Dynamo Dispatch. A 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
Hey folks. We took last week off in light of the Easter holiday. We hope your inbox didnât miss us too much. đ
In last weekâs episode of The Future of Supply Chain, Santosh had the privilege of speaking with Ajesh Kapoor of Semicab. Check it out if youâre interested in learning more about North Americaâs only Collaborative Transportation Platform, the problems Semicab is solving for its customers, or the possibility of a pending freight recession.Â
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Clay, Santosh, Jon, and the rest of the Dynamo team
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Supply Chain đŚ
Trucks Stuck At Poland-Belarus Border As EU Sanctions Deadline Passes. A huge queue of trucks has formed on the Poland-Belarus border as Russian and Belarusian drivers try to leave the EU following a sanctions deadline. The queue of trucks extended up to 50 miles with some stuck for up to 33 hours. Although waiting times had been shortened to 12 hours with 230-400 trucks crossing the borders, it is unclear what will happen to thousands of other trucks from the two countries estimated to currently be on EU territory. One possibility is that they will be seized by national authorities. In the US, Trucking Slowdown And A Potential Recession Seems Ominous For Smaller Players, leading many analysts to revisit developments on Drivers That Cause Busts In The Trucking Cycle.Â
JB Hunt Reports Rising Trucking Demand As Rail Challenges Restrict Intermodal. The trucking company saw demand for its truckload services skyrocket after challenges with rail velocity restricted the carrier's intermodal operations. Truckload revenue grew 77% y/y, representing the strongest quarterly performance in the segment going back to 2005. While rail constraints helped shift more intermodal volume to J.B. Hunt's trucking businesses, the carrier also noted that demand for contractual truckload services rose as spot market growth eased during 1Q2022. With rail issues continuing in the US with most recently Sweetener Shippers Bemoaning The Rail Service, an opportunity emerges in Intermodal Cargo By Cost-Cutting Shippers.
Ports On Both US Coasts Are Operating At Record Levels. Container ports in March were operating at, or near, record levels on the Pacific and Atlantic coasts of the US. The nationâs busiest facilities, the Port of Los Angeles and Long Beach, processed 1.8M TEUs, leading to an increase of 3.5% y/y to the best first quarter ever at 5.14M TEUs. The volume increase was primarily attributed to improved fluidity on docks and fewer vessels waiting to enter the port, as well as improvements in the supply chain due to increased collaboration with industry stakeholders. Surprisingly, the March increase at Los Angeles and Long Beach came during what typically is one of the slowest months in terms of port volume. On other news related to international maritime supply chains, Maersk Installed Automated Weather Stations to track global weather conditions and Container Lines Prepare For Potential Shanghai Fallout.
US Companies Face Hurdles in Moving Production Closer to Home. Experts believe that companies looking into nearshoring strategies would only bring production problems closer to home on top of undergoing a lengthy process. For reference, although 70% of CEOs have planned, are considering, or expect to move manufacturing to Mexico, only 17% have already done so. US importers who are studying shifting their sourcing from the Asia-Pacific region to Latin America are finding it tougher to find suppliers with the right raw materials, production quality, and networks for getting their own components. One clear example is the semiconductor industry, which despite the challenges for shifting to in-house production, Appleâs Successful Transition To In-House Chips among others has led to Congress Seek Compromise to Boost Chip Industry. Â
đThe Future Of Micro-Fulfillment. The pre-pandemic trend was a steady march towards more and more e-fulfillment, but the statement we heard over and over â that in five months, the pandemic accelerated that pace by five years â may need to be tempered. March was the first month since November 2013 to record a y/y drop in eComm sales dropping by 37%. In comparison, brick-and-mortar sales rose by 11.2%. Back in March, a report forecasted a total of 7.3K automated Micro-Fulfillment Centers (MFCs) to be installed globally by 2030, with half of those within the Americas. However, an updated report found that 30% of systems ordered were installed globally due to hesitancy in the market to roll out automated MFCs at scale. With Same-Day Delivery No Longer Being Optional and Logistics Real Estate Market In âUnprecedented Territoryâ, fulfillment has increasingly become a worry for supply chains.Â
Visualizing The Material Impact Of Global Urbanization. Cities only cover 2% of the worldâs land surface, but activities within their boundaries consume over 75% of the planetâs material resources. Today, more than 4.3B people or 55% of the worldâs population live in urban settings, and the number is expected to rise to 80% by 2050. With the expansion of urban areas, the worldâs material consumption is expected to grow from 41B tonnes in 2010 to about 89B tonnes by 2050. In the last couple of months, commodities have taken up the headlines, with most recently Intra-Asia Materials Trade Pipeline Being A Victim Of Shanghai's Covid Lockdowns and the Russia-Ukraine Supply Chain Strain.
