Dynamo Dispatch (08/05/19)

Issue 72 | Odyn, Attabotics, Recogni

Dynamo Dispatch. Weekly update from Dynamo 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 💭

Quite an interesting week in the world of supply chain as Trump surprised us with an additional 10% tariff on Chinese imports as trade talks stall. There are signs that freight markets might be rebounding while economic indicators continue to imply that the economy is chugging along with the tailwind of a 25 bp drop in interest rates.

As seed investors, while we are mindful of regulation and related headwinds (and tailwinds), we are equally investing for the long-term. We believe in cycles such as this where with heightened friction in the system provide a great opportunity to launch the next stalwart in the industry. Related to cross border trade, we’re interested in: highly differentiated tracking solutions, demand forecasting solutions, network planning and optimization, among other things. We would love to chat (hello [at] dynamo [dot] vc) with founders who might be seeing this as an opportune time to build a big business.

Have a great week!

We Are Dynamo,
Santosh 💥

PS - Only 10 days left to apply to Founders Camp 2019!

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

Supply Chain 📦

🌟Autonomous Trains Are Ready But Will We Accept Them?. While autonomous trains are expected to go mainstream over the next five years, major challenges to uptake include: 1) unions; 2) allay fears around safety; 3) regulators. Not dissimilar to AVs, there is a varying sentiment among shippers to use autonomous trains with most unwilling to use them (49% of shippers surveyed). Also, CN’s CEO on Technology in Rail Operations.

Shopify to Invest $1B in Fulfillment Network. On it’s latest earnings call, Shopify shared that interest in its fulfillment offering was stronger than expected from customers and 3PL partners. While it’s unclear how the $1B will be allocated, it’s fair to assume a hefty chunk will be used to double down on Shopify’s strengths and scale in machine learning, demand forecasting, and smart inventory allocation.

DB Schenker Launches Connect 4.0 Platform in the US. “Customers will be able to get instant online quotes for ocean or air freight, book transportation and track their shipment from pickup to delivery, which are features that build on the company's previous online portal, eSchenker.​ The previous portal asked customers to fill out a form for a quote, promising a response within three business days.”

Schneider National Backs Off Last Mile. After two acquisitions over the last three years, Schneider is backing off last mile deliveries of oversized goods as unit economics prove difficult to manage. The basic economics in last mile are driven by: volume; size and type of freight; batching; pick up/drop off density; mode alignment; routes; delivery timing. Schneider’s focus was in bulky goods (couches, chairs, refrigerators, etc) that are particularly difficult to manage if volumes are inconsistent and pick up/drop off density is low.

Forwarders Mitigating Air Freight Volatility with Forward Contracts. Freight Investor Services (FIS) launched an Air Freight Forward Agreement (AFFA) market last month, and has seen several industry players use futures to hedge their forward exposure to price movements, using the TAC Index as the base. An AFFA is a cash-settled derivative contract with no physical delivery. It is used to hedge against adverse price movements and is taken out inversely to physical positions, or on a speculative basis to cover spot requirements.  

Takeoff Technologies & Wakefern Launch Automated Microfulfillment DC. The New Jersey-based micro-DC helps power ShopRite online order and pick up grocery services. The effort should help increase the speed and lower the cost of fulfilling online grocery orders.

Mobility 🚗

Meet the World’s Largest Plug-In Hybrid Ship. Color Line in Norway took delivery of a 160 meter-long ship with a capacity of 2,000 passengers and around 500 cars. The ship has a 5 Mwh battery (the equivalent of 50 Tesla Model S vehicles) and also reuses the heat from the cooling water and exhaust.

🌟The Road to AV Safety Has Potholes. According to experts, we’re still missing: 1) metrics for testing; 2) adopting “safety by design” AV development; 3) sharing, among AV developers, of data collected during testing; 3) building a feedback loop; and 5) more sophisticated system-level simulations.

Helicopter Service is Booming in NYC. Helicopter service in the region is up anywhere from 21 to 84% in the last year as high-income earners resort to helicopters as highways to airports and local destinations remain congested in America’s most populated city. That said, noise pollution is still an issue that’s yet to be dealt with. Related, Mobility Gaps in the Post-Ride-Hailing Era.

