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
If you havenât already, check out last weekâs Future of Supply Chain podcast episode featuring Bruce Welty of Quiet 3PF and Locus Robotics fame. Also, weâve been more actively writing in the face of COVID-19, check out our blog as well.
Lastly, we are looking for our next Venture Fellow. Please forward to college graduated in your network that is looking for a six-month dive into startups and venture capital.
We Are Dynamo,
Santosh, Ted, Barry, and Jon
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Supply Chain đŚ
With Retailers Closed, Parcel Carriers Struggle with B2C Volume Surge. Already stretched due to staff shortages, couriers across the globe are implementing desperation measures to handle the present spike in residential deliveries. Tactics have differed by nation: in Switzerland the postal service has set daily volume caps for its 100 biggest customers; meanwhile, the French postâs attempt to limit deliveries to three days per week was quickly reversed by government decree. The surge though is not just in Europe. ICYMI, Amazon to Suspend Delivery Service That Competes With UPS, FedEx and US Postal Service Warns of $22B Hole From Coronavirus.
Real-Estate Firms Expect Coronavirus-Driven Shifts Will Spur Warehouse Demand. Industrial real-estate operators are betting that the current supply chain strain will convince their retail customers to readjust from their lean inventory strategies. As one industry leader observes, âThereâs this move away from just-in-time [inventory], so the tenants are getting fatter.â For those interested in a deep dive on the topic, we break down the changing trends in inventory in our latest blog post The Coming Build Up of Safety Stock.Â
Coronavirus Broke the Global Food Supply Chain. In the UK alone, McDonaldâs sources food from 23,000 farmers across Great Britain and Ireland. Having closed all 1,270 of its UK restaurants last month, the impact on producers, processors, and packers is indicative of the catch 22 facing the entire food supply chain: whether to reduce production capacity and stymie food waste losses or to maintain contractual output in the hope of markets opening back up. Speaking of food, How Is COVID-19 Changing the Grocery Industry?. CBRE also predicts Coronavirus Will Increase Demand for Cold Storage Options.
Former Starsky Executive Discusses Role of Technology and People. Drawing on three decades of experience in the trucking industry, Paul Schlegel lays out the guiding principles behind Starsky Robotics. Emphasizing that operatorsâ feedback can accelerate the development of self-driving trucks, his recommendations include seeking win-win solutions to turn drivers into advocates for a safer trucking future and maintaining conservative cost per mile financial plans in order to provide a real business case for adoption. Related, AV trucking startup, Kodiak Robotics Downsizes by 20% while drone startup, Matternet Has Delivery Operations Grounded.Â
Why America's $800B Trucking Industry Was Left Out of the $2T Stimulus Bill. As compared with just 99 airlines operating in America, the US has more than 200,000 trucking companies. Industry leaders posit that great degree of fragmentation coupled with the busy past months grappling with demand as the reason trucking companies did not mobilize a unified request to policy makers. However, the industryâs voice appears to be getting more representation as Trump Says Trucking CEOs to Help Advise on Economic Recovery.Â
Digitization is Inevitable in Container Freight. âIf there is one original sin of the industry, itâs a fundamental lack of integrity in freight contracts,â writes JoCâs Peter Tirschwell. As present limitations to in-person business accelerate adoption of digital technologies, Tirschwell expects for the increased visibility to make mutually enforceable contracts the new industry norm. Elsewhere in the product world, Convoy Adds Carrier Insights to TMS and KeepTruckin Automates Maintenance Reminders.
