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 đ
It was a big week for us at Dynamo Ventures as two of our Fund I companies, Vector AI and Stord announced meaningful follow-on raises to continue the scale-out of their respective businesses. Stord is of particular significance because it brought Dynamoâs unicorn count to 2 (along with sennder). While we appreciate the kudos, all credit to the teams at Vector and Stord who are relentless in serving their customers.
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Supply Chain đŚ
Record Shattered: 65 Container Ships Stuck Waiting Off California. The situation at the Port of Los Angeles seems to worsen day by day and, to no oneâs surprise, will only worsen as cargo volumes increase due to holiday spending. Terminal limitations are the primary cause of the major delays creating the bottleneck outside the port. While the number of ships at anchor or at berth have risen nearly five times more than pre-COVID levels, the number of daily ship berths has remained consistent around 27-31 vessels per day. In other supply chain congestion news, This Port Logjam Has Enough Containers to Cross Half the US and Drewry: Global Port Congestion Likely to Last Well Beyond Q1 '22: Drewry.
ââKroger, Instacart Aim for 30-Minute Grocery Delivery. Two years ago, Kroger began testing 30 minute delivery but ran into problems with scaling the service since it only had access to the grocery stores staffers. This partnership with Instacart allows Kroger to tap into the grocery delivery giant's pool of shoppers and savvy technology. COVID ignited grocery delivery sales and increased customerâs need for speedy service. In order to meet demand, Instcart will be prioritizing 30 minute deliveries before fulfilling less urgent orders. In other delivery news, Walmart Will Test a Self-Driving Delivery Service with Ford and Argo and Gopuff Piloting A Prescription-delivery Service Expansion.
A Perfect Storm for Container Shipping. During the pandemic global commerce has been exposing international logistics resilience, including the blockage of the Suez canal and a record number of idle vessels. The expense of these disruptions can be seen in the cost of freight from Shanghai to New York which is now hovering around $15K, although in 2019 the cost was only $2,500. This is matched with increasing cargo volume as the Asia to North America Route experienced a 27% increase from pre-pandemic levels. This is not the case everywhere though as northern Europe throughput is remaining at 1% lower, but still carries the high prices. Reliability and access to goods is leading some merchants to consider alternatives for getting their product such as nearshoring and cutting least popular items. In related news, White House Appoints 'Port Envoy' To Tackle Congestion, Bottlenecks & More Signs of Nearshoring in July Jeans Import Numbers.
Ryder to Build Logistics Network with Autonomous Trucking Company Embark. The partnership helps Embark launch a nationwide network of up to 100 transfer points while Ryder gains an entry point into the autonomous transportation industry after previously partnering with Waymo and TuSimple. Ryder will use all three existing partnerships to learn and grow through different use cases as well as develop a scalable transfer hub model. The supply chain and fleet management solutions provider is open to the possibility of operating an autonomous fleet one day, shared Karen Jones, Ryderâs EVP of New Product Innovation. Additionally, Embark, HP Introduce EV Drayage Within Autonomous Truck Operations & Walmart To Test Self-Driving Cars in Multiple Cities With Ford and Argo AI.
Secondary Services Suffer as Carriers Eye 'Container Gold Rush' to the US. Ocean carriers are pulling ships from lower paying lanes, specifically the Asia-Middle East and Asia-Red Sea lanes, in order to take advantage of high freight spot rates in Trans-Pacific lanes. In comparison, rates in Asia and the Middle East are about $4,000 per TEU as opposed to Trans-Pacific rates which come in around $20,000 per TEU. Consequently, no major carrier is now able to offer a weekly sailing for the MEA trade route. Also, The Worldâs Shippers Are Earning the Most Money Since 2008.
