick and mortar retailers to Amazon are racing to fulfill a surge of pandemic-related orders. Related eComm Boom Keeps Rents High In Undersupplied Warehouse Market , and Why LTL is Perfectly Positioned to Take eComm Market Share

Inventory Levels Threaten Retailers Spring and Summer Sales. Inventory levels are at their lowest since 2012, while wholesale and manufacturing levels have changed by less than 1% in the past year. The data shows that the decline in inventory levels is due to an increase in demand. The demand for goods produced by manufacturers, retailers, and wholesalers, increased by 3%, 13%, and 6% this year. Elsewhere, Nike’s Imports Drop 39% Amid Port Congestion Straining Inventory while in consumer staples, Toilet Paper is the Next Likely Victim of the World’s Container Crisis.

DHL Steps Up Its Bid to Go From Yellow to Green With New Emissions Targets. DHL will invest €7B in climate-neutral logistics by 2030 as a part of signing up for the Science Based Targets Initiative (SBTi). The SBTi insists that companies follow a rigorous science-based approach to decarbonization and continually update their approach to meet the Paris Climate Agreement’s goals. DHL said that its investment was earmarked for research into alternative aviation fuels, the expansion of its zero emission fleet, and carbon neutral buildings. In other green logistics news, Schneider's Plan to Reduce Carbon With Focus on Intermodal as TRATON Goes Almost All In on Truck Electrification.

🌟Canadian Pacific, Kansas City Southern Merger to Redraw Class I Railroad Map. Canadian Pacific’s proposed acquisition of Kansas City Southern will unite the two smallest Class I railroads and create the only North American system that will operate in the US, Canada, and Mexico. This is a classic end-to-end merger since the railways currently interchange in Kansas City, the only place where their systems meet. This merger will also tie together automotive cities in the Midwest, Canada, and Mexico. The railroads expect to gain the necessary regulatory approval in 2022.

General Mills Sees Mid-Single Digit Freight Cost Inflation. In its earnings call, General Mills reported seeing mid-single digit freight cost inflation from a quarter going from December to February. As demand has risen, the company has needed to secure capacity in more lanes, utilize the spot market more often and at higher rates, and use external capacity more heavily. This increase in costs has hurt the company’s gross margins. BTW, that coffee each morning could be getting more expensive as Coffee Supply Chains Show Signs of Strain. 

Mobility 🚗 

EV Makers Oppose Delay to Automotive Emissions Penalty Increase. In January, the National Highway Traffic Safety Administration (NHTSA), postponed imposing a penalty increase on automakers who failed to meet fuel efficiency standards from the beginning of model year 2019 to model year 2022. EV manufacturers, including Tesla who is suing, are pushing back against that decision saying it creates an uneven playing field. The legacy automakers who this delay protects, think there would be a significant economic impact at a time where COVID-19 is creating industry-wide disruptions. Related White House Considers Vehicle Mileage Tax to Fund Infrastructure while Senators Want Joe Biden to Ban ICE Powered Vehicle Sales by 2035, and Canada’s Carbon Tax Upheld by Top Court, Cementing Green Agenda. 

The Latest Numbers on The Microchip Shortage. The semiconductor shortage is continuing to plague the automotive industry. This week Honda and Accura announced that nearly 31K vehicles were taken out of North American production schedules because of the ongoing global shortage. Related Intel Bets on Chip Boom Continuing After COVID-19. 

17% of French Households Own a Personal Scooter. Micomobility continues to grow rapidly in Europe.  In France, 17% of big-city residents owned at least one scooter. Two-thirds of these scooters are electric and that number is expected to grow as French cities continue to act aggressively to combat climate change. In other micromobility news Airless Tires Inspired by the Mars Rover Could be Coming to Your eBike .

BorgWarner Targets Almost Half of Revenue From Electrification by 2030. BorgWarner announced that it will target boosting its EV revenue share from 3% to 45% by 2030. The company’s plan has three parts--profitably scaling EVs, expanding into commercial EVs, and optimizing its combustion-engine portfolio through the planned disposal of businesses with between $3B and $4B in aggregate revenue.In India, BorgWarner, partner, Jaguar’s First EV to Cost 2x a Tesla.

