Dynamo Dispatch (04/29/19)

Issue 62 | Rivian, Oriient, KeepTruckin

Dynamo Dispatch. Weekly update from Dynamo covering the latest and greatest in supply chain, mobility, and building venture-scale businesses.

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🎙 Check out Dynamo's podcast series, The Future of Supply Chain.

Weekly Commentary 💭

If you haven’t already, be sure to check out our podcast, The Future of Supply Chain. Equally interesting is our blog, Tradewinds that we did a soft reboot on to share our thoughts on building supply chain and mobility startups.

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We Are Dynamo,
Santosh 💥

Supply Chain 📦

🌟 Amazon Takes Wraps off Freight Brokerage. The eCommerce behemoth has officially entered the competitive freight brokerage industry and is coming in hot -- undercutting the market by 26-33%. In the words of a former Amazon executive, “The advantages that then come from disintermediation and the monetization of those capabilities are secondary to the immediate need of self-preservation, but then serve to feed very critical needs of Amazon’s ability to continue to succeed.” Also, Prime One-Day to Become the Norm with $800M logistics investment but Walmart Isn’t Far Behind On Speedy Delivery.

📊 McKinsey on Automating Logistics. An entirely new logistics paradigm is coming and could drive a more automated supply chain by as early as 2030. Companies are grappling with a shortage of warehouse workers and the rising pressures of eCommerce (where on average, related logistics revenues have been driven up by 400%) that creates a potent opportunity for automation technologies. Friction in adoption is driven by “co-opetition” (think Amazon/UPS/FedEx dynamics), keeping up with innovation and selecting the true opportunities with high ROI, purchasing problems, changing needs of omnichannel, and short-term contracts.

Focusing on the Last Motion in Last Mile Automation. “These are the short task sequences between previously automated streams of work in highly structured environments, where humans currently handle various uncertainties involving physical inputs, control actions, and outputs.” Some salient perspective around the number of jobs in “last motion” and helping those who could be displaced.

Air Cargo Industry is Embracing Digital. It turns out that major air carriers are co-opting with startups as well as developing in-house products to build digital capabilities. The big question is what differentiates one from another? On the ocean side of the coin, CMA CGM Unveils Digital Solutions and Maersk Blockchain Adds Fourth Carrier in ZIM.

Bulk Ocean Shipping’s Technology Evolution. While container shipping has moved forward with innovation, bulk freight has been a laggard. In part due to fragmentation and varying interests between ship owners, operators, and customers. Opportunities exist in streamlining ship operations, sensor-driven maintenance, and providing transparency and trust between ship owners and operators they entrust the assets to.

Trucking Industry Must Make Case for Electric Trucks. The CEO of Daimler Trucks North America called on regulators and industry executives to incentivize and support investment in infrastructure and charging technologies to make electric trucks a reality.

Wing Gets Clearance for US Flights. The Alphabet company has quietly beat rivals both abroad and at home for the necessary government approvals to operate a drone delivery network. The initial US test area will be in Virginia.

Mobility 🚗

🌟 Is Private Rail Ripe for Investment?. Virgin Rail Group runs the only private intercity railroad in the US, the Brightline in Florida. Could its success be a model for a more VC rail investment in the US?

📊 BCG on Implications of Electric Vehicles for Utilities. It turns out that EV could create up to $10B of new value for utilities. BCG believes four factors will drive and shape the transition: technology, regulatory mandates, consumer adoption, and autonomous-vehicle and ride sharing.

📊 McKinsey: Shared Mobility to Transform American Mobility. Growth is expected to occur over three phases over the next decade: Growth of Core [Ridehailing]; Expansion to Last Mile, Multimodal, and Denser Occupancy, and Autonomy.

China’s Electric Ambitions. As I said on Twitter this week, “China will reap massive socio-economic benefits in the era of alt-energy vehicles. It won’t be dissimilar from the American automobile era of the 1900s.” Related, EVs Enter Phase of Fastest Growth.

Ford’s Ambitions for A Connected Car App Store. Key to accomplishing this goal of a “Transportation Mobility Cloud” is the acquisition of Autonomic and a partnership with AWS. In theory, any automaker (not just Ford) can easily create intuitive apps that use real-time data using Autonomic.

The Transition to L5 AVs Will Be “Really Messy”. “As we start to see the risks changing, and consumer preferences changing, we must adapt from an insurance product standpoint. We have to think about these changes and prepare for them, and then when they do happen - perhaps not in the way we expect or when we expect – we have to be willing to adjust to that and remain relevant to the consumer. That consumer relevance is going to be really important through time, not just today but well into the future.”

Tesla Posts $700M Loss on Model 3. Amid announcements of robotaxis and full AV capabilities by year end, Tesla showed that automation alone can’t help them deliver cars to customers. Additionally, Musk was more open about a cash infusion to fund the company into the future. Also, Electric Semi Delivery is Delayed but Tesla’s Chip Innovation is Impressive.

Strategic Developments, Fundraises, M&A 💸

Fords Invests $500M in Rivian. As part of the investment, Ford will build an all-new battery electric vehicle using Rivian’s flexible skateboard platform. Could it be a new pickup truck?

KeepTruckin Raises $149M Series D. Greekoaks Capital led the round at a $1.25B valuation to fund efforts to improve freight transportation using KeepTruckin’s data assets. KeepTruckin announced it’s load matching platform earlier this month for small carriers.

Happy Returns Raises $11M from PayPal. Return investors, Upfront and US Venture Partners also participated.

Oriient Raises $4M Seed. The company has developed high-performance indoor GPS. Instead of using beacons or WiFi, it is based on Earth’s magnetic field and users’ smartphones.

Locus Robotics $26M Series C. Zebra Ventures led the round to provide a boost to production and go-to-market efforts.

Ava Robotics Raises $2.9M of a $4M Round. Ava is a spin-out from iRobot and creates remote navigation solutions to allow a robot to understand it’s environment and be navigated to an end destination.

Uber Pricing Range Announced; Paypal to Invest $500M; Q1 Loss of $1B. The $44-50 price range implies a total raise of $7.9-9B with a market cap of $84B. Paypal’s investment will extend a strategic partnership around digital wallet services. Uber also noted it expects a Q1 loss of ~$1B (from a profit of $3.7B in Q1 2018).

Hitachi Buys Robotic System Integrator, JR Automation for $1.4B. Crestview Partners had owned the JR for almost 4 years and benefited from 250%+ top line growth.

VW Enters China with Electric, L4 AV. The SUV will be VW’s second in China and also have wireless charging. VW expects to produce 22M EVs in the next 10 years with half of VW engineers focused on products for China.

US Xpress Launches US Xpress Ventures. The new business unit will be focused on developing and implementing new asset-based business models and technology strategies.

Company Building 🛠️

Martin Casado on Enterprise Go-to-Market for Startups. I pointed our portfolio companies to pay particular attention to thinking around services.

Communicating Adverse Outcomes. “I don’t think it makes sense to sugar coat it either.  You don’t need to be mean or spiteful. Just be clear, transparent, and direct.”

What Feature Should You Build Next?. A three step framework to building the highest impact feature when there are many viable options.

Who's Hiring? 👩‍💻

Customer Success at LEAF Logistics in New York, NY.

Front-end Engineer at SVT Robotics in Richmond, VA.

Senior Designer at Stord in Atlanta, GA.

Check out other jobs at Dynamo portfolio companies.

❤️ We would love your support. Please forward to friends or share on Twitter or LinkedIn.
🗞️ If you were forwarded this and found it interesting or helpful, please sign up.
🎙 Check out Dynamo's podcast series, The Future of Supply Chain.