Dynamo Dispatch (06/29/20)

Issue 112 | 7bridges, Cazoo, Zoox

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

Weekly Commentary 💭

If you haven’t already, be sure to check out James Coombes, Co-founder and CEO of Vector AI, a Dynamo portfolio company on #55 of the Future of Supply Chain podcast. He touches on the importance of paper in global supply chains, how the Vector team is the “adapter” to turn analog documents into a digital fabric, and the benefits his early customers have gained.

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 📦

🌟📊Covid-19 Calls for More Resilient Production Chains, but That’s Easier Said Than Done. Although some firms might be encouraged to re-shore production in the wake of COVID-19, ING warns that such a commitment might actually put supply on a riskier footing. In a new report, the company’s researchers caution that reducing suppliers has the potential to make businesses less resilient by leaving them more exposed to protectionist shocks. Considering supply chains as a matter of national security: How the Coronavirus Will Reshape World Trade. Meanwhile, making the case against protectionism: The Dangerous War on Supply Chains

📊A.T. Kearney’s 2020 State of Logistics Report. “The pandemic, and global measures taken to reduce its further spread, have decimated supply chains, scrambled logistics capabilities, and destroyed huge swaths of demand. The size, shape, and timing of a recovery remain in question,” declares the consulting firm’s newly released annual report. However, in contrast to the uncertainty surrounding ocean and air freight movements, the report remains bullish on warehousing growth. Spurred by a booming demand for ecommerce and groceries, that sector alone receives recognition as “relatively steady-state.” 

Maritime Industry’s Need for Digital Transformation Surfaces. Attempts to distinguish essential goods from non-essential goods during the pandemic have highlighted the lack of seamless information flow among maritime stakeholders. American Shipper’s Kim Link-Wills posits the need for standardized digitization processes and electronic BoLs as two efforts that will lay the groundwork for industry-wide advancement. Leading the way in tech development, Alibaba Signs Up and Gives Port Community's eB/L Initiative a Boost and Flexport New Configurability Tools Hint at Broader Aims.

Warehouse Demand Surges as Retailers Reset Supply Chains.  According to CBRE Group, industrial real-estate activity from April 15 to May 14 increased 43% over the previous 30-day stretch. With demand highest for warehouses of 100K square feet or more, it is believed that retailers are not just holding more unsold goods but also beginning to guard against future demand shocks by increasing their inventories over the long term. For complementary reading, consider Covid-19’s Impact on Warehousing Might Last Longer Than the Pandemic and Gartner’s Magic Quadrant for Warehouse Management Systems.

Clothing Companies Want to Hold On to Unsold Inventory. Ralph Lauren, Columbia Sportswear, and Urban Outfitters join a growing list of retailers now stuck with excess inventory due to COVID-related lockdowns. Deciding to hold on to excess clothing in hope of selling it next year, these companies have disclosed millions of dollars in inventory obsolescence charges that acknowledge they expect to sell the items for less than their purchase price.  Looking at production, Battered Supply Chains in India Unlikely to Be Restored Soon. Meanwhile, retailers should also brace themselves in How to Prep Reverse Logistics for an Upcoming 'Flood of Returns.'

Mobility 🚗

European Car Sales Forecast to Drop by Record 25% This Year. In its first forecast since January, the European Automobile Manufacturers Association projects a mere 9.6M vehicles to be sold in the European Union in 2020 compared with 12.8M last year. Threatening one of the region’s biggest industries, the 25% decline would be the largest percentage drop on record. In the US an interesting trend has emerged in post-COVID car sales: Drivers Aren't Just Buying More Cars Than They Were a Month Ago — They're Buying Bigger Ones.

🌟Meet the Apple Key. It turns out that Apple’s ambitions in mobility might be better executed via the iPhone. BMW will be the first OEM to use the iPhone as a digital key and move us another step towards ditching our keys and wallet. Also from WWDC, Apple Maps Gets Electric Vehicle Routing to Find EV Chargers while Google Maps May Offer Routes Connecting Bikes and Cars to Public Transit.

FAA to Start Boeing 737 MAX Test Flights. US regulators are slated to conduct key airborne checks of Boeing’s 737 MAX beginning as early as today. After being grounded for 15 months following 2 accidents killing 346 people, the announcement by the Federal Aviation Administration gives hope to industry officials that the planes might return to service by the end of this year.

