Dynamo Dispatch (05/04/20)

Issue 105 | Otonomo, Amply Power, Deliverect

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

💥 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.

Weekly Commentary 💭

We continue to navigate the currents created by COVID-19 across both supply chain and mobility. Earnings season is in full swing so we get a sampling (albeit likely only a one-quarter) of the impact the virus has had on publically-traded companies. Consider UPS has slashed $1B of planned capex as the last mile network is under on-going profitability pressure, Amazon plans to reinvest any profits despite pressures on profitability (hat tip to Shopify’s new Shop app), while Buffet sold all airline holdings and sits on the sideline.

We expect to see demand pressures throughout Q2 and even into Q3 as the Us looks for a framework to return society back to some sense of a new normal. As a firm, we remain committed to investing in great teams building in large opportunity areas as we enter an era where supply chain technology sits at the forefront of conversations.

We Are Dynamo,

Santosh, Ted, Barry, and Jon

Note: please add “dynamo@substack.com” to your email client so you don’t miss future issues due to aggressive spam filters.

Supply Chain 📦

📊 PwC’s COVID-19 CFO Pulse Survey. We continue to see supply chain emerge from COVID-19 as a focal point for organizations. “Findings show CFOs prioritizing specific actions: 56% cite developing alternate options for sourcing, and 54% say better understanding the financial and operational health of their suppliers.”

Index: Rail Volumes and Trucking Spot Rates May Have “Bottomed Out”. Covid-19 recovery indexes released this week by research firm FTR Transportation Intelligence suggest that both the trucking spot market and rail volumes are unlikely to slump further. “Once we start to see things picking up, the trajectory of the restart will help us better understand whether this is a ‘U-shaped’ recovery or a ‘V-shaped’ recovery. We expect transportation metrics to be a leading indicator of the broader economic conditions,” said FTR chairman and CEO Eric Starks. In other rail news, Railroads on Track to Meet PTC Deadline, GAO Reports

The Algorithms Big Companies Use to Manage Their Supply Chains Don’t Work During Pandemics. Drastic changes in the country’s transportation, production, and purchasing behavior under Covid-19 has led to unprecedented swings in the data informing big retailers’ forecasting models. Given the difficulty of refining their algorithms on the fly, many businesses are now relying on the expertise of human demand planners to inform their forecasting decisions through the crisis. It’s not just retailers who have been caught flat-footed by coronavirus, as the WSJ points out Miscalculation at Every Level Left US Unequipped to Fight Coronavirus. As such, MIT professor David Simchi-Levi makes a compelling case for why We Need a Stress Test for Critical Supply Chains.

The Pandemic Will Change American Retail Forever. The Atlantic’s Derek Thompson ponders the long term implications for retail and urban life amidst the threat of contagion. Among his predictions: the dominance of e-commerce over physical retail, the shift of in-person dining to cloud kitchen deliveries, and paradoxically the resurgence of cities as more white-collar workers relocate to suburbs giving small businesses an opportunity to reassert themselves in what Thompson calls a “renaissance of affordability.” Related: Consumers Trying New Retailers More Often; Spending Less on Non-Essentials.

China-Europe Freight Rail Service Hits Monthly Record High in April. Freight trips between China and Europe have grown 46% year-on-year with a record high 979 trips in April. Considered a valuable showcase of China’s Belt and Road Initiative, the trains have carried 262,000 standard-sized shipping containers (including 3,142 tons of personal protection equipment) between the two regions over the past four months.  Also tackling cross-continental shipments, Trucks Are Filling a 6,000 Mile Beijing-to-Berlin Supply Gap and Logistics Company Launches Private Airline for China Shuttle.

🌟Coronavirus Upheaval Triggers Corporate Search for Supply Chain Technology. Concerns over viral transmission are at last pushing legacy operators to upgrade their supply chain technology. Industry players have noted a spike not only in warehouse automation but also in systems reducing physical paperwork as companies look to streamline their operations while limiting person-to-person contact. Bullish on IoT and delivery robots, DHL weighs in Big Words vs Big Inventions: Which Tech Innovations Have Lived Up to Their Promise?

Manna Flies Medicine to Elderly in Ireland. Dynamo portfolio company, Manna is working with the Irish  Health authority to deliver medicines and other essential supplies to vulnerable people in the small rural town of Moneygall. Elsewhere, governments greenlight UPS to Fly Medications by Drone to Florida Retirement Community and UK Trials Medical Delivery Drones for COVID-19 Supply Runs. Also, check out the re-air of the Future of Supply Chain podcast with Zehra Akbar of Skygrid.

