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
We are entering week three in a WFH configuration operating on all cylinders. Weâve observed the increasing prominence of the supply chain in daily headlines as the world looks to secure essential supplies for patients, healthcare providers, and the general citizenry. We are proud of the efforts coming out of our portfolio and want to highlight WorkHoundâs truck driver analysis (see below), Zeeloâs Critical Worker Services (Sam discusses on the Future of Supply Chain), and the numerous efforts from the likes of Backbone, Steam Logistics, nextmv, Stord, and more to route essential freight when/where itâs needed.
We wish everyone a healthy, safe (and sane) week.
We Are Dynamo,
Santosh, Ted, Barry, and Jon
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Supply Chain đŚ
How Health Systems Are Responding as COVID-19 Squeezes the Medical Supply Chain. With Chinese manufacturers reserving more stock of N95 respirators and testing kits for domestic use, American hospital staff have been seeking alternative distribution channels to shore up the supply gap of medical equipment. Efforts include working with private textile manufacturers to repurpose their factories for mask production. Also tackling the well-publicized shortage of PPE, 3M Plans to Make More Than a Billion Masks By End of Year. In complementary reading on the difficulties facing pharmaceuticals from cost pressures to Brexit, see Making Waves: The Challenges of Pharma Logistics.Â
Retailers Cancel Orders From Asian Factories, Threatening Millions of Jobs. With shops and malls closed across Europe and the US, a growing group of retailers that include H&M, Marks & Spencer, and Primark have suspended purchase orders from factories, many concentrated in Bangladesh and China. Without support, manufacturers warn the move could cost workers 4.1 million jobs in Bangladesh alone. Compounding problems, COVID-19 itself has reached South Asia: India, Bangladesh Close Factories Amid Coronavirus Lockdown.
CBRE Report Examines Increased Interest in On-Demand Warehousing, Due to Coronavirus. Given uncertainties about inventory procurement and a growing interest in short-term, flexible leases, LA-based industrial real estate firm CBRE anticipates the continued trend of on-demand warehousing for spaces less than 30,000 square feet. In an adjacent industry report, Yale offers guidance for optimizing distribution center operations and increasing fleet utilization in Improving DC Metrics.Â
đInternational-Logistics: COVID-19 to Usher New Wall Street Focus on Supply Chain Hedging. Learning from disruptions caused by the coronavirus outbreak, supply chain managers are more likely to implement strategic redundancies and consider safety stock strategies instead of just-in-time deliveries. JoCâs Gregory Tuthill posits this, in turn, might cause a paradigm shift among equity investors to revalue organizations that are better positioned to offer business continuity during the next pandemic. Looking at ocean freight, in particular, Flexportâs Nerijus Poskus predicts more premium ocean services and greater emphasis on on-time performance in Flexport Exec on Coronavirus Past, Present and Future.
đAn Analysis of Driver Feedback about COVID-19. Dynamo portfolio company WorkHound releases an analysis of 1,954 corona-related comments left by drivers via its real-time feedback platform for frontline workers and employers. Constituting 47% of all comments, planning and sanitation were the two most frequent concerns, demonstrating an emphasis on operational contingencies and trucker safety, whereas pay and benefits were mentioned in less than one-fifth of all responses. From other coverage of the frontlines, âTerrifiedâ Package Delivery Employees Are Going to Work Sick and Who Are the People Who Deliver New Yorkâs Food?
As Stay-At-Home Orders Spread, Deliveries Speed Up. According to data recorded by Convoy, rush hour deliveries in Los Angeles and Seattle are roughly 13% to 27% faster since lockdown measures went into effect. A bittersweet benefit of the ban on non-essential business, the commercial data mirrors reports that traffic speeds for personal travel have increased nationwide.
If Robots Steal So Many Jobs, Why Aren't They Saving Us Now?Wiredâs Matt Simon observes that the recent hiring frenzy by Amazon refutes the popular narrative that automation threatens human livelihood. Instead, he argues the new wave of robotic and AI systems augment workersâ skills by doing the harder, more repetitive tasks thereby freeing humans for more thoughtful and empathetic activities. Relatedly, new Brookings paper Does the US Tax Code Favor Automation? finds that job displacement due to automation may, in fact, may be the result of policy rather than tech itself.
Inside Instacartâs COVID-19 Playbook. With orders spiking 10x across the country, CEO Apoorva Mehta and the team have rapidly scaled up operations to meet demand they had not anticipated for another 2-4 years. New initiatives include revised time slots for delivery with a contactless option, the creation of sanitation stations in stores, and collaboration with hospitality businesses to provide a soft-landing for workers laid off from other industries as Instacart adds 300K new shoppers. For complementary reading, see the grocerâs perspective in How H-E-B Planned for the Pandemic. Speaking of groceries, A Plea to Not Panic Buy.Â
Mobility đ
VW Burning Through $2.2B/Week with Production Shutdown. VW has suspended sales and production to cope with the coronavirus but warns that a prolonged slow down will force a round of layoffs. The apparent baseline plan is to restart production well ahead of summer. However, The Group Still Eyeing August Roll Out for ID.3 EV to avoid fines from the European regulator to offset ICE sales.