US Airlines Raise $10B in a Week. Alaska, American, and United collectively raise more than $10B as airlines across the country seek to slow down daily cash outflows. “There is a lot of creativity in how to access capital,” observed John McClain of Diamond Hill Capital Management. “For companies like these, anything that isn’t bolted to the wall is for sale right now.” In a separate announcement sure to upset passengers, American, United Airlines End Social Distancing, Will Book Flights to Full Capacity.

📊Cybersecurity in Automotive: Mastering the Challenge. In collaboration with the Global Semiconductor Alliance, McKinsey finds that the automotive cybersecurity market will double in the coming decade, reaching $9.7B by 2030. Key predictions of the report are 1) OEM expanding vertically to build their own cybersecurity components or software stacks, 2) suppliers moving both up and down the value chain by offering specialized consulting services, and 3) semiconductor companies pushing up the value chain with optimized software for their chips. In headlines showing the shift in cars to become computers on wheels, Mercedes and Nvidia Announce the Advent of the Software-Defined Car and Volkswagen Seeks Open-Source Approach to Refine Car Operating System.

Fundraises, M&A, Talent 💸

7bridges Raises $3.4M Seed Co-Led by Crane Venture Partners and LocalGlobe. The London-based startup has developed a logistics engine optimization to automate processes and consolidate data within a single user interface. The new funds will support the company’s global expansion. 

DriveU.auto Raises $4M Round Led by RAD Group Co-Founder Zohar Zisapel. Emerging from stealth, the Israeli startup has built a connectivity platform for safe teleoperations. Originally a unit within video transmission company LiveU, the startup has spun itself off to focus specifically on autonomous vehicle applications. 

Yulu Raises $4M from US-based Rocketship. The micromobility startup based in Bengaluru operates a technology-driven platform that integrates public and private modes of transport.The fresh capital will support the company’s further research and development. 

Airmee Raises €4.75M Round Led by J12 Ventures. The Swedish last mile logistics startup works with retail companies and courier services to optimize urban deliveries. The new funding will support growth and profitability efforts.

Third Wave Raises  $15M Series A Led by Innovation Endeavors. The Californian startup combines deep learning and modern robotics to build autonomous forklift technology. Also participating in the round were Eclipse Ventures, Homebrew VC, Toyota AI Ventures and Heartland VC.

Almotive Raises $20M Round Led by Lead Ventures. Based in Budapest, Almotive is developing simulation tools for self-driving cars and advanced driver assistance. The fresh capital will help further development of its software and support the company’s international expansion to Munich and Detroit.

Librestream Raises $24M Series D Led by the Canadian Business Growth Fund. Leveraging artificial intelligence and IoT sensor data, Librestream helps businesses automate field technician tasks and data collection. With its latest round of funding, the Canadian startup looks to expand its presence across Asia, Africa, and Latin America.

Cazoo Raises £25M Investment. The UK-based startup offers a digital platform for purchasing used cars. Launched just 6 months ago by serial entrepreneur Alex Chesterman, the latest round of funding raises the company’s valuation to more than $1B. 

DoorDash Raises $400M in New Equity Funding Led by Durable Capital Partners. Spurred by coronavirus and $120M worth of comped services in support of restaurant partners, DoorDash has raised additional funds even as it filed for its IPO. The latest raise brings DoorDash to a $16B post-money valuation. 

Amazon to Pay More Than $1 Billion for Self-Driving Car Developer Zoox. Following investments in AV startups Aurora and Embark, Amazon announces its acquisition of Zoox, a Foster City-based startup seeking to build self-driving passenger vehicles from the ground up. Per Amazon, Zoox will remain a standalone business with CEO Aicha Evans and CTO Jesse Levinson remaining at the helm. 

Company Building 🛠️

OpenView: SaaS Product Led Growth Survey. Check out Slide 10 (on the growth of PLG companies in early days vs at $10M ARR), Slide 19 (persistence and consistency in messaging), and Slide 33 (the jury’s still out on growth teams).

What Growth Investors Look for in SaaS Companies. Yasmin Razavi, GP at Spark provides her framework for identifying winning SaaS businesses at the growth stage.

Board Diversity. Fred Wilson makes a few suggestions to improve the diversity of startup boards. Given VCs are not control investors, “this is a process of advocacy and persistence.” The idea of limiting the # of VCs on a startup board would depart from the norm but rolling them off over-time can prove to be more useful for all parties- we tend to roll off by Series B (or earlier in most other instances).

Who's Hiring? 👩‍💻

Director, Go-To-Market Systems & Operations at Skupos in Denver, CO.

Freight Logistics Coordinator at Stord in Springfield, MO.

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

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.