Spoiling Rice in Vietnam Show Perils of Food Protectionism. The struggle of rice exporters in Vietnam is emblematic of the policy changes faced by many private businesses throughout the global food supply chain. With traders uncertain about government adjustments to the national export quota, hundreds of thousands of tons of rice have piled up at the nation’s ports, being spoiled instead of sold. For a look at what’s happening stateside, The Counter offers An Explanation for Why Farms Have Dumped Produce They Can’t Sell.

Mobility 🚗

COVID-19’s Impact on Personal Auto Insurance. Although the majority of insurers have implemented premium relief programs in the wake of coronavirus, stark differences in refund size and timeline suggest a lack of consensus on how driving behavior has been impacted by COVID-19. Given that the relief packages offered so far are not proportional to the changes in personal driving, Dynamo portfolio company Mobikit recommends carriers make the switch usage-based insurance (UBI) to better quantify risk exposure and generate tailored rates over shorter intervals. 

Off Road, but Not Offline: How Simulation Helps Advance Waymo Driver. Despite suspending on-the-road operations, autonomous driving tech company Waymo is still conducting 20 million miles of simulated driving per day. Building on its data acquired through physical deployment, the company has been able to modify a given scenario in simulation and amplify its learning through synthetic scenarios that have yet to be encountered in the real world. In related research, engineers at UC Berkeley explain The Ingredients of Real World Robotic Reinforcement Learning.

🌟Are Electric Vehicles Doomed? While Covid-19 might have dampened EV sales for the coming year, Ars Technica argues against short-sighted pessimism: “expectations have simply outpaced tremendous progress.” Among the trends that make them bullish are the upcoming release of electric SUVs and crossovers better suited for consumer tastes, advancements in the electrification of heavy duty vehicles, and the shifting headwinds in Washington that might push up the federal gas tax and encourage the purchase of EVs. In related news: SK Innovation to Spend $1.5B on Georgia Plants, as ‘Center’ of World EV Battery Industry

Automakers Outline Reopening Plans. Carmakers on opposite sides of the Atlantic have taken divergent paths as they consider when to restart production.  BMW, Audi, and Volkswagen have reopened their German plants, albeit at limited capacity. Toyota meanwhile has pushed back its North American restart date to 11 May. GM, Ford, and FCA meanwhile have not officially announced their return although it has been tentatively scheduled for 18 May. ICYMI, Tesla Earns $350M+ on Regulatory Credits from Other OEMs.

The Pandemic Pace: A Look at Congestion-Free Speeding and Its Risks. In the wake of coronavirus, personal car travel has declined nationally by 41%. Crashes, however, have not been dropping at the same rate as traffic. With much of America moving at “congestion-free” speeds, city planners are moving beyond theory-based predictions as they gather transit data and refine their models for the future of safe transportation.

New York City Subways Won’t Run 24 Hours a Day During Pandemic. Starting 6 May, the city that never sleeps will be giving its trains a rest. In an unprecedented move for the MTA, all 472 stations will close between 1AM and 5AM each day to allow for cleaning. Until further notice, the estimated 11,000 riders who use the trains between those hours will be offered alternative transportation via buses or for-hire vehicles. Speaking of cities, our friends at Toyota AI Ventures Extends Call for Connected City Innovations.

As Red Ink Begins to Flood Bottom Lines, the Mega-Airlines Begin to Unravel. The steep decline in international travel has shown to impact large hub-and-spoke airlines that rely on global alliances more severely than point-to-point operators like Southwest. Following a first quarter loss of €535M, British Airways announced this past week that it will likely cut 12,000 jobs, approximately one quarter of its workforce. With a ‘tsunami’ of airline job losses already beginning in Europe, some fear US Carriers Could Be Next. As job cuts rack up, analysts debate whether An $85 Billion Airline Rescue May Only Prolong the Pain

Fundraises, M&A, Talent 💸

Buymie Raises €2.2M Led by Act Venture Capital. The Irish grocery delivery startup is currently available to over 490,000 households across the Emerald Isle. The investment will help drive the company’s overseas expansion.

Amply Power Raises $13.2M Series A Led by Obvious Ventures. Based in Mountain View, the startup has developed a smart charger for electric vehicles. Amply plans to use the fresh capital to expand its team and customer deployments.

