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 💭
You might have got a sneak peek last week but we’re happy to welcome our three new Venture Fellows, Clay, Skyler, and Lukas. Reach out and say hello!
We Are Dynamo,
Santosh, Jon, Barry, Ted, Katie, Clay, Skyler, and Lukas
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Supply Chain 📦
UP Suspending USWC–Chicago Hub Services to Clear Global IV Boxes. Union Pacific has suspended service from the West Coast to its Global IV terminal near Chicago for seven days in order to help alleviate container congestion. UP is still honoring reservations placed through Intermodal Container Transfer Facility in Long Beach but no new reservations will be accepted from the following West Coast ports: Los Angeles, Long Beach, Oakland, and Tacoma. Parking capacity at Global IV is at 99% with nearly 4K containers on stand-by. UP has already allocated a large sum of containers to its closed Global III facility which is severely understaffed. In other rail news, Pandemic Changed Rail's Product Mix as eCommerce Grew Intermodal Volumes and Lure of China-Europe Rail Amplified by Ocean Chaos.
Full Steam Ahead: Why Container Ships Are Racing Across the Pacific. According to new data from VesselsValue and MarineTraffic, vessels are moving faster in order to move more cargo despite the negative consequence of greater fuel consumption. The global average speed of large vessels this month is 16.6 knots which is 11% higher than the average for all ships. If a carrier can squeeze in a few more trips, that can have a significant positive impact on revenue since real estate on these ships is selling for a pretty penny. In other container news, Levi's Diverts Freight to East Coast Amid 'Challenge in Long Beach' and Maersk Revamps Network in West and Central Asia to Get Cargo to Market Faster.
Cushman & Wakefield: US Industrial Real Estate Market Setting Supply/Demand Records. Demand for industrial space is breaking records currently. Q2 of 2021 is the second quarter in a row where demand is outpacing supply. The market absorbed 110.2 million square feet in Q2 2021 which is the most space ever absorbed in a quarter of any year. C&W predicts that demand will remain strong through the end of the year, but by then, new space will allow for quick absorption of demand which will help ease the imbalance of supply and demand. In related news, Warehouse rents climb in Q2 as e-commerce drives demand: Cushman & Wakefield.
Estes First Major LTL Carrier to Deploy Trailer Tracking. eCommerce is booming to historic levels and Estes Express is now deploying trailer tracking to effectively utilize capacity. The LTL carrier has partnered with tech vendor Spireon in hopes of upgrading its fleet with 4G and 5G devices to automate dock, yard, pickup, and delivery processes. The new technology will save drivers precious time and expand operational efficiency. Spireon plans to outfit the fleet with the new platform at a rate of 1,000 trailers per week. In related news, Uber Freight Expands Truckload Brokerage Product Into LTL Sector and Technology Comes to the Rescue When LTL Capacity Disappears.
Walmart Will Add Transportation Pillar to Project Gigaton. The main purpose behind Project Gigatron is to avoid one billion metric tons of greenhouse gases in scope 3 emissions by 2040. The new pillar is intended to encourage Walmart’s product suppliers, specifically those who have their own fleet, to reduce and report emissions. While a large number of suppliers are participating in the program, Zach Freeze, Walmart’s senior director of sustainability, shared that not every supplier is actively participating. The retailer’s emission reduction efforts are influencing carriers, such as Knight-Swift, Schnieder, and American Airlines, who are placing more focus on adding sustainable options. Also, Crowley Developing First Electric Tug while others debate Freight Rail Electrification Can Exist in North America — the Question is Where.
Return Scams Jump as Fraudsters Exploit eCommerce Boom. Here’s something you may have never heard before: retail fraud costs the overall US economy tens of billions of dollars every year. Crazy, right? Retailers are seeing an increasingly large number of fraudulent returns from customers who claim they never received packages at their doorstep. Forter, which provides fraud-prevention technology to retailers, said some clients saw a 33% increase of “item not receive” abuse over the last year thanks in part to stay-at-home mandates put in place. In food delivery, Drones Might Be the Future.
