Dynamo Dispatch (07/27/20)

Issue 115 | Mastery, Smarthop, Cowboy

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 might be entering the dog days of summer but that doesn’t mean we’re slowing down. We appreciate any and all referrals to brilliant Founders looking to build the next industry-defining businesses in supply chain or mobility. Stay safe!

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 📦

🎥Brad Jacobs of XPO Discusses Diversity, Automation, and Recovery from COVID-19. In a 50-minute live Q&A, CEO and Chairman Brad Jacobs addressed some of the pertinent issues plaguing our nation and supply chain as a whole. He mentioned XPO plans to hire a chief diversity officer to “increase the pipeline of diverse candidates” along with increasing “the mentoring and promotion of the careers of all our employees [including Hispanic and Black employees].” Jacobs also touched on the likelihood of M&A, noting there is opportunity “particularly in the pandemic era”. XPO has made 17 acquisitions under Jacobs and is the seventh-best performing stock in the Fortune 500 over the last decade. Also from XPO, the COVID-19 Survey.

Walmart Canada Spends $2.6B to Upgrade Omnichannel Operations.  Walmart Canada will undergo an immersive 5-year revitalization to expedite, improve and reshape in-store shopping experiences. As a result of the investment, “Walmart pickup” will be available to 70% of its Canadian stores by year's end.  In addition to optimizing hybrid micro-fulfillment centers and building two new distribution centers, the plan will include using a state of the art WMS software, IOT devices for 2k trucks and blockchain payment solutions. In the US, Walmart Plans $220M DC in Charleston, SC.

Advanced Manufacturing Adoption Depends on Democratization. Post crisis years typically see elevated change surrounding industrial automation technologies. With the pandemic being a catalyst for change, manufacturers are forced to rethink their gameplans. Author Etienne Lacroix believes innovation starts with: launching the plug and play automation era, re-skilling the factory workforce, and creating the missing layer of advanced manufacturing. Related, the Push to Automate Warehouses Gains Steam. 

🌟Schneider Invests in a Jeff Silver’s Mastery Logistics. Mastery’s cloud-based TMS MasterMind which sets out to streamline decision making, improve resource allocation, and increase visibility has already begun integration with Schneider’s Quest platform. Mastery’s TMS equips asset-light brokers with tools for workflow automation and shippers with tools to understand their supply chains in regard to carrier capacity.  Also, understand how rate transparency helps all involved parties. 

eCommerce Booms May Elevate Demand for More Warehouse Space. By 2025, U.S eComm sales are expected to make up 18.1% of all retail sales and with many brick and mortar stores closing, that figure could surpass economic projections. JLL predicts an additional 1B ft2 of warehouse space might be needed to satisfy demand. With ⅓ of malls expected to vanish by 2021, converting dead malls could serve to meet interim demand. Related, Retail-Industrial Property Conversions Accelerate. 

Fiat Chrysler and Waymo Team Up for Commercial Self-Driving Vehicles. The duo will develop autonomous cargo vans and light commercial vehicles primarily targeting last mile delivery providers. L4 automation is expected to be implemented across the entire fleet of vehicles, meaning technology will entirely control the AV’s, only requiring human intervention in atypical driving conditions. Full development of AV’s is a capital intensive investment causing automakers to strike partnership in order to reduce costs. In Ireland, UPS Ditches Delivery Vans in Search of More Sustainable Alternatives.

Air Freight Rates Rise As Passenger Flights Exit Market. Falling capacity of Passenger freighters, weak passenger demand, and rising PPE requirements have sent air freight rates rising. Medium term predictions show demand and capacity of freighters are likely to rise. Meanwhile, Scrubber Fittings Plummet in the Face of Low Fuel Prices. 

Mobility 🚗

🌟📊MIT Report on AVs. Citing regulation, profitability, general safety, and high labor costs, MIT predicts full scale implementation of AVs still remains a decade away. The report takes a stance claiming “Unlike ride-sharing, there’s a real and present need for autonomy in trucking” and says driverless trucks can save $70B annually while boosting productivity 30%.  Speaking of AVs, Beep and “Local Motors” Team Up to Deploy 3D Printed AV Shuttles.

Expect Rivian Pickup Truck Delivery in June 2021. In conjunction with producing its coveted R1T and RS1 pickup trucks, the Michigan based manufacturer is also making 100k delivery vans for Amazon that will be in use by 2022. Numerous supply chain disruptions forced Rivian to temporarily halt production, and yet they remain on track for the 2021 release. 

Soundcloud Co-Founders Launch eBike Subscription Service in Berlin. eBike and eScooter subscription services are on the rise across Europe. For €59/mo, users of the Dance app gain access to an e-bike with guaranteed theft protection and maintenance services. Competitors price their e-bikes around €1,700, allowing Dance to pursue a market segment seeking a monthly subscription vs. an outright purchase. Elsewhere, Razor Introduces an Adult e-scooter Lineup. 

