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 š
Over the weekend, this Twitter thread from Santosh has been getting passed around. Are we headed for a supply-driven recession in 2022? Ongoing supply chain turmoil might suggest so!
We Are Dynamo,
Santosh, Jon, Barry, Ted, Katie, Clay, Skyler, and Lukas
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Supply Chain š¦
Maersk Is Now Heading for Biggest Profit in Danish History. With ports overflowing and container prices seeing all time highs it is not a surprise that shipping giants such as Maersk could book an extremely profitable year. Although, being on track to generate profit in 2021 that is equivalent to their previous last nine years of operating combined is unprecedented. Net income for Maersk is expected to be roughly $16.2B and has been acknowledged by many in the industry that it will be a long time before this record is broken. In other maritime shipping news, Bill Would Change Maritime Liability Rules After Boat Fire & āHelp Decarbonize Shipping Industry,ā Getting to Zero Coalition Demands.Ā
Americans Have No Idea What the Supply Chain Really Is.Ā While Americans are finally seeing lives look somewhat normal again, one thing is certain: consumers are experiencing high prices and delayed shipments due to the supply chain chaos originally created by COVID.. This is causing millions of Americans to finally pay attention to the importance of the invisible hand behind in-store or online purchases. In related news, Supply-Chain Contracts Get Revamped After COVID-19 Disruptions. Americans HaveĀ
Just How Many Containers of Cargo Are Stuck Off Californiaās Coast? Currently there are roughly 70 container ships waiting for their turn to dock and unload outside the Port of Long Beach. This amount is equivalent to the amount of container ships that Charleston processes a quarter. If importers quit adding additional ships it would take over 14 days to clear the line of ships, although that is extremely unlikely to happen. On Tuesday the Port of Los Angeles stated that their average waiting period for berthing is 9 days.
Nikeās Revenue Pinched by Supply-Chain Disruptions. With over a third of the sneaker giantās goods being manufactured in Vietnam, it leaves them stranded in production and inventory. Vietnamās local authorities have just announced that Covid-19 lockdowns have been extended to October 1st, leaving multinationals blind on when their goods will be produced and shipped. On a positive note Nikeās direct to consumer sales are up 28% from earlier this year, leaving the question of how much inventory will be left come peak holiday season. Related, Supply Chain Issues Leading to Shipping Delays, Massive Increase In Costs Ahead of Holidays.Ā
Ten Days to Save Christmas: Retailers Warn of Lorry Driver Shortage Disruption. As we leave summer behind, retailers look past autumn into the holiday season and already are preparing consumers for shortages as driver shortages are prevalent throughout the UK. The British Retail Consortium has stated that the lack of drivers has left the country in a state without the āglueā that kept their supply chains for foods and goods together. The situation is so dire that if a solution is not found in 10 days that disruptions during the holiday season could be disastrous. From grocerās surveys 60% of shoppers noticed a decrease in variety of food and goods to buy underlining the early breeze of these tailwinds. In other related news, BP Close Some UK Service Stations as Driver Shortage Hits Fuel Supplies but Petrol Will Continue To Flow, Says Transport Secretary.
Automation To Deliver Spot Truckload Savings: CH Robinson. The largest 3PL and freight brokerage is trying to take advantage of new technology that helps reduce the costs for beneficial cargo holders. The new software that enables system to system automation of spot trucking transactions to help by reducingĀ any unnecessary lane bidĀ negotiations. The tight capacity andĀ rising demand for goods has forced evenĀ the largest forwarders and service providers to reconsider their digital platforms and route optimization. In other news,Ā
Inside Amazonās Flagship Fulfillment Center, the Machines Run the Show. BF14, Amazonās flagship center located in Kent, WA, is capable of processing more than 1M items a day. It consists of a productivity-tracking system that monitors both human workers and robots as they fulfill orders and manage inventory. While the fulfillment center is an impressive feat, Amazon is increasingly being associated with unrealistic quotas and harsh working environments. Nevertheless, Amazon is setting the standard for the logistics industry with competitors like Walmart and Kroger racing to automate warehouse operations. Speaking of Amazon and safety, A New Law In California Aims To Protect Workers At Retail Warehouses Like Amazon's and a New California Law Imposes Strict Quota on Warehouse Distribution Centers.
Mobility š
Cost of Chip Shortage Totals $210B ā 2x Early Estimates. AlixPartners originally estimated the shortage would cost approximately $110B and 3.9M units in lost production. The consulting firm attributes the increased estimates to a rise in COVID cases in Malaysia. The chip crisis is also exacerbated because of the numerous other shortages affecting other industries across the globe. In other chip shortage news, Stacy Rasgon on How the Global Chip Crisis May Be Getting Even Worse and GM Works With Hertz to Get Dealers More Loaners Amid Chip Shortage.