Electrify America and Stable Partner on Robotic EV Chargers. Stable will manage the overall project and pair its robotic technology and advanced scheduling software located at its facility with Electrify America's chargers. The dedicated fleet-charging facility will allow self-driving EV fleets to charge with no operators present: vehicles can park themselves anywhere inside a standard parking space, and Stable's robot will automate the connection between the vehicle and the charger. Related, VW Partners with Charging Software Company, Elli.

Consumer Confidence Low for AVs and EVs. Confidence in AVs clocked in at 34 while EV confidence came in at 55 (sentiment is segmented into three categories: low (0-40), neutral (41-60) and positive (61-100)). On AVs, it’s interesting that 66% of respondents had little to no knowledge on the matter whereby 71% stated they would be likely to buy or lease an AV if they understood it better. I can’t help but to think that the general sentiment is overly negative in regards to AVs…

📊Breathing New Life Into Used EV Batteries. While Li-Ion batteries have 10 year life spans, even after a decade, they can be reused  in markets that need stationary energy storage requiring less frequent cycling ($30B market by 2030) or recycled entirely to make new batteries. 

Fundraises, M&A, Talent 💸

Turvo Acquires Odyn. Dynamo portfolio company, Odyn was acquired by Turvo this week to enhance Turvo platform capabilities, enabling optimization of orders, shipments and inventory. Marc and Konstantin will lead Turvo’s new advanced technology center in Boston, MA focused on IoT, AI and data science.

Udaan Raises $500M Round at $2.2B. The B2B marketplace for Indian SMEs is in talks with Lightspeed Ventures and DST Global on the round.

Attabotics Raises $25M. The round was led by Coatue with participation from Honeywell, Comcast Ventures, and early investors, Forerunner Ventures and Werklund Growth Fund.

Recogni Raises $25M Series A for Low Power AI Processing for AVs. Great Point Ventures led the round with Toyota and BMW. 

Drip Capital Raises $25M Series B. The Accel-led round will be used to expand trade finance operations, offerings, and market reach.

OrderMark Raises $18M Led by Foundry Group. The restaurant online order and delivery management platform was founded by the “scion of the famous Canter’s Deli.”

Caviar Acquired by DoorDash for $410M. Square was finally able to offload Caviar for 4.5x what it purchased it for back in 2014. The deal can certainly add volume in core markets (theoretically helping unit economics) while bringing some new markets to the DoorDash platform with some critical mass in deliveries.

Ford acquires Quantum Signal. “while others might’ve been sleeping on Quantum Signal and the work it's done, it has been following the company closely, and will employ its experience in developing real-time simulation and algorithms related to autonomous vehicle control systems to help build out Ford’s self-driving vehicles, transportation-as-a-service platform, and both hardware and software related to both.”

Company Building 🛠️

Managing Technical Teams. Camille Fournier, a Managing Director at Two Sigma and the former CTO of Rent The Runway discusses everything from hiring, the first 90 day as a manager, 1 on 1s, to remote work and staying sharp as an engineering leader.

No BS Guide to Stock Options. Standardizing compensation and getting a philosophy in place is generally something boards discuss at a Series A (post product/market fit). Skillshare shares their guide to determining the size of grants as well as tools to help potential and current employees evaluate their option value.

Streamlining M&A with the Atlassian Open Term Sheet. “The Atlassian Term Sheet is more favorable to selling companies than any we’ve seen among strategic acquirers in technology. It’s guided by our research and includes explanations to make our approach more understandable. We’ve done this because we want to be fair to our future team members and we don’t want to spend energy and goodwill on things that almost never matter. And we believe that by being fair and transparent, we can make the M&A process more efficient, human, and aligned with why we acquire companies (and the incredible founders and teams behind them) in the first place.”

Who's Hiring? 👩‍💻

Financial Analyst at Gatik AI in Palo Alto, CA.
BDR at WorkHound in Chattanooga, TN.
Trucking Operations at Starsky Robotics in Dallas, TX.

Check out other jobs at Dynamo portfolio companies.

❤️ We would love your support. Please forward to friends or share on Twitter or LinkedIn.
Apply to Founders Camp 2019.
🗞️ If you were forwarded this and found it interesting or helpful, please sign up.
🎙 Check out Dynamo's podcast series, The Future of Supply Chain.