ForwardX Robotics Raises $15M Series B Led by China Merchants Capital. The Beijing-based autonomous robot platform initially built self-driven suitcases that used computer vision to track owners and avoid obstacles. The company has since pivoted to warehouse applications for its technology and plans to use its new funds to support production and international expansion.

Deliverect Raises €16.25M Series B Led by OMERS Ventures. Founded in 2018, the startup integrates third-party online ordering platforms including Uber Eats and Doordash into restaurants’ point-of-sale systems. Waiving set up fees since the outbreak of COVID-19, the Belgian startup aims to become the global gateway for online food ordering and delivery.

Material Bank Raises $28M Series B Led by Bain Capital. The three-year-old startup has developed a logistics platform for architects and designers to search and sample materials from hundreds of manufacturers. The new funds will help build a second logistics facility near its existing hub in Memphis and expand into new product categories.

Brain Corp. Raises $36M Series D Led by SoftBank Vision Fund 1. The San Diego-based startup has developed autonomous mobile robots for industry cleaning. With the new funding, the company looks to build out its machines’ shelf analytics and inventory delivery capabilities.

Otonomo Raises $46M Series C. Developers of a data exchange platform, Otonomo helps monetize data collected by smart cars, acting as a middleman between carmakers and third-party companies. The Israeli startup will dedicate the new capital to expansion and research and development.

Cheetah Raises $36M from Eclipse. Cheetah offers contactless delivery of food and related supplies. The company pivoted from B2B to B2C amid COVID-19 wiping out demand from its traditional restaurant markets. New funds will be used to support the pivot.

Nexar Raises $52M Series C Led by Corner Ventures. The five-year-old Israeli company has developed an AI dashcam application that uses deep learning to detect and help avoid driving hazards. Providing visibility into traffic congestion, the company has also positioned itself to support smart city initiatives through the aggregated data it collects from users.  

Inceptio Technology Raises $100M Series A Led by GLP. The China-based company builds autonomous heavy-duty trucks with the aim of developing a self-driving freight network by 2022. The business plans to use its latest investment to support commercial trials. 

Nio Secures $1B Investment from State-Owned Companies. Tesla’s Chinese rival, Nio designs and manufactures electric vehicles. Turning to state-owned entities from Anhui province, the cash-strapped company has given up a 24.1% stake in the company and promised to relocate its headquarters to the provincial capital Hefei.

Intel to Buy Smart Urban Transit Startup Moovit for $1B. Multiple sources report that the chip giant is in the final stages of acquisition for Moovit, the developer of a public transportation application that monitors traffic and offers transit recommendations to some 800 million people across the world. It is suggested that with the purchase Moovit will join Intel’s Israeli automotive hub, using its traffic data and intelligent routing to support autonomous vehicle development.

Uber’s CTO Thuan Pham Steps Down. Hired in 2013, Thuan Pham is the last holdover from the Travis Kalanick era to depart the ride hail giant. An American success story, Pham escaped Vietnam as a refugee at the age of twelve before arriving in the US where he studied at MIT and began his career in Silicon Valley.

Lyft to Lay Off 17% of Staff. The company announces it will pare down its workforce to 982 employees while furloughing an additional 288 in the aftermath of Covid-19. The move comes less than 24 hours after rival Uber announced its own plans to Lay Off 20% of Employees. Share prices of both companies rose in the wake of the announcements; however, the true reckoning will come in the week ahead as the two companies report earnings on May 6th and 7th respectively.

Company Building 🛠️

Growth Loops > Funnels. “The fastest-growing products are better represented as a system of loops, not funnels. Loops are closed systems where the inputs through some process generate more of an output that can be reinvested in the input. There are growth loops that serve different value creation including new users, returning users, defensibility, or efficiency.”

How to Build a Breakthrough. The Marvelous Maples introduces us to the concept of “backcasting” that he believes is helpful in creating breakthroughs. It allows visionary founders to start from their vision of the future and backcasting to the present to build their company. 

Mark Suster on the Current VC Market. Suster sits with Harry Stebbings to discuss the current state of VC across enterprise and consumer. His thoughts on Series A for enterprise startups certainly mirrors ours - “In a market where people aren’t just paid to “innovate” but will need to show real economic value, expect gains to come more slowly. Burn through your cash quickly at your peril.”

Who's Hiring? 👩‍💻

ML Engineer at Vector AI in London, UK.

Network Engineer at Gatik in Palo Alto, CA.

Front End Developer at SVT Robotics in Norfolk, VA (open to remote).

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.