Auto Sales Expected to Slump 80%; Demand to Be Elastic. Itâs expected that the bounceback in sales once the virus abates should help automakers recover. Thereâs also a silver lining here that dealers will be forced to embrace online sales after years of avoiding and even lobby against it. Also, Aluminum Surplus to Grow Amid Weak Demand (note that aluminum is a widely watched leading indicator of the economy).
đPlotting NYC Subway Usage and Looking at US Traffic Volumes. We have seen public transit come under increased pressure as people curb usage as the coronavirus pandemic plays through. In NYC, weekly usage in 2020 was as high as ~5.5M/day but is most recently down to ~0.75M/day. Nationwide traffic volumes are down 30% M/M and likely on their way lower as social distancing and shelter-in-place orders expand. Also, SF to Stop All Trains on 3/30 (Today).
Bird Laying off 30% of Staff. Itâs also been noted that VanderZanden has reduced his salary to $0 during the COVID-19 period. Also, Wheels is Deploying Self Cleaning Handlebars and Brakes.
GM Ramping Ventilator Production. GM is working with Ventec Life Systems to build ventilators and was already planning to produce 1K units by the end of April prior to Trump invoking the Defense Production Act. Ford, Toyota, and Tesla are also working on the effort but itâs not easy. Related, Detroit Auto Show is Cancelled, Venue to Become Field Hospital.
France Leveraging Rail to Load Balance Patients. âThose first 20 patients, all in stable condition, traveled in train cars that the railroad and Franceâs EMT service, SAMU, had converted into rolling intensive care units, stocked with equipment and staffed by aid workers. EMTs stacked oxygen bottles in the luggage racks and lay stretchers across seat tops, securing them with orange cords they ran around armrests and seat legs. Ambulances carrying patients from local hospitals drove onto the train platform, where medical workers wearing face masks, protective gowns, and goggles brought them aboard. Each retrofitted car carried four patients and six medical workers.â
Fundraises, M&A, Talent đ¸
Lilium Raises $240M Inside Round Led by Tencent. The lack of new investors might suggest challenges for the company following recent prototype accidents; nevertheless, the round size sets a new high watermark for flying taxi companies. The Munich-based builder of vertical take-off and landing (VTOL) aircraft targets 2025 to deliver on its regional air mobility goal.Â
Cazoo Raises ÂŁ100M Led by DMG Ventures. Founded by serial entrepreneur Alex Chesterman just 18 months ago, the UK-based startup buys used cars to sell online and then delivers them to customersâ driveways. Also participating in the round were General Catalyst, CNP (Groupe Frère), Mubadala Capital, Octopus Ventures, Eight Roads Ventures, and Stride.VC.Â
Helm.ai Raises $13M Seed Round. Applying deep learning technology to interpret sensor data, the company has developed software that can train neural networks without the need for simulation or annotation. Investors include A.Capital Ventures, Amplo, and Sound Ventures as well as NBA player Kevin Durant and General David Petraeus.Â
Twaice Raises âŹ11M Series A Led by Creandum. The Munich-based startup creates digital twins of battery systems in electric vehicles to provide real-time analysis and predictions about battery health. Given the increasing popularity of lithium-ion batteries, the company sees a natural progression into providing predictive maintenance and extending productsâ warranties.Â
Forager Raises $10M Series A Led by US Venture Partners. Based in Chicago, Forager provides a comprehensive cross-border pricing and booking portal that enables shippers to easily transport and monitor products moving between the US, Mexico, and Canada. The new funding will help the startup weather out Covid-19, while investing further into the platform itself.
Kargo Technologies Secures Investment from Amatil X. The Indonesia-based trucking marketplace bags strategic investment from Amatil X, the venture capital arm of Coca Cola Amatil. The fresh injection not only supports the platformsâ transporters during the coronavirus downturn but also primes the ground for regional expansion in giving the company access to the Coca Cola family in other nations of Southeast Asia. The investment size has yet to be disclosed.
FourKites Acquires TrackX Yard Solutions. Integrating TrackXâs Yard Management, Dock Management, and Gate Control solutions into its real-time tracking platform, FourKites extends its range of visibility from trucks in-transit to trucks on-site. The combined visibility product, called Dynamic Yard, will allow facility managers to better anticipate bottlenecks and improve gate-in and gate-out processes.
BigBasket Acquires DailyNinja. The Bengaluru-based online grocer looks to secure its position in the subscription delivery space through its purchase of online milk delivery app DailyNinja. By leveraging the BigBasket delivery network, the merger is expected to double volume for milk deliveries within a month.Â
Company Building đ ď¸
đThe Economics of Pandemics. For those looking to understand the impact on supply chain and mobility, pay attention to slides 61-64 but donât ignore the following slides that suggest necessary global policy to help us emerge from this and avoid a vicious loop of economic disaster.
SBA and Disaster Relief Loan Programs. This is a great resource for companies trying to understand the assistance they might be eligible for as part of the Federal stimulus bill. MSP has been great about updating their resources as more information and insight is gleaned around eligibility and the application process (the bill is 800+ pages!).
A Composition of Sage Advice from the Twitterverse.Bill Gurley on Listening to the Experienced, David Ulevitch on Handling the Departure of Key Employees, and Samir Kaji Offers Insights into How VC Works in Soft Economic Environments.
Who's Hiring? đŠâđť
Director of Product Management at Backbone in New York, NY.
BDR at Skupos in Denver, CO.
AV Field Ops Lead at Gatik in Palo Alto, CA.
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.