🌟Rivian is Planning to Install 10K EV Chargers Across the US and Canada by 2023. Rivan, the Amazon-backed EV startup, announced its adventure network designed to allow quick charges and recharges along highways and also includes Level 2 charges at more remote locations. Rivan is also installing waypoint Level 2 AC chargers, each with a 11.5 kW charging speed, to add about 25 miles of range every hour for Rivian’s R1T pickup and R1S SUV along routes that Rivan drivers will take. In other EV news GreenPower Motors wirelessly charged vans to be deployed in Washington State

Porsche Shuns VW EV Platform for Its Own. Porsche announced that it will use its PPE (Premium Platform Electric) architecture for future battery-powered vehicles rather than switch to VW’s EV platform. Porsche has been developing PPE with its sister brand Audi since 2018 and has been focusing on providing fast acceleration, longer range, and shorter charging times. The first model to use PPE will be the full-electric Porsche Macan SUV which will go into production in the second half of 2022. Related Audi Launches Serial Production of the Q4 e-tron and Quantum Scape to Open Second Pilot Plant 

Charging Data Shows a Widely Divergent Global Path. In December 2020, China installed 112K charging points which is more than the entire US public charging market. By the end of 2020, China represented more than two-thirds of all global charging points. While this number may seem staggering, it should be noted that China’s EV owners are more likely to rely on public charging infrastructure since they are less likely to have garages. Last week during Volkswagen's Power Day, the automaker highlighted that only 30% of public chargers in some parts of China are functional. More EV data Fuel Types of New Vans: Diesel 92.4%, Electric 2.0%, Hybrids 0.9% Market Share in 2020

Fundraises and M&A 💸

Luna Raises €400K in Seed Round  Led by Brian O’Driscoll. Luna is a startup that uses AI and computer vision technology to improve eScooter safety. The company is working on problems facing urban eScooter schemes using edge AI. Devices equipped with Luna’s technology can be programmed to guide eScooters on how to respond to pedestrians, traffic, and other scenarios. The funds will be used to accelerate the global roll-out of Luna’s technology. 

LGN Raises $2M Led by Trucks Venture Capital, Luminous Ventures, and Jaguar Land Rover. LGN helps enterprises address data science challenges by scaling out AI deployments, improving machine learning models, and optimizing the hardware and devices. The company plans to pursue low-latency inference technology that can process optical data on-chip orders of magnitude faster than current tech. The fresh capital will be used to support its product development and hiring efforts as it expands its market reach. 

MyCarrier Raises $8M Series A Led by Greycroft and Lerer Hippeau. Founded in 2017, MyCarrier is a software company with a less-than-truckload transportation management system for small and midsize shippers. The MyCarrier platform allows small shippers to compare major carriers’ rates and transit times on a given lane and electronically tender loads. The company’s main customers are major LTL carriers that white-label the platform and then offer it to their SMB shipper customers for free. The new capital will be used to continue scaling and developing the platform and eventually build premium services.

Baton Raises $10.5M Series A Led by 8VC and Maersk Growth. Baton is building a network of drop zones at partner facilities outside of major urban centers. Linehaul carriers leave loaded trailers at Baton’s drop zones and quickly pick up new loads without navigating dense city traffic or waiting for live unloads at a receiver. The funds will be used to scale Baton’s Los Angeles operation as well as expand into one or two additional markets, with transportation hubs such as Chicago, Dallas, and Atlanta at the top of the list. 

What3Words Raises £12M Led by Ingka Group. The London-based startup has divided the world into three-meter squares to create a system for pinpointing locations. This precise global addressing system could be used to help logistics firms with deliveries. This new cash will be used to continue growing the company. 

Roambee Raises $18M Series B Led by Reefknot Investments. Roambee offers digital real-time location and condition monitoring services. The company is currently providing its end-to-end cold chain solution to COVID-19 vaccine manufacturers. This capital infusion will be used for further expansion of its technology, services, and global market penetration.

iFoods DS Raises $15M Series A Led by Insight Partners. iFoods DS, offers field-level data capture solutions for environmental assessments, inspection records, shipping and receiving, inventory, corrective actions, and more. The company also builds on-site sampling and analyses of plants to identify areas that are the highest risk for pathogens. The cash infusion will be used for further growth and expansion. 

Idelic Raises $20M Series B Led by Highland Capital Partners. Idelic is a software solutions provider for commercial fleets. The company's software integrates ELDs, cameras, and human resource systems, giving transportation fleets a benchmark to compare safety scores. The funds will be used to expand its engineering and teams, add new features to the Safety Suite, and work on partnerships with insurance companies. 

Blacklane Raises €22M from Insiders. The Berlin-based startup provides on-demand black-car chauffeur services in Berlin, London, Dubai, Los Angeles, New York, Paris, Singapore, and 16 other cities. Blacklane will use these new funds to continue to expand sustainable travel initiatives and to continue its existing business with more flexible options for riding. 

Damon Motors Raises $30M Led by Benevolent Ventures. Based in Vancouver Canada, Damon Motors has developed the world’s safest, smartest, fully connected eMotorcycles employing sensor fusion, robotics, and AI. The company says it has also secured $20M in preorders for its HyperSport line. Damon’s HyperSport model boasts well over 200hp and 200nm of torque delivered at zero rpm, a top speed of 200 mph, a range of more than 200 highway miles per charge. The cash will be used to accelerate Damon’s path to market and enable demo tours, pre-production development and testing, and associated hires.