Amazon Ramps Up FedEx, UPS Rivalry By Expanding Prime To Third Parties. The company launched a new service, Buy with Prime, that lets third-party merchants use Amazonâs vast shipping and logistics network to fulfill orders on their own sites, while also appealing to Amazonâs 200M+ Prime customers. These websites will be able to put the Prime badge on their websites next to items that are eligible for free two-day or next-day delivery. Prime members will use the payment and shipping information stored on their Amazon accounts to place an order. The company clarified that service wonât be free for sellers, and pricing will vary depending on payment processing, fulfillment, storage and other fees. As On-Time Delivery Becomes The Key To A Positive Delivery Experience, companies have been making significant investments to enter the space with most recently Kroger Targeting New Markets For Fast Delivery With Hiring Initiative.
Mobility đ
Fordâs Shuttered India Factories May Be Reborn in EV Push. This comes just seven months after Ford decided to eat a $2B charge in order to close its India factories. Now Ford is exploring ways to recoup its losses, including converting a plant into an export base for EVs. While current EV usage in India is low, it has massive growth rates and a big spike in demand driven by the governmentâs emphasis on becoming carbon neutral by 2070. In other news, consider reading Tesla Expects Gigafactories To Run Below Capacity Through 2022.
Why VW Wants to Be Relevant in America Again. Recent geopolitical and economic instability in Europe has pushed VW to try to re-insert itself into the American market. Currently, around 40% of its sales are focused in Europe and China. A shift to the US would require a dedicated holistic approach to a unique market. They have some traction as VWâs main brand increased its sales by 15% to 375K units in the US last year. In other news, BMW Presents The I7 â An Electric Luxury Sedan With An Eye Towards China and GM Stops Offering Battery Replacement For Chevy Spark EV.Â
đThe Race To Dominate The New Battery Economy. The US is currently behind Europe and China in battery production. This could be a growing factor given that the US currently only has 5% of the manufacturing capacity for the presidentâs 2030 EV goals. The battery demand for both domestic and international production is far outracing supply. This is a big opportunity for companies with interesting solutions to the problem. In related news, check out GM To Halt Pickup Truck Production In Indiana Due To Chip Shortage and Tesla Is Already Using Cobalt-Free LFP Batteries In Half Of Its New Cars Produced.
Musk Says Tesla Aspires To Mass Produce Robotaxis By 2024. Tesla plans for their robotaxis with no sterring wheels or pedals to hit the market by 2024. They are projecting that a robotaxi ride could cost less than a bus ticket. It seems like the goal of Tesla is to make their vehicles more accessible to a larger portion of the public by lowering the cost per ride exponentially. Musk has made some big promises in the past, so weâll see if this actually comes to fruition within the next 2 years. In related news, check out Tesla Crushes Q1 Estimates, Warns That Supply Chain Issues Are Far From Over and Aston Martin Is Going Electric, Launching Its First EV in 2025.
Planes Fueled By Trash Could Be The Future Of Green Aviation. Sustainable aviation fuels are biofuels that can be made from a variety of products including waste. The obvious problem currently facing mass adoption in order to solve the green aviation problem is cost per gallon. The demand for this green fuel is far outpacing supply, leading to prices being three to five times more expensive than traditional fuels. Airlines are petitioning the government for aid in subsidizing costs in order to feasibly transition away from traditional fuels. For related information, consider reading FACT SHEET: Biden Administration Advances the Future of Sustainable Fuels in American Aviation.