Lowe's Stocking Up On Inventory Early to Prevent Empty Shelves During Holidays. It seems as if Christmas comes earlier and earlier every year and this year is no different, according to Lowes CFO, David Denton. Holiday sales are predicted to rise 7% to 9% compared to last year even amongst the looming possibility of inventory shortages due to current supply chain complications. Ordering early may not avoid shortages altogether, especially as rises in COVID cases has led to many factory shutdowns. Denton is still remaining positive, sharing that inventory levels are âactually getting better, not worse.âÂ
Vaccine Mandate Adds Another Wrinkle to Warehouse, Distribution Hiring Crunch. The US Department of Laborâs Occupational Safety and Health Administration (OSHA) push for mandated vaccinations is expected to be issued within the next few weeks. The warehouse and distribution sectors are already dealing with labor shortages originated from high consumer demand which has created mixed reactions across supply chain businesses, many of which are currently operating with 50% temporary labor as they head into peak season (for reference, businesses typically favor temporary labor at 20% or less). According to OSHA, employees may opt out of the vaccinations for medical or religious reasons but will be required to undergo weekly tests. For more on labor shortages, Worker Shortage Adds to Supply Chain Snags, Caterpillar CEO Says and Truckload Carriers Warns of Vaccine Mandateâs âFar-Reaching Implicationsâ.
Rising Transportation And Supply Chain Costs Are Driving Industrial Real Estate Leasing Activity. Leasing volume for the US industrial market is on its way to beat 2020âs record of 713M ft². Total activity through July of this year is sitting right around 587M square feet which is 52% higher than the same time last year. CBRE, the industrial real estate firm responsible for sharing the data above, explained that as costs have risen, âoccupiers are keen on outsourcing distribution and warehousing servicesâ ultimately leading to the increase in leasing volume. In related news, SB Logistics Moves Toward Lights-Out Warehouse.
Mobility đ
Lucid Motors Beats Tesla in Range, Going 520 Miles on a Charge, the EPA. Says. Automaker and startup Lucid motors flagship vehicle the Air Dream will edge Teslaâs Model S long range by nearly 115 miles. Although it will cost you $169K before government subsidies and that is if you can get your hands on one as lucid motors has yet to deliver an Air Dream. The automaker is said to be working both on lower cost vehicles that will start around $77k as well as a sport utility vehicle. Lucid Motors was founded in 2007 and has already entered the public market raising close to $4.4B earlier this summer under the ticker âLCIDâ.
England Will Be the First Country to Require New Homes to Include EV Chargers. Legislation introduced in 2021 by the British government will require EV chargers to be featured on new homes and offices. Furthermore, these chargers will be designed to charge at off-peak hours in effort to balance demand for the utility with the growth of EVs. This is the first country to make an infrastructure requirement like this but follows suit after the UKâs proposal to ban all new fossil fuel vehicles by 2030. The charger requirement is set to begin in the beginning of 2022 and will pose new roadblocks for real estate developers. In other EV charging news, Plug-in EVs Get 28% Market Share In Germany In August & Chinaâs EV sector is poised for âinevitableâ consolidation, says Bain consultant.
GM Plans to Idle Factories Longer Amid Chip Shortage. Shortages of semiconductors has led to the slow down of production of vehicles throughout the year. Most recently this shortage will force GM to schedule idile time for up to seven plants across North America. Impacts like this have contributed to the 14% decrease in vehicle sales in comparison from last year. GM is additionally facing shortages of batteries for their Chevy Bolt Model as defects from manufacturing are additionally delaying production to mid October and November. In other Auto-Industry news, Troubled auto industry sends car care business booming & Major Automakers Fear the Global Chip Shortage Could Persist For Some Time.
Tesla Will Make Sure You Are a Good Driver Before Giving You Access To Full Self-Driving Beta. Just a week ago, Tesla began promoting their new fully self-driving beta update to a specified early access fleet that consists of employees and select customers. The new features are added over the air through updating software and is expected that a wider release will occur September 24th. The release will be available to those with permission or those where âdriving behavior is good for seven days,â according to Elon Musk. The update is still considered level two driver assist as it still requires drivers presence and can navigate highways and city streets. In related news, Driverless Carsâ Need for Data Is Sparking a New Space Race.Â
Ford Adds Jobs To Increase Production Of Electric F-150 Pickup; Reservations Top 150,000. The Detroit automaker plans to invest $250M and add 450 jobs across three Michigan facilities which will bring production capacity to 80,000 units. In total, Ford has spent $950M in production of its electric F-150 and its hybrid counterpart. The electric F-150 has received 150,000 reservations, the automaker still hasnât generated the same amount of buzz that the Tesla Cybertruck has which is rumored to have over 1 million reservations. As EV production increases, itâll be interesting to watch how it affects correlation with jobs. In similar news, Biden Wants An Aggressive Transition To EVs but A Surprising Ally Is Pumping The Brakes and Renault Plans 2,000 Job Cuts In France As It Moves To Electric Cars.