Electric Air Taxis to Make Their Debut In Brazilās Most Congested City. SĆ£o Paulo is about to look very different in the coming future. Gol, the Brazilian budget airline, has received the go-ahead to launch the first zero-emission air taxi service in the city. These eTOLs (electric vertical takeoff and landing), built by Avolon, are set to be completed by the beginning of 2025 and would cost commuters about one dollar for every 25 miles traveled. According to Avolonās chief commercial officer, Paul Geaney, Asia is the next stop on the travel itinerary. In other public transit news, London Mayor Commits to All-Electric Buses Moving Forward, 100% Zero Emissions By 2034.
GM Says Chevrolet Bolt EV Battery Production Resumes. The recall of the Bolt affected nearly 140,000 vehicles and has cost GM nearly $1.8B. The automaker is seeking reimbursement from battery supplier LG due to manufacturing defects. GM is also launching a new diagnostic software package meant to detect specific abnormalities that could indicate damage in order to avoid additional costly errors. On the topic of regulators, Tesla Presses US To Boost Vehicle Fuel Economy Requirements while NHTSA to Investigate 30 Million More Cars Equipped With Takata Airbags.
White House Pushes Companies to Be Transparent On Chips Supplies. Commerce Secretary Gina Raimondo did not sugarcoat the need for chip suppliers and buyers to provide transparency on the state of the strained supply. She warned that if companies donāt provide the requested information on chips, that the government may have to āuse other tools in [the US governmentās] toolbox that require them to give us data.ā This was the third time the White House met with industry-leading officials who are doing all they can to help the administrationās effort. The situation may turn even more dire as the Delta variant spreads rapidly in Southeast Asia causing many semiconductor factories to shut down.Ā
Climate and COVID Cast Shadow Over Jet Demand Outlook. Boeing has predicted that by 2024, once the airline industry recovers from the pandemic, annual demand growth would āresume a long term trend of 4%-5%.ā However, many aerospace executives and representatives are less bullish on a quick recovery, citing that the pandemic has paused nearly 5 years of growth and could even sustain longer-term damage due to an uptick in environmental pressures. Other delegates are questioning whether the values of popular jetliners will remain intact under the assumption that airlines are beginning to demand more sustainable aircraft in order to stay ahead of industry regulations. In related news, As America Reopens, Airlines Hunger to Reclaim Transatlantic Cash as Biden Administration Lifts Travel Ban for Fully Vaccinated International Travelers.
Electrifying The Bottom Line. McKinsey released a report that investigates why low profitability remains slightly above breakeven as EVs gain traction and how OEMs are beginning to re-evaluate the traditional business model to increase these margins. To read the full report, check out Electrifying the Bottom Line: How OEMs Can Boost EV Profitability.
Lack of Inventory Starting to Drive Some Out of the New Car Market. The average price of new vehicles has set another record after beating the $42,000 price from July of this year. Higher prices, coupled with extended delivery delays, are slowing down consumer buying behaviors. According to research conducted by Kelly Blue Book, 48% of potential buyers are electing to wait on purchasing new vehicles for up to seven months or longer. Vanessa Ton, senior industry intelligence manager at Kelley Blue Book, even projected that OEMs may soon start experimenting with made-to-order deliveries. In similar news, Average Used Car Price Sets Another Record and Better Get Used to High Vehicle Prices ā Even On Minivans.
Fundraises and M&A šø
FruitScout Raises $4M Seed Round Led By Bowery Capital. FruitScout is the first mobile-based, AI-powered precision load management (PCLM) platform and combines computer vision with phone-based data to enable farmers to make smarter decisions about crops. This marks the first agtech investment for Bowery Capital who led the seed round. Fruitscoutās main customers are currently apple growers but are hoping to reach other produce lines using the funds raised.
Cartona Gets $4.5M Pre-Series A to Connect Retailers With Suppliers in Egypt. Dubai-based VC firm Global Ventures led the round and partnered with Pan-African firm Kepple Africa, T5 Capital, and angel investors. Cartona was founded in 2020 and specializes in solving supply chain challenges for customers in the fast-moving consumer goods industry. The Cairo-based startup will invest the capital into improving technology and expanding the team.
Just Raises $8M In Its Effort to Beat Root At the Car Insurance Game. The round was co-led by CrossCut Ventures, ManchesterStory and Western Technology Investments. The $8M raised will increase the startupās raise total to $15.3M since the beginning of 2019. Just offers personalized auto insurance that changes based on driver behavior and is looking to vamp up hiring and its product offering. Root Insurance, another competitor in the space who shares similarities with Just, raised $350M in Series E funding back in 2019.