Lyft Follows Uberâs Lead And Removes Its Mask Mandate. Following a string of transportation companies lifting mask bans, Lyft follows suit as well as removing the option for riders to cancel unmasked trips. While private transportation services have more unilaterally removed mask mandates, public services are more split on the issue. There isnât much information on the impact of mask mandates specifically on transportation rates but public response to these changes could be something to monitor. In other news, Lyftâs Revenue Growth Masks Active Rider Slippage and In D.C., Masks Are Still Required In Taxis, Ride-Share Vehicles.Â
Global Business Travel Recovery Sees A Double-Digit Surge. Around 88% of suppliers and travel management companies report that their bookings have increased since the prior month, an increase of almost 40 percent. Overall business travel expenditures should be back to 79% of its pre-pandemic level by 2023. These positive signals from the business travel sector is good news for actors in other parts of the aviation industry that, barring inflation, willingness to travel has returned. For related information, check out, An A380 Superjumbo Just Completed A Flight Powered By Cooking Oil and Ultra-Light Liquid Hydrogen Tanks Promise To Make Jet Fuel Obsolete.
âMr. Lithiumâ Warns Thereâs Not Enough Battery Metal to Go Around. The price of lithium has almost doubled in the first quarter. Joe Lowry, the mining expert known as Mr. Lithium, said the primary reason lithium wonât be able to keep up with demand is due to the incredibly long timelines for building new lithium projects. He projects that many corporate EV ventures will face massive delays due to the problem.Â
Fundraises and M&A đ¸
EVmotors.eu Raises âŹ750K Led By AeroCity Tech Ventures. EVmotors.eu is an EV marketplace and community platform. According to surveys done by the company, 69% of participants in the UK and 89% of participants in Spain are willing to buy their next car online.Â
Freshflow Raises âŹ1.7M Led By Capnamic & World Fund. Freshflow is an AI-powered forecasting platform to help retailers optimize stock replenishment of fresh, perishable goods. It says its first customer has seen a 28% reduction in food waste and a 16% increase in revenue after eight months of using its platform. The startupâs longer-term vision is to expand from serving customer-facing grocery retailers to warehousing facilities, suppliers and ultimately, farmers.
Replan Raises âŹ2.4M Led By Hoxton Ventures. Replan is a supply chain planning company. Its cloud-based production planning software helps manufacturers navigate disruption and reduce costs through automated production planning optimization. The funds will be used to support the launch of its new software.
Rush Raises âŹ2.5M Led By Eleven Ventures & Launchub Ventures. Rush helps eComm retailers generate more revenue and increase retention by turning shipment tracking pages into marketing opportunities. In addition to that, Rushâs tools enable merchants to create their own customizable branded tracking page that is visited at least 3 times per order. The funds will be used to increase its development and support teams and expand its network with best-in-class agencies, technology platforms & warehouse solutions.Â
Celcius Raises $4.5M Led By Mumbai Angels. Celcius is a Mumbai-based cold chain logistics startup. The company claims to operate 2.5K vehicles and 107 cold storage facilities. The funds will be to expand its team and footprint to more than 500 cities.
Floki Raises R$50M Led By NFX & Valor Capital. Floki has built a platform that uses artificial intelligence to connect restaurants and suppliers and automate the inventory buying process. In two years of operating in SĂŁo Paulo, Floki reports a 20x growth and an average transaction volume of R$3M each month. The funds will be used to scale up operations, customer acquisition, and improve its product.
Vaayu Raises $11.5M Led By Atomico. Vaayu is a carbon tracking platform for retailers. Additional investors include CapitalT and Seven Seven Six. The funds will enable Vaayu to offer retailers emissions benchmarking against their peers and detail the carbon footprint of individual items.
LuminWave Raises $20M Led By Anxin Capital. LuminWave is a LiDAR developer for the AV industry. LuminWave recently emerged from stealth mode and demonstrated its 2nd Gen product at last year's CIOE, China's largest optics conference. The funds will be used to scale its workforce and accelerate product development.
Shipium Raises $27M Led By Insight Partners. Shipium provides software that helps eComm shops manage fulfillment and compete with Amazon. Its CEO, Jason Murray spent nearly two decades at Amazon, running supply chain teams. The funds will be used to fuel growth.
Agility Robotics Raises $150M Led By DCVC & Playground Global. Agility Robotics is building walking warehouse robots to unpack trucks and move boxes. Amazonâs new $1B Industrial Innovation Fund also participated in the round. The funds will go towards expanding its operations as it scales to market.