đThe Economy and Logistics Through the Lens of Data. In an wide-angle overview of recent freight trends, Flexport breaks down the results of its latest web-based polls and Greater China shipper survey. Key takeaways include that shippers believe supply shock to be over for now, although most forecast impending demand shock. Meanwhile a quarter of respondents anticipate their sales will decrease more than 30% in Q2 but become less pessimistic for the full fiscal year. Related: Grim prospects for box carriers as collapse of demand weakens balance sheets, FreightWaves Believes the Freight Market Is About to Turn Up
How Medical Supply Chains Can Diversify beyond COVID-19. Approximately 80% of all active pharmaceutical ingredients (API) come from abroad. To mitigate American exposure in future crises, Deborah Abrams Kaplan posits a three part plan for enhancing transparency, increasing near-shore manufacturing, and leveraging AI capability to anticipate and identify shortages. Speaking of which, MITâs Yossi Sheffi thinks government intervention will be required to Solve the Health-Care Equipment Supply Shortage
Mobility đ
How Bike Rental Companies Are Helping NHS Staff Get to Work and Avoid Public Transport. Buzzbike, Beryl Bike, and Brompton Bicycle Ltd are some among several UK-based rental companies now offering their bikes free of charge to National Health Service workers. With hundreds of bikes already being requested, other businesses are joining in the appreciative effort with one floral business electing to give away posies with every bicycle they help deliver. Meanwhile in the US, Oakland's 'Slow Streets' Help Encourage Biking and Walking.
Automakers Caution that Small Suppliers Require Assistance for A Return to Normalcy. While car manufacturers may have access to government loans and billion dollar credit lines, the network of smaller parts makers supporting them are in no position to take on large debt. On recent calls with Angela Merkel, automotive executives in Germany have warned that small suppliers must also be included in policymakersâ stimulus plans as replacing just a single supplier could delay the reopening of a major car plant for weeks.
The Devastated Travel Industry, by the Numbers. As of April 8th, North American airline capacity is down 72%, Europe 84%, and Asia 61%.Facing the worst travel depression since 9/11, the airline industry must recall that it took six years for the industry to turn profitable in the wake of those terrorist attacks, with cumulative net losses from 2001 to 2005 totaling $60.6 billion. For many, the current crisis could bode even worse. In contrast, German Carmakers to Resume Production as Lockdowns Ease andAs Other Carmakers Retrench, Volvo's Battery Lab Plugs Away.
âCharger Desertâ in Big Cities Keeps Electric Cars from Mainstream. Problems abound for New Yorkers desiring electric vehicles but without access to private charging in personal garages. As is common in urban communities across the country, hurdles to EV ownership include distant charging stations and slow charging speeds. Despite recent efforts by startups to fill in these âcharger deserts,â some industry experts still argue that a Marshall Plan-type investment in infrastructure is necessary to spur the transition from gas-powered to electric vehicles.
Moovit Public Transit Index. Mobility-as-a-Service platform Moovit breaks down the impact of COVID-19 on public transportation ridership based on app usage before and after January 15th. Los Angeles, San Francisco, and New York have all witnessed declines of more than 70% while Philadelphia has fared the best among major American metros with a comparatively robust 58.8% decline in ridership. As for how mass transit systems can preserve through the downtown, a new report finds MTA Will Need Another $4-8 B in Fed Funding
Auto Accidents Drop by Nearly Half, According to Insurance Claims Data. With millions of cars parked across the nation due to quarantine restrictions, insurance-claims processor Snapsheet has observed a 40% to 50% decline in personal accident claims. Similarly, claims for commercial vehicles are down 30% to 40%. Related, How Insurers Decided on COVID-19 Refund Amounts.
"Rideshares for Kids" Pivot to Survive COVID-19. Since 2019 specialty rideshare startups HopSkipDrive, ZĹŤm, and Kango have raised a collective $65M in venture capital. However, as school districts across the nation have announced closures through the fall, these companies that once specialized in bringing students to class are pivoting to bring school supplies and lunches to students now studying from home. It is not only the private sector that is readjusting its pickups: In the COVID-19 Era, the Wheels on the Bus Increasingly Bring Wi-Fi.
Coronavirus Exacerbates Debt-Laden Belt and Road Projects. Having accepted a $750M loan 6 years ago for highway construction, Montenegro joins a growing number of developing nations now facing massive debt and shifting exchange rates under Chinaâs Belt and Road Initiative. With participating countries across Asia, Africa, and Europe putting up huge collateral for quasi-commercial loans, China stands to gain significant foreign assets if the economic fallout of coronavirus sees borrowing nations default as happened recently in Sri Lanka where China acquired the port of Hambantota.