GM CEO Expects Full Economic Recovery by Early 2021. Despite GM’s sales being down 34% y/y in Q2, CEO Mary Barra still maintains a positive economic outlook. She stated, “The new outbreaks do pose potential setbacks, but we’re hopeful that the U.S. economy will be back to 90% of pre-pandemic levels early next year,”. Barra says GM has implemented top notch safety measures to mitigate cases and keep the company on track for Q3 and Q4 goals. Ford and Mobileye announce collaboration for collision avoidance system

VW’s EV Plans for Chattanooga Press Forward. Construction of the $800M production site nears 70% completion as factory equipment has begun arriving for installation. The German automaker will bring around 1k new jobs with the production of more environmentally friendly EV’s in TN. For now, the site will be assembling battery packs and will develop the capability to produce more than 100k EV’s annually once fully completed. Speaking of German Automakers, BMW’s X5 Will Get a Hydrogen Fuel-Cell Version in 2022. 

Wall Street Inserts Itself into the EV Equation. The SPAC or Special Purpose Acquisition Company has been around since the 1990’s and resurges as the preferred method for EV startups to go public. After witnessing companies like Draftkings and Virgin Galactic achieve initial success after IPO, Wall Street has identified a similar opportunity for EV startups, like Nikola (ticker: NKLA) who saw shares surge after its merger with VectorIQ and IPO as a SPAC. As Rivian, Lucid Motors, and Faraday Future scale up go to market production, it leaves us to question which method these promising startups will choose to IPO. 

Fundraises, M&A, Talent 💸

Swoop Raises $3.2M Seed Round Led by Signia Venture Partners. Swoop helps local medium-to-large sized transportation companies find customers. Funding will help Swoop grow its software offering for local transport providers. 

Smarthop Secures a $4.5M Seed Round Led by Equal Ventures. Smarthop enables customers to plan, search, and book loads from small trucking businesses. Funds will be used to further build out its engineering and marketing teams. 

Afresh Lands $12M For Series A Led by Innovation Endeavors. Afresh provides grocers with demand forecasting using AI and ML. With the new funding, Afresh will accelerate its expansion of company technology to more retail partners. 

Shelf Engine Raises a $12M Series A Led by GGV Capital. Seattle-based Shelf Engine provides grocery stores with demand forecasting for perishable food items. The new funding will be used to scale up the engineering team and its sales and acquisition process.

Sea Machines Pulls in a $15M Series B Investment Led by Accomplice. Sea Machines is an autonomous vessel software and systems provider based in Boston, MA. Funding will be used to accelerate the deployment of its unmanned naval boat. 

Cowboy Raises $26M Led By Exor Seeds. Cowboy designs and manufactures eBikes for personal ownership. It plans to expand headcount and it’s network with the new funds.

Xpeng Raises a $500M Series C Led by Aspex Management. Xpeng is a Chinese automaker developing electric vehicles. The new capital will be used to continue the development of its EV’s for the Chinese Middle Class. 

Mercado Raises $2.5M in Venture Funding Led by Ironspring Ventures. Mercado connects global supply with global demand to drive efficiency by focusing on the first mile. The fresh capital will help expand operations and its business reach. 

FreightWaves Raises $37M in Growth Funding Led by Kayne Partners.FreightWaves is a leading provider of trucking news, data, and analytics. Funding will be used for growth initiatives, including product development and potential strategic acquisitions. 

Gett Raises $100M in Additional Funding. The London and Israel based startup provides private car rides on demand. Investors of the round were not disclosed, but Gett noted some previous investors did participate in the round. 

Company Building 🛠️

🎥BC Marketing Summit 2020: B2B SaaS Branding. A presentation on the importance of branding in enterprise SaaS and how to leverage and reinforce brand in broader marketing efforts.

Traction Creates Opportunities. “As traction creates opportunity, it also creates greater complexity and can be a strain on cash flow. Founders should be humble when they have stumbled upon a business that has extraordinary traction, because while the most important thing may be in place, there are now many more things that could possibly go wrong. But that’s exactly the kind of problem you want to have as a founder.  It’s also the kind of environment you’d want to be in as a team member, because as traction creates opportunity for the company, that also means opportunity for you.”

Regulating Technology. Ben Evans dives into the regulatory deluge that technology companies are about to have to navigate. As “software has eaten the world” we’re seeing governments step up their oversight of key sectors or functions ala GDPR.

Who's Hiring? 👩‍💻

Integration Specialist at Stord in Atlanta, GA.

VP Sales at Skupos in Denver, CO.

Sales Manager at Zeelo in Italy (flexible on city).

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.