Dynamo Dispatch (05/11/20)

Issue 106 | nextmv, SVT Robotics, Ninja Van

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 💭

We have spent the last couple of months brainstorming ways to elevate the ecosystem despite the headwinds from COVID-19. We ended up settling on the concept of a bi-quarterly webinar series called, Corporate Camp. This is a shippers only, virtual series to discuss relevant topics as it pertains to supply chain, technology, and innovation. Each session will be 45 minutes over a lunch hour and considered a safe space among like-minded people. If you are a shipper and want an invite to our first event in late May, send Santosh an email at santosh@dynamo.vc - there are limited spots to ensure it’s approachable and conducive to conversation.

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 📦

3D Printing Finally Found Its Market, and All It Took Was a Pandemic. The recent demand spike for medical equipment has helped reveal the opportunities and obstacles for 3D printing to fill supply chain gaps. While HP and others have leveraged the technology to make thousands of masks, face shields, and ventilator parts, 3D printing has yet to achieve the price and output of such items to compete head to head with traditional manufacturing techniques post-crisis. Meanwhile, large manufacturers might consider that Wearables Could Be Key for Worker Safety as Warehouses Eager to Reopen. 

Sourcing PPE Dominates Air Capacity, but More Lift Is on the Way. Spurred by governments looking to secure PPE at almost any cost, spot rates out of China have reached as much as $18/kg. However, charter rates appear to have plateaued as additional passenger planes have been converted for cargo missions. Also seeing increased shipments of medical equipment, freight forwarder Expeditors Remains Bullish Despite Volume Decline, and Still Fully Staffed Despite Crisis.

Gatik Responds to Online Grocery Demand, Adding Autonomous Reefers for Walmart, Retailers. Dynamo portfolio company Gatik has announced this week it will add more than 10 temperature-controlled box trucks to its self-driving middle mile fleet. Working with Walmart and other retailers, Gatik has supported the increased throughput rates of refrigerated, frozen, and fresh groceries on fixed routes between stores and micro-fulfillment centers.

America’s Meat Shortage Is More Serious Than Your Missing Hamburgers. It’s no joke asking “Where’s the beef?” when Meatpacking Plant Shutdowns Lead to Hamburger Shortages at Hundreds of Wendy's. As Recode explains, the top four beef processors account for more than 80% of the heifer slaughter. With COVID outbreaks shutting down processing sites, the entire meat supply chain from farmers to restaurants could be thrown into turmoil as bottlenecks lead to worsening animal conditions and spoiled food. 

North American Rail Volumes Could Dip in the Double Digits. In the latest report from Moody’s Investor Service, 2020 North American rail volumes are projected to fall by as much as 15% from the previous year.  Significant declines in coal traffic and automotive volume account for the uncertain projection through the end of the year. To see how operators are already being impacted: BNSF Railway Cutting Hundreds of Jobs, Closing Some Facilities.

🌟Amazon Quietly Rolled Out Its 'Uber for Trucking' Service to 48 States. Aiming for a bigger slice of the digital freight brokerage pie, the retailing giant expanded its service in March to cover the continental US without any public announcement. Given the billions of Amazon packages that cross the country, the move into brokerage provides natural synergies with its e-commerce business as it looks to challenge incumbents like CH Robinson and XPO Logistics. Meanwhile, Uber Freight Has Moved Tens of Thousands of Touchless Loads but Posts Loss in Q1

Some Shipping Lines May Not Survive Downturn, Hapag-Lloyd Chief Says. Rolf Habben Jansen, chief executive of Germany’s biggest shipping company, has warned that some shipping companies will likely go under if the global trade downturn continues through 2021. “We are looking at a difficult second and third quarter. If a recovery starts in the third quarter, all the top 10 liners will be standing at the end of the year. If it’s going to take longer, then it may become more difficult for some” to survive, he said. 