Bus Driver Shortage Complicates Student Transportation as Schools Reopen. As many parents and students have mixed feelings about returning to school with the pandemic still looming, transportation poses another roadblock. Many former school bus drivers have retired during the pandemic and others not wanting to return to a work environment surrounded by unvaccinated children. A New York City School Bus Coalition spokesperson shared, âthe nation is experiencing a severe driver shortage as the pandemic continues and New York is no exception.â and âWeâre short about 200 workers.â Under the current system bus drivers must have a commercial drivers license which can take months to get, leaving potential for a year long struggle. In related news, Massachusetts Brings In National Guard to Drive Kids to School.
Used-Vehicle Prices In US Rise Again In First Half Of Sept. After Summer Peak. The Manheim US Used Vehicle Value Index, which measures pricing trends, increased 3.6% in the first half of September compared to a month earlier. The index is currently up 24.6% YoY. Dealers are stocking up inventory amidst announcements from numerous automakers, including GM, indicating that they were halting production of newer vehicles. The boom in used car prices coupled with a rebounding economy are two of the major players affecting the increase in inflation. In related news, Hurricanes Further Squeezing Auto Supply And DemandâBeware Of Flood-Damaged Used Cars Adding Insult To Injury.
Fundraises and M&A đ¸
Vector AI Raises $15M Led by Bessemer Venture Partners. Dynamo portco, Vector AI provides a solution to digitize complex papers and documents to be included into trade, finance and supply chain workflows. Vector AI targets global banks, multinational freight forwarders and medium forwarders through not requiring multi-stakeholder buy-in. Their advancements in workflow automation come at a time where labor is scarce and costly making their solution attractive to those who cannot afford to continue to waste time on base line processes.Â
Stord Raises $90M Led by Kleiner Perkins. The Atlanta-based startup who has developed a cloud supply chain allows for large and mid sized shippers to access and scale their distribution. They provide flexibility by allowing lease structures and distribution to change with their customers needs. Along with the newly raised funding Stord additionally announced the acquisition of Fulfillment Works with warehouses in Connecticut and Nevada. Furthermore, this marks the 2nd unicorn in Dynamo Venturesâ Fund I.
Sharelock Raises âŹ4M Led by Breega & Banque Des Territoires. This Paris-based startup believes that they can increase bicycle commuting through providing smart bike racks. Their product will allow individuals to reserve a bike rack, provide security measures with alerts of potential theft or vandalism, while collecting data on user habits. This data will be leveraged to develop other products such as route optimization and sell to cities or insurers.Â
BridgeLinx Raises $10M Led by 20 VC, Buckleyâs Ventures & Indus Valley Capital. Founded only 9 months ago, this Lahore-based startup is building a digital freight marketplace that connects manufacturers, cement factories, textile makers to surface transportation forwarders. The team also hopes to provide features such as document validation, sound operational procedures and compliance while forwarding goods. The capital will be used to expand the team, take on new customers and broaden their systems.Â
Chaldal Raises $10M Led by Taavet Hinrikus. Founded in 2013 and one of the first users of âdarkâ stores, Chaldal looks to expand into 15 new cities. The team recognized that many small retailers did not have the goods that were ordered that led them to developing their own network of warehouses. Currently Chaldal operates 27 warehouses in four cities and claims to be the largest eCommerce grocer in Bangladesh.
Ambi Robotics Raises $28M Led by Tiger Global. Formerly known as Ambidextrous, the Emeryville, CA-based startup is building autonomous supply chain hardware for fulfillment centers. Ambiâs products, AmbiSort and AmbiKit, both of which are a multi-robot system that can be adapted to different processes or products to scan, pick, insert and package goods. Ambi will look to expand the team throughout the year and take on customers that have been waiting in their pipeline with the newly raised funds. Â
Locus Robotics Raises $50M Led by Tiger Global. Just seven months after raising a $150M Series E round, Locus raises another round to expand global operations. The Massachusetts-based company provides leasing of their more than 4,000 robots, across 80 different sites of which 20% are located in Europe. Their business model allows for flexible automation for their customers while not requiring the heavy implementation costs associated with building a permanent system.