Instabox Raises $190M Led By Verdane. Instabox provides automated parcel locker service. Additional investors include Creades, EQT Ventures, Tham Special Investment AB, Nineyards, Tacito, and M2 Asset Management. The funds will be used to grow its platform and improve services.
Convoy Raises $260M Led By Baillie Gifford & T.Rowe Price. Convoy is a digital freight network that connects shippers with carriers. According to the company, Convoy is on track to earn more than $1B revenue this year. The funds will be used to scale up initiatives that will push the trucking tech industry into new ground.
Beta Technologies Raises $375M Led By TPG Rise Climate & Fidelity. Beta Technologies is a company building electric vertical takeoff and landing aircrafts (eVTOL). The company's aircraft prototype, currently in flight testing, is the dragonfly-like ALIA-250. It can carry up to 1.4K pounds of cargo, or five people plus a pilot.
The Boring Company Raises $675M Led By Sequoia Capital & Vy Capital. The Boring Company was founded by Elon Musk to revolutionize transportation. Additional investors include Valor Equity Partners, Founders Fund, 8VC, Craft Ventures, and DFJ Growth. The funds will be used to significantly increase hiring across engineering, operations, and production to build and scale its underground transportation projects.
Descartes Acquires Foxtrot For $4M. Descartes Systems Group, a leading player in uniting logistics-intensive businesses in commerce, announced that it has acquired Foxtrot, a provider of machine learning-based mobile route execution solutions. The acquisition enables Descartes to add a team with deep domain expertise and proven technology that will help accelerate its effort. Descartes acquired Foxtrot for approximately $US 4.0 million, satisfied from cash on hand.
Intrinsic Acquires Vicarious. Alphabet-owned industrial robotics company Intrinsic is acquiring Vicarious, a turnkey robotics solutions provider that uses AI to automate tasks too complex and versatile for traditional automation. Vicarious has previously raised $250M from the likes of Jeff Bezos, Elon Musk, Mark Zuckerberg, and Samsung. The terms of the deal were not disclosed.
Lyft Acquires PBSC. Ride-hailing company, Lyft has signed an agreement to acquire PBSC Urban Solutions, a Canadian supplier for bikeshare equipment and technology. The acquisition enables Lyft to double its scale in mircomobility. The terms of the deal were not disclosed.
SPAC RadarđĄ
Zi Toprun Acquisition Files For $110M IPO. Zi Toprun Acquisition is a blank check company targeting transportation companies with valuations between $200M and $600M in North America, Europe, and Asia. The company plans to raise $110M by offering 11M units at $10. At the proposed deal size, Zi Toprun Acquisition would command a market value of $143 million.
Caravelle in $527M Deal With Pacifico. Caravelle offers international shipping services and carbon-neutral solutions for wood desiccation. The ocean technology company claims that it takes a ânovel approachâ for shipping time and space, as well as repurposing engine heat and by-products to cut down carbon emissions. The deal is anticipated to deliver around $100M of cash proceeds. This includes an expected $60M private investment in public equity (PIPE) as well as up to $58M of cash in the Pacifico trust account.
Business Building đ ď¸
The Perfect North Star Metric?. What if we designed north star metrics that captured value to the customer rather than value to our organizations?
Raising A Series A. Ed Sim at Boldstart explaining the nuance in what it takes to raise a Series A. Weâd add that in a softening environment, revenue always helps provided it shows that a large customer base has a ROI case theyâre willing to pay money for. Further, this customer base is willing to vouch for the value of the product and founders can ID other similar companies they can sell to (the scalability factor).
Customer Segmentation In B2B. A few notes: weâve seen founders being able to outline a customer profile but challenged in ID-ing if they are a fit (aka qualify them) in a timely and straightforward process. Consistency of needs is something that comes w/ âshots on goalâ and highlights importance of discovery while prioritizing a customer is often the hardest thing for a seed company who may need to say ânoâ to chunky ARR wins that arenât consistent with the current focus.
Who's Hiring? đŠâđť
QA Analyst at Milk Moovement in St. Johnâs, Halifax (remote ok).
Marketing Manager at Tangram Vision in San Francisco, CA (remote ok).
Senior Operations Associate at Amitruck in Nairobi, Kenya.
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.