Cargo Owners Applaud Biden Directive on Increased Competitiveness in Ocean and Rail. The executive order put in place by President Biden serves to level the playing field between large corporations and customers, workers, and smaller businesses by promoting business competitiveness. The order doesn’t give any new authority to the Federal Maritime Commission or the Surface Transportation Board, but highlights tactics, such as reciprocal switching and detention and demurrage fees, that are being used to rack up charges as ports across the country experience heightened levels of congestion. Cargo owners are praising President Biden’s efforts but suggest that stronger regulatory action and potential legislation should be used to settle the deep-rooted concerns over transport fees. Unrelated, Why US Xpress Bet on AVs.
Mobility 🚗
EU Proposes Effective Ban on New Fossil Fuel Vehicles. The transition from classic ICE to EVs is undoubtedly in full swing. Almost all car manufacturers are launching electric vehicles. In order to cement and guarantee a quick transition the EU is proposing to set a hard deadline for manufacturers to make the complete switch. This notion doesn’t sit well with all EU members however with Germany and France Pushing Back.
Lufthansa Released Their 2021 Report on the State of Air Taxis. With the ever-increasing media coverage and buzz around air taxis, the narrative goes mainstream, paving the way for a nascent industry that is still in its early days. With the technological advancements in battery density, material science, and autonomous systems in the last decade, the future of autonomous taxis is becoming ever more palpable. On the ground, Lyft Resumes Ride Sharing but European Railways Still Under Pressure Due to Pandemic.
With the Increasing Number of Electric Cars, Battery Fires are Becoming More Frequent. With the increasing number of electric vehicles on the road, the number of battery fires is increasing as well. This brings up frequent discussion relating to the safety of electric vehicles, especially with companies like GM having to issue recalls on the Chevy Bolt. The numbers do paint a different picture though, with just 1 electric car fire in 205M miles driven vs. 1 internal combustion engine car fire in 19M miles driven. Also in EV safety, Battery Research is Progressing to Make Safer Batteries and ICYMI, Porsche is Issuing a Large-Scale Recall for Sudden Power Loss.
Spain Committing $5.1B to Boost the EV Industry. Using EU funds allocated to Spain in the wake of the pandemic, Spain is actively investing in all parts of the car manufacturing supply chain, from lithium extraction to battery assembly lines to better tackle the uptake in demand for electric vehicles. In the world of electrification, How Bi-Directional Charging Could Transform Our Electricity Grid while Honda Open to New Alliance to Make EV Profitable.
Rivian Delays Deliveries Due to Supply Chain Issues. The effects of pandemic-related supply chain problems forced Rivian to push back the first deliveries of the R1T pickup. According to Rivian, “Everything from facility construction to equipment installation, to vehicle component supply has been impacted.” Related, Ford Solves It's Chip Supply Shortage for the F150 while in Asia, TSMC Thinks Global Ship Shortage is Ending but in the US, Private Car Ownership Demand Continues to Outstrip Supply.
WEF: Smart City Governance Lacking. The WEF White Paper recommends cities should improve governance practices to build resilience and improve technological practices. The recommendations apply to all aspects of cities, ranging from digital infrastructure and open data to cyber accountability. With the increasing number of cyber threats and increased digitization more areas are vulnerable than ever before, a rising trend, requiring not just the creation of a policy, but also the efficient implementation of those policies.
VW Lays Out Broad New Software and AV-oriented Strategy. The VW Group has released its new AV-oriented strategy, with a goal to produce one software platform (Cariad) that will be common across the entire VW group. The VW group expects this to result in a decrease in R&D spending, as well as produce an increase in the operating return on sales (from currently 7% to 7-8%). See the company presentation here. Related, Tesla Trying to Offer Self Driving as a Subscription (note Tesla’s are not self driving).
Fundraises and M&A 💸
Whisper Aero Emerges from Stealth to Quiet Drones and Air Taxis. Whisper Aero is designing an electric thruster that will bring noise levels down to ambient background noise. While Whisper is flying the details of the design under the radar, the company has shared that it raised $7.5 million from a list of investment firms including Lux Capital, Menlo Ventures, and Robert Downing Jr.’s Footprint Coalition Ventures in an effort to perfect the thruster’s design and capabilities in order to be both scalable and affordable to manufacture. Whisper then plans to enter the small drone market in 2023 before moving on to air taxis.