GrubMarket Raises $120M From a Pool of Backers. While many final mile solutions for food exist, GrubMarket is connecting food suppliers further upstream in the food value chain. Their operation connects wholesalers, distributors, supermarkets, and consumers to one another. The key for GrubMarket is consolidating the food supply through software to provide any type of customer with the goods they need. Looking forward GrubMarket is intending to file papers to go public via IPO by summer of 2022.Â
Sendcloud Raises $177M Led by SoftBank. The Dutch startup has built a system that helps retailers assess their options for logistics. SendCloudâs CEO and co-founder has shared that they have been growing 70-80% YoY and during the beginning of COVID-19 lockdowns they saw parcel volumes spike 120%. Sendcloud can integrate with existing marketplaces such as Shopify and has carrier services from more than 35 logistics providers. Prior to this round Sendcloud had only raised $23M to date.Â
DeepRoute.ai Raises $300M Led by Alibaba. Based out of Shenzhen, DeepRoute.ai operates a fleet of autonomous taxis but has been said to be developing technology for logistics services as well. DeepRoute.ai will additionally sell their autonomous driving technology to automakers for an initial and recurring fee. This is the third vehicle and second autonomous vehicle company that Alibaba has backed in recent years showing their desire to be a leader in the transportation sector. Â
Getir Raises Over $1B This Year. The Turkish grocery delivery company has raised over $1.1B this year after closing an additional $150M from an existing investor. The startup is valued at close to $7.5B and has begun to expand via acquisition. Getir has recently acquired both BLOK a delivery app and Moov a Turkish car sharing platform. Additionally, Getir will begin operating in both Madrid and Barcelona this month.Â
Glovo Acquires Lola Market and MercadĂŁo For an Undisclosed Amount. Glovo, the on demand food delivery startup operates a series of âdarkâ stores and is again making acquisitions to accelerate geographical expansion. The addition of Lola Markets and MercadĂŁo will operate independently and follows the $208M acquisition of delivery service Hero brands. Going forward Glovo will look to continue its expansion with eyes set on North Africa in the next 12 months.Â
Maersk Acquires HUUB For an Undisclosed Amount. This Portuguese startup provides fulfillment services and inventory management for the fashion industry. HUUB currently provides services to 100 fashion brands and sees Maersk as the perfect partner to allow them to scale and reach new keystone customers. Maersk had already held ownership of HUUB through the issuance of $3M through equity and convertible debt, and sees HUUBâs services as a way to elevate their own service offerings. Â
SPAC Radar đĄ
Gogoro To Go Public Via $2.35B SPAC Led by Princeville Capital. Founded roughly 10 years ago, Gogoro is known for both their electric scooters and their swappable electric battery network. Operating primarily in China, Taiwan and India the young company shared that they had reached $1B in revenue during the 5th year into the venture and boasts over 400,000 subscribers to their battery swapping network. The deal is set to close during the first quarter of 2022 and is expected to generate $550M in proceeds with a $250M PIPE.Â
Company Building đ ď¸
Hiring Your First CRO. An important but tricky hire for enterprise orgs that are scaling. In particular, the parts on process and skills requirements might be valuable.
Habit Making Product Insights. âWhat emotional payoff does your product have? You may have to actually sit in a focus group and watch the body language of someone to really understand this. But itâs often just in their minds, in their heads. So, the downstream metrics that capture that are a little too late in the game, or we donât connect them back upstream to a userâs state of mind. I think Jobs had an intuitive sense for this. It helps if youâre a Founder to try and be that user yourself, to be able to feel, moment to moment, how your own product is making you react.â
Building B2B Products and B2B Customer Discovery. âTip 3: People mention a lot of challenges. Not all of them are relevant. Most of them can be solved by very simple workaroundsâ
Who's Hiring? đŠâđť
ML Engineer at Milk Moovement in St. Johnâs, Halifax (remote ok).
Sales Trainer at Stord in Atlanta, GA (remote ok).
Senior Backend Engineer at Vector AI in London, UK (remote ok).
đĽ Have you seen any interesting startups recently? Introduce us.
â¤ď¸ We would love your support. Please forward to friends and share on social media.
đď¸ If you were forwarded this and found it interesting, please sign up.
đ Check out Dynamo's podcast series, The Future of Supply Chain.