COVID-19 Brings Opportunities for Cloud-Based Software Solutions. As businesses reassess their operations amidst the coronavirus, Dynamo partner Santosh Sankar argues that the current crisis could catalyze the adoption of cloud-based SaaS solutions within international logistics. Offering interoperability with legacy systems and cost savings of 30 percent or more, such investments in technology not only improve efficiency today but are likely to set the course for long term success over the coming decade. Also looking ahead, Andreessen Horowitz weighs in on the opportunity for job platforms post-crisis in COVID-19 and the Great Rehiring

Mobility 🚗

Self-Driving Unicorn Zoox Shops For A Buyer. The six-year-old company had raised more than $1B in venture funding on the premise that custom-built vehicles would ultimately outperform the design constraints of legacy manufacturers. In today’s market uncertain about the future of mobility, the autonomous vehicle startup has instead offered itself up for sale with OEMs or logistics giants like Amazon and JD seen as potential purchasers. For a peek into its competitor Argo, check out The Relentless Startup Fast-Tracking Ford’s Self-Driving Cars

Auto Sales Crashed In April But There Are Reasons For Optimism. Barring an unexpected nosedive, experts believe that used-cars sales have already bottomed out during the four week stretch between mid-March and mid-April when shelter-in-place orders went into effect. After initial estimates that sales would drop more than 70% for April, it appears the actual decline will be closer to 40%. Anticipating that demand for cars could rise to 80% of pre-pandemic levels by the end of May, ad agencies are also bullish that U.S. Demand for Cars to Rebound while Travel, Dining Lag

Researchers Close to Enabling Electric Cars to Recharge Themselves Wirelessly. In a recently published article, a team of Stanford engineers has demonstrated a practical way to wirelessly recharge robots and moving cars in the span of milliseconds. At scale, the advancement in wireless-transmission technology could refuel an electric vehicle with hundreds of kilowatts even at speeds of 70 mph by simply driving across a four-foot charging zone. 

🌟Why Empty Planes Keep Flying Through the Pandemic. Despite grounding three-quarters of their fleet, airlines like American have seen more than 99% of their flights at less than 20% capacity. The Wall Street Journal breaks down the major reasons these passenger flights still take to the skies, ranging from the essential transport of medical personnel to the operational intricacies of connecting flights. Domestic carriers are not alone in facing difficulty; across the pond, Crisis Costing Lufthansa €1M an Hour – 'Bitter Decisions' Ahead, Warns CEO.

Volvo to Sell LIDAR-Equipped Self-Driving Cars to Customers by 2022. Given the $75K price tag of most LIDAR systems, few automakers have considered putting the laser sensors into commercial vehicles. Volvo, however, is leveraging its investment in the LIDAR startup Luminar, which claims to have reduced the cost to just $1K per unit, to enable autonomous highway driving in its vehicles by 2022. In a related thought piece, McKinsey assesses The Impact of COVID-19 on Future Mobility Solutions, anticipating the near-term suspension of autonomous vehicle testing but OEMs doubling down on AV investment by 2025. 

UK Launches £250M Active Travel Fund to Promote Cycling and Walking. Announced on Saturday, the UK will support pop-up bike lanes, wider pavements, and bus-only corridors with its emergency active travel fund. Additionally, new regulations will trial the use of electric scooters in four  Future Transport Zones as the government studies their impact on public space. As the Financial Times points out, sustained private-public cooperation will be necessary as Retro Charm of Two Wheels May Not Save e-Bikes and Scooters. Also in e-scooter news: Scooter App Report: April 2020

California Sues Uber and Lyft, Saying Drivers are Employees. In its lawsuit brought Tuesday by State Attorney General Xavier Becerra, California has alleged the two ride hailing companies have illegally deprived their drivers of adequate worker protections by labeling them, independent contractors. The suit throws the gauntlet in what will likely be an extended battle between lawmakers and gig employers following the state’s enactment of Assembly Bill 5, which established stricter standards for classifying independent contractors as of 1 January. The court drama only amplifies the turmoil facing Uber and Lyft in the wake of coronavirus who along with other Shared Mobility Companies Take a U-turn to Stay on the Road.

IoT to Track Urban Mobility Changes During Pandemic. Despite government sponsorship of its contact-tracing app COVIDSafe, only 4 million Australians have downloaded the tool - approximately 16% of the population and far short of the 40% deemed necessary for it to be effective. Complementing that effort, researchers at the University of Wollongong have partnered with Meshed IoT to apply wi-fi sensing technology across transport hubs and public spaces in the country to assess urban mobility and identify transit patterns leading to infection. Also fighting COVID through data collection, Here's How the Commercial Drone Industry Can Prove Itself During the Pandemic.

Fundraises, M&A, Talent 💸

💥nextmv Raises $2.7M Seed. The latest addition to the Dynamo family, nextmv has developed a real-time, end-to-end decision automation platform that helps software engineers build and maintain complex simulation environments. Also participating in the round were FirstMark Capital, XFactor, Atypical, and 2048.