Climate X Raises $1.5M Led by Pale Blue Dot. Climate X is ushering a new perspective on the physical and economic impacts of climate change. Through the utilization of risk models and machine learning, Climate X can project the costs to specific assets or a geographic region of a natural disaster or general threat of global emission. After concluding this pre-seed round, founders Kamil Kluza and Lucky Ahmed have shared their confusion of why climate risks are not considered in prices, valuations, and investment strategies.
Vaayu Raises $1.6M Led by CapitalT. ESG centric startup Vaayu is integrating various point of sale systems, logistics, and operational monitoring systems to simplify the carbon tracking process. Vaayu has chosen to vertically approach this problem within retail as they have identified retail as a disproportionate amount of carbon emissions. Vaayu currently has 25 global brand customers and seeks to add more customers by leveraging their quick implementation, made for easy adoption.
Speero Raises $1.8M Led by Nuwa Capital & Eq2 Ventures. Founded in 2017, Speero allows car owners to search for spare parts and after-market components to upgrade or fix their vehicles. Based in Riyadh, Speero has over 1,000 partners and service providers, as well they have catalogs for Toyota, Hyundai, Kia, and Lexus. The capital will be utilized to build a logistics infrastructure with automated warehouses and expand the management team.
Madrid-Based Freight Transport Startup, Trucksters Closes €6.3M to Accelerate the European Expansion. Trucksters is making headlines in the EU by reducing freight transit times by 50% all the while giving drivers more nights to spend at home. The Series A financing round, led by Kibo Ventures, one of Spain’s leading VC firms, will be used to expand international operations, grow the current team, and broaden Truckster’s current routing capabilities.
Micromobility Operator Veo Raises $16M to Fund US Expansion. Veo specializes in manufacturing its own electric scooters and bikes in a sustainable way. The micromobilty company chose to withhold from funding for as long as possible, opting to raise its own capital until funding was absolutely necessary. The Series A round, led by AutoTech Ventures, will be used to expand Veo’s network and build new partnerships within the communities it operates in.
NoTraffic Raises $17.5M Led by Nielsen Ventures and Balderton Capital. Israeli-based NoTraffic is trying to eliminate road congestion with the use of radar and computer vision to feed into AI to determine traffic light optimization. This system will detect the type of vehicles, the number of vehicles per lane, and how many vehicles are expected to go to each of the next traffic lights. This series A funding will go towards expanding the team to over 100 by 2022 and help expand into new markets.
Algolux Raises $18.4M Led by Drive Capital & Forté Ventures. Algolux, based in Quebec develops vision technologies for autonomous vehicles, in which image optimization provides safer rides for passengers. This series B funding will help Algolux expedite adoption practices in which they believe that camera shipments will break 300M units by 2025.
Specright Raises $30M in Series B Funding. Specright provides cloud-based Specification software for suppliers, manufacturers, and retailers who have been using PDFs or spreadsheets as primary databases. The platform opens the door for customers to easily share specs with critical partners. Sageview Capital led the Series B round and the funds raised will be primarily used to expand operations and double the size of the current team.
Heart Aerospace Raises $35M Led by Breakthrough Energy Ventures & Mesa Air Group. Based in Sweden, the electric aviation startup has already debuted their 19 passenger ES-19 aircraft and expect that it will be ready for commercial use by 2026. Receiving their largest order to date of 200 aircraft from both United Airlines and Mesa air group with the option to purchase up to 100 additional aircraft. Heart Aerospace founder Anders Forslund shares how short distance travel will be the early focus due to a reduction in charging time between flights to increase the frequency of departures.
Shopmonkey Raises $75M Led by Bessemer Venture Partners & Index Ventures. In the legacy industry of auto repair shops, Shopmonkey strives to digitize the industry from replacing old POS systems to notes and receipts. The California-based startup will utilize the capital to expand marketing and sales teams, as well as expand product capabilities.
Delhivery Raises $100M Led by FedEx Express. Based in Gurgaon India, Delhivery provides a suite of logistics services that they have digitized in order to provide access to buyers and sellers by connecting transport solutions to cosigners. This deal with FedEx Express also strikes a partnership between the two firms as FedEx will focus on international trade coming in and out of India while Delhivery focuses on domestic. Delhivery currently provides services to 17,500 zip codes in India and will apply the capital to expand across India.