Fundraises, M&A, Talent đ¸
Kargo Technologies Raises $31M Series A Led by Tenaya Capital. The self-styled âUber for logisticsâ platform matches Indonesian shippers directly with carriers, decreasing costs by cutting out middlemen. On the heels of its $7.6 million seed round, last year led by Sequoia India, Kargoâs latest raise makes it the most funded startup in Indonesiaâs trucking space.
Choco Raises $30M From Coatue. The restaurant supplier plans to use the funds to continue building out its technology and customer base, as well as to adapt to the current market with more initiatives to help its customers stay in business across 17 global markets.
FarEye Raises $25M Series D Led by M12. Microsoftâs Corporate Venture Fund leads this latest raise for the cloud-based mobile workforce platform. FarEye plans to use the fresh capital to enhance its predictive abilities and fund expansion into new markets across Europe, Asia, and the US.
Previse Raises $11M Series B Led by Reefknot Investments and Mastercard. The London-based startup has developed a financial platform that leverages machine learning to predict which invoices can be paid immediately and thereby reduces payment timeframes for suppliers and contractors. Already Previse handles about 100K invoices per day and anticipates demand for its service will only increase as companies seek to unlock more working capital in the wake of the coronavirus outbreak.
Autofleet Raises $7.5M Series A Led by MizMaa Ventures. The fleet optimization startup offers APIs that apply artificial intelligence for optimal demand-supply matching, dynamic pricing, and automated de-fleeting. The majority of the new investment is slated for global expansion and research and development.Â
AI.Reverie Raises $5.6M Led by Vulcan Capital. The computer vision startup helps smart city businesses train their machine learning algorithms and improve their artificial intelligence applications. The New York-based company plans to use the fresh injection for new hiring and product expansion.
LivingPackets Raises âŹ5M via Crowdfunding Campaign. The Franco-German startup has developed an intelligent packaging system, THE BOX, which can be reused for delivery up to 1,000 times. Still, in pre-production, THE BOX is not only intended to reduce environmental impact but also to enable intelligent tracking and the ability to change the recipientâs address during delivery.
RISE Robotics Raises $3M Led by MITâs The Engine. Developers of a linear actuator intended to replace hydraulic cylinder systems, the startupâs technology helps electrify the push-and-pull movements in heavy machinery that range from excavators to garbage trucks. The new funds will support the companyâs work with a leading forklift manufacturer to accelerate the shift in its machinery from diesel to electric systems.
RaRa Delivery Raises $834K Seed Funding Led by 500 Startups. The Jakarta-based startup uses an asset-light operational model and AI-enabled routing technology to power its same-day delivery service. With the fresh funds, the company will look to hire new ops and commercial talent to lead its expansion across Indonesia.
Company Building đ ď¸
đ§a16z Podcast: Moving to Remote Development. In the face of WFH and a ramp in remote work, the a16z team discusses the current technologies and practices that support organizational communication and alignment for distributed teams and development.
Pricing In A Time of Uncertainty. A couple of points stick out: 1) Resist heavy discounts and instead offer concessions around other terms - reduced pricing tends to follow into good economic times as well; 2) Consider usage-based pricing that helps stem churn if the customer feels like they arenât using the product âenough.â
Advice From Recession-era Leaders. âDoing nothing is a decision. Itâs the same as actively choosing to stay on the same path. And most founders don't realize that. If the winds are changing, a smart sailor will adjust their sails.â
Who's Hiring? đŠâđť
Senior Decision Engineer at nevtmv in Philadelphia, PA (open to remote).
Software Engineer at SVT Robotics in Norfolk, VA.
Senior Full Stack Engineer at Backbone in New York, NY.
Check out other jobs at Dynamo portfolio companies.
đĽ Have you seen any interesting startups recently? 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.