💥SVT Robotics Raises $3.5M Seed Led by Cowboy Ventures. Virginia-based SVT Robotics, a Dynamo portfolio company, utilizes machine learning for self-optimization to accelerate and simplify deployment of industrial robotics. With the investment, the startup will expand product development for its robotic Integration Platform as a Service.

BasicBlock Raises $1.5M Seed Led by Emergent Ventures. The startup provides a workflow solution enabling faster payments to truck drivers. With social distancing top of mind during the COVID crisis, BasicBlock plans to use the new funds to fuel its contact-less business solution for the trucking industry’s payment space. 

Strella Biotechnology Raises $3.3M Seed Led by Yamaha Motor Ventures and Laboratory Silicon Valley. The Philadelphia-based company has developed biosensor technology and IoT capabilities to detect the ripeness of produce as it travels through the supply chain. With the fresh injection, the team plans to expand and prepare its entrance into the retail sector.

VNDLY Raises $8.5M Series B Led by Madrona Venture Group. The Cincinnati-based company has developed a cloud-based vendor management platform that streamlines the talent sourcing and acquisition process. The fresh funds will help further product development and global expansion. 

KlearNow Raises $16M Series A Led by GreatPoint Ventures. Based in Silicon Valley, KlearNow optimizes customs clearance and document management. With the new investment, the company plans to expand its geographic footprint and further develop its platform. 

Covariant Raises $40M Series B Led by Index Ventures. The Berkeley-based startup builds universal artificial intelligence for autonomous robots. The fresh funds will support further research and development and product commercialization. 

Kurly Takes $160M In Series E Led by DST Global. South Korean grocery delivery startup plans to use the funding for hiring and opening a new fulfillment center near Seoul. Also participating in the round were Hillhouse Capital, Sequoia Capital China, Fuse Venture Partners, SK Networks, Translink Capital, and Aspex Management. 

Uber Leads $170M Investment in Lime. In the same week that Uber Lays Off 14% of Its Workforce, the ride hailing company has announced its investment in Lime. According to The Information’s initial report, Lime’s valuation has decreased 79% to $510 million with this round. Meanwhile the deal will see Lime acquire Uber’s micromobility subsidiary Jump.

Chehaoduo Raises $200M Series D+ from SoftBank Investment Advisers and Sequoia Capital China. The Chinese online car trading platform extends its $1.5B round of financing from February 2019. Founded in September 2015 as “Guazi.com,” the startup has expanded beyond its used car trading roots to also provide a new car marketplace and post-sales automobile services.

Ninja Van Raises $279M Series D Led by GeoPost. Operating across six countries in Southeast Asia, the last mile logistics company plans to use its investment to become “solidly profitable” in all markets. Other investors in the round include Grab, B Capital, and Monk’s Hill Ventures. 

Sidewalk Infrastructure Partnership Raises $400M Series A from Alphabet and the Ontario Teachers Pension Plan. A spin-off from Alphabet’s Sidewalk Labs, the new holding company will focus on long-term projects to upgrade cities’ infrastructure. To start, the group is tackling the plastics problem with a planned recycling plant incorporating robotic arms and artificial intelligence to support the circular economy. Also this week, Sidewalk Labs Abruptly Abandons Toronto Smart City Project.

Target to Acquire Same-Day Delivery Tech from Deliv. News of the purchase comes just one day after reports that same-day delivery startup would begin winding down operations. Characterized as an R&D acquisition, the deal (whose value is yet undisclosed) follows Target’s purchase of same-day service Shipt for $550M in 2017. 

Company Building 🛠️

The Recession Planning Framework for SaaS Startups. Courtesy of OpenView, this framework is worth reviewing as we calibrate/recalibrate to navigate the current economic climate.

A Virtual Events Crash Course. We ourselves are in the midst of launching a virtual event series like many of our portfolio companies. This is a great primer for all companies as they leverage tools like Zoom to recreate in-person efforts.

The Fundraising Market Has Changed. True to form, Tomasz Tunguz at Redpoint Ventures takes a data-driven approach to March fundraising data in light of the coronavirus recession. Interestingly, Seed and Series A have seen a faster decline in activity than later stage rounds. It’s important to note here that not all rounds are closed prior to being announced - we suspect much of the activity that’s been announced closed prior to the slowdown.

Who's Hiring? 👩‍💻

Customer Success Lead at Backbone in New York, NY.

Pre-Sales Automation Technician at Plus One Robotics in San Antonio, TX.

Head of Systems and Safety at Gatik in Palo Alto, CA.

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.