Flock Safety Raises $150M Led by Andreessen Horowitz. Atlanta’s Flock Safety has developed a public safety operating system and camera that integrates to identify vehicles beyond license plates. Flock Safety’s original enter market strategy was to act as a neighborhood watch in local communities. Their success and traction soon attracted government entities, now utilized in over 40 states and already play a role in 1% of solved crimes in the United States.
Netradyne Raises $150M Led by SoftBank Vision Fund. With the goal of improving commercial driver safety, their current product Driverri is an in-vehicle mounted camera that will reward positive driver behavior and suggest areas for improvement. Netradyne has partnered with Amazon to install this software and hardware into their delivery vehicles. In a time where questions of Amazon’s priorities regarding efficiency and driver conditions are prevalent, Netradyne seeks to provide insights. Netradyne will enter new markets with the new capital.
Elevate Brands Raises $250M Led by FJ Labs, Novel TMT & More. Elevate Brands, takes existing Amazon FBA brands, acquires them, then optimizes them to their full potential. This Austin and New York-based startup has raised over $300M since late February but is already profitable while operating 25 FBA brands currently. The capital will be utilized to enhance evaluation algorithms and continue to increase organizational growth.
Toyota’s Woven Planet Acquires HD Mapping Startup Carmera. Carmera provides autonomous vehicle customers ranging from traditional automakers to robotaxis to suppliers with high-definition maps. The undisclosed amount raised was led by Toyota entity Woven Planet Holdings, who recently acquired Level 5, Lyft’s autonomous vehicle unit, for $550 million. Carmera will serve as Woven Planet’s auto-mapping platform HQ stationed in the United States.
Thoma Bravo will Take Stamps.com Private for $6.6B. With a total of $78B in assets under management, Thoma Bravo will pay a 67% premium to Stamps.com closing price of July 8th, under the ticker STMP. Investor rights law firm, Halper Sadeh LLP, is investigating whether this is a fair practice by the parties involved. Stamps.com CEO, Kenneth Mcbride, has 40 days to solicit and consider alternative routes.
Warehouse for Amazon Aims to Go Public as Single-Property Business. Unheard of until now, a startup is attempting to become the first public company to own one property. Rox Financial LP plans to use an IPO to create a real estate investment fund that will acquire the 146,000 square-foot warehouse currently leased to Amazon. Rox Financial is offering 8,250,000 shares at $10 a share and intends on collecting more warehouses in the future to lease to the eCommerce giant.
SPAC Radar 📡
SES in $3.6B SPAC Process with Ivanhoe Capital Acquisition Corp. SES Holdings, supplier of lithium-metal batteries, announced on Tuesday that it was pursuing a public offering via SPAC. SES see’s lithium-metal batteries as a cheaper alternative to the lithium-ion batteries currently used in electric vehicles as well as increase the energy density. SES is expected to gain $600M in cash at the close of the transaction and will be utilized to accelerate growth and begin preparing for commercialization in 2025.
Aurora Looks to Close $13B SPAC with Reinvent Technology Partners. After acquiring Uber’s autonomous driving arm only 7 months earlier, Aurora is raising more capital to prepare to bring their product to market. Founded only 4 years ago, Aurora is developing autonomous vehicles for both consumers and logistics carriers, leveraging partnerships with automakers to narrow focus on autonomy. Aurora shared that it is expected to have roughly $2.5B in cash at the close of this deal which will provide resources for further development and getting their product to market.
Company Building 🛠️
Balancing the Art of Valuation with the Science of Dilution. Worthwhile session for first time founders who might find VC valuations to be akin to “gypsy finance” as one has put it to me. We’ll note that for the first several rounds, optimizing for the right firm is always better than optimizing for valuation.
Only a Term Sheet is a Term Sheet. Underpinning this thread is the fact that VCs say a lot of stuff - “this is interesting” or “we’re interested in this space” or pick-your-canned-statement. As a founder, words must align with action and don’t consider a round done or interest to be true until it is in writing.
How To Build a Professional Network, According to Someone Who Networks for a Living. “This might seem like a no-brainer, but this is where so many people get networking wrong. Get to know the person because you’re interested in them as a human being and want to know their story—not because it’s cool to say you know them.”
Who's Hiring? 👩💻
Senior Software Engineer at nextmv in Philadelphia, PA (remote ok).
WMS Implementation Manager at Stord in Atlanta, GA.
Salesforce Systems Admin at Steam Logistics in Chattanooga, TN.
💥 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.