Baraja Raises $31M Series B Led by Blackbird Ventures. Baraja is known for creating a new form of AV sensors and lidar technology called Spectrum-Scan. Spectrum-Scan lets physics and prisms do the work of light processing. The Series B funds will go towards continuing the development of its system 

Forward X Robotics Raises $38M Series B Led by CDH Investments’s VGC, Eastern Bell Capital, and Dohold Capital. Based in Beijing, ForwardX develops autonomous mobile robots for warehousing and manufacturing environments. The company uses computer vision and deep learning with multi-sensor input for functionality to perceive semantics. ForwardX intends to use the money to accelerate the development of existing products, expand across Chinese and American markets, and invest in other international markets such as Germany, Japan, and the UK.  

Roadrunner Raises $50M Equity Round Led by Andrew Leto. Roadrunner is a company that uses technology to move trucks. This cash will be used to invest in planning, pricing, and efficiency as well as bolster leadership and improve service. 

Four Kites Raises a $100M Series D Led by Thomas H. Lee Partners L.P…Four Kites, which creates real-time supply chain visibility products that “break down barriers across today’s supply chains,” has had a record year of growth. Their customer base now includes 18 of the top 20 food and beverage companies and nine of the top 10 global CPG companies. Its visibility platform which tracks more than 1M shipments daily, is used in 176 countries and by more than 450K carriers. The fresh capital will be used to build out the customer success team, expand areas of visibility, infrastructure investments to support customers at scale, and acquisitions. 

Newlink Group Raises $200M Led by Bain Capital Private Equity. Newlink Group is a Chinese startup that helps motorists find gas stations and electric vehicle charging points. The capital infusion will help speed up the digitization of its energy value chain. 

Gorillas Raises $290M Series B Led by Coatue Management. The Berlin-based startup lets customers order groceries and everyday items for delivery in less than 10 minutes via its dark store model. With this round of funding, the company’s valuation has surpassed $1B. The company will use this cash infusion to continue its growth and reward its rider crew and warehouse staff with $1M in bonuses.   

ACV Auctions Raises $414M in its IPO. ACV Auctions is an used car online auction company. The company’s marketplace was used by more than 16K dealerships and other participants last year. The IPO implied a market value of more than $3.9B. 

Nuro Raises $500M Series C. Nuro develops autonomous delivery vehicles which are designed to transport goods instead of people. One of their models, the Nuro R2 was granted an exemption from the US DOT to be tested on public roads. This new capital will be used to grow the team and build a great autonomous delivery product. 

GoPuff Raises $1.15B Series G Round Led by D1 Capital Partners. GoPuff, which is available in more than 650 cities, promises 24/7,  30-minute delivery of everyday products through its network of more than 250 micro-fulfillment centers. The funds will be used to add to its product catalog, continue its US expansion, and enter international markets. 

Truckstop.com Acquires RMIS. Truckstop.com, a load board and digital freight marketplace, has acquired RMIS, a carrier compliance automator. Industry experts think that RMIS’s data will make Truckstop’s algorithms smarter and more efficient. 

UiPath Acquires Cloud Elements. UiPath, a New York-based robotic process automation software company recently valued at $35B, acquired Cloud Elements, a Denver-based API integration platform. The acquisition will allow UiPath to offer an enterprise-grade user interface and automation capabilities on a single platform. The terms of the deal were not disclosed.

SPAC Radar 📡

US Regulator Opens Inquiry into Wall Street's Blank Check IPO Frenzy - Sources. The Securities and Exchange Commission will launch an inquiry into the risk management and compliance practices of special-purpose acquisition companies.  The SEC requests for information are reportedly voluntary but a full investigation could follow.

Arrival in $13B Deal with CIIC Merger. Arrival is a UK startup that makes electric-powered vehicles but has not yet sold any. The company’s share price fell rapidly before climbing back to just above the initial valuation in its first day's trading. 

Company Building 🛠️

Frank Rotman on Valuations and State of Venture Market. “It’s also important to understand that almost every VC who has insight into the market dynamics is a public figure who by definition benefits from what’s happening. This has caused me to be on high alert when it comes to believing the hype. Behavior is shaped by incentives. Nobody will say anything that could negatively affect the outcomes within their own portfolio. VCs will complain about the price of new investments, but they’ll be the first to justify the value of their existing portfolio companies.”

Interview with Dan Dines of UIPath. An interview from Sep 2020 with Dines who leads UIPath that just filed for IPO. Some interesting perspectives on remote work, RPA, and UIPath’s success.  

DocSend: What Investors Look for at Pre-Seed. “Investors became laser-focused on sections of the pitch deck that address monetization and business viability — signs that founders need to come to the table with better-defined businesses in order to succeed.”

Who's Hiring? 👩‍💻

Lead Back End Engineer at Milk Moovement in St. John’s, Halifax (remote ok).

Product Designer at Backbone AI in New York, NY (remote ok).

Program Manager at Skupos in Denver, CO (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.