Last-Mile Logistics Platform Cargamos Raises $11M Seed Round to Expand Same-Day Delivery. The Mexico City-based startup has its eyes set on becoming the king of same-day delivery in LAtin America. Investors in the round include Kavak CEO Carlos Garcia Ottati and JĆ¼sto CEO Ricardo Weder as well as Nzaca, FEMSa, and Kayyak Ventures. The $11M will be used to build out a distributed warehouse network so regional retailers can compete with large retailers like Amazon.Ā
AI-Powered Supply Chain Visibility Platform Altana Nabs $15M. The Series A round led by GV brings the startups raise total to $22M. Altana will devote the funds to product development and launching its new machine learning tools. Altana was founded in late 2018 by Evan Smith, Raphael Tehranian, and Peter Swartz who previously worked at Panjiva, a global trade data company.Ā
3Gtms Secures $15M Financing Round. 3G is the only TMS provider with one platform that combines brokerage, dynamic managed transportation, and multi-carrier parcel shipping. The startup will use the funds to expand its technology to ābetter serve its growing client baseā according to its CEO Paul Brady. Sumeru Equity Partners led the round which included Hercules Capital and existing investors.Ā
Hayden AI Raises $20M in Series A Funding. Hayden AI provides an autonomous traffic management platform by compiling data from IoT sensors to create a digital twin of the city's main roads to simulate scenarios that enhance traffic, curbside, and parking management. TYH Ventures led the round and was accompanied by BootstrapLabs, Autotech Ventures, and Modern Venture Partners. Hayden will use the money raised to expand reach both nationwide and internationally.
Advanced Farm Technologies Completes $25M Series B Funding Round. The California-based startup deploys autonomous strawberry picking robots that sense and pick ripe fruit with gentle gripper technology. The round was led by Catapult Ventures and included Kubota, Yamaha Motors, and Impact Ventures. The funds will be used to support company growth and adapt technology to include apple harvesting.Ā Ā
Londonās Jiffy Scoops $28M For Speedy Grocery Delivery. Jiffy operates a network of dark stores with the promise of delivering fresh groceries within 15 minutes. The Series A round was led by Heartland, a family-owned investment firm, and also included Flint Capital and the Family Office of the Bukhman brothers. The capital will be poured into expanding its network in London with the startup also eying expansions elsewhere in the UK.Ā Ā
Robotic Farming Firm Iron Ox Raises $53M. The Series C round was led by Breakthrough Energy Venture and brings the Bay Area-based startupās total funding to $90M. Iron Ox is aiming to rattle traditional farming by building robotic greenhouses that contain special harvesting technology. The round will go towards scaling manufacturing, R&D and expanding operations in the US.
Battery Resourcers Raises $70M to Grow Closed-Loop Battery Supply Chain. The Worcester, Mass.-based startup has developed a process that turns recycled battery material back into critical battery materials such as nickel-manganese-cobalt cathodes and purified graphite. The Series C round consisted of existing investors such as Orbia Ventures and Jaguar Land Roverās Inmotion Ventures as well as new investors Hitachi Ventures. The new funding enables Battery Resourcers to open two new commercial sites in Europe.
Emerge Raises $130M Series B to Scale Digital Freight Marketplace. The Arizona-based startup will use the funding to scale the marketplace which is built around reimagining transportation procurement and RFP management. The round, led by 9Yards Capital, Tiger Global Management and The Spruce House Partnership, now brings Emergeās raise total to $150M. The startup projects that 2021 gross revenue will sit around $200M and expects to run about $4B in freight through its system this year.
Hai Robotics Picks Up $200M for Its Warehouse Robot. Founded in 2016, Hai Robotics is based in Shenzhen, China and builds autonomous, case-handling robot systems used in warehouses. The funding comes from two separate rounds with 5Y Capital leading the Series C round and Capital Today leading the Series D. Hai intends to bolster its robot fleet with upgrades and further penetrate the global market with the funds raised from both rounds.
Project44 Acquires Last-Mile Tech Company Convey for $255M. The acquisition, along with previous acquisitions of Ocean Insights and ClearMetal, is a part of project44ās plan to leverage last-mile analytics and machine-learning capabilities for end-to-end supply chain visibility. Convey partners with big name brands such as Walmart and The Home Depot which allows project44 to upgrade its machine learning technology and parcel use cases. The real-time supply chain visibility provider now has access to more than 880 global shippers and logistics providers and a network of 113,000 carriers with 2.6M assets.Ā
General Motors to Invest $300M In Chinese Self-Driving Start-Up Momenta. Momenta, whose past investors include Toyota and Bosch, partners with automakers to use their vehicles to ultimately tap into their stores of data as opposed to only focusing on building cars themselves. Back in March of this year, Momenta recently closed a $500M Series C round. GM has a number of partnerships with Chinese companies, including state-backed SAIC, as the Detroit-based automaker views China as its largest market.
Mexicoās Kavak Drives Away With $700M in New Funding, Doubling Its Valuation to $8.7B. The raise, led by General Catalyst, marks the second time this year that Kavak has doubled its valuation. Kavak owns and operates a used car marketplace in Latin America via an online marketplace that brings transparency and accessibility to financing. The startup has doubled revenue every 3 to 5 months and has grown from 300 to 5,00 employees over the last 14 months. The capital raised will go towards expansion across the region.
SPAC Radar š”
Digital Freight Startup Transfix Going Public In SPAC Deal. The merger will increase the value of the digital freight startup to $1.1B. The deal means Transfix will gain public market backing and expand development of additional services offered as it competes with rival Uber Freight in using the latest technology to connect shippers with truckers. According to Transfix CFO Christian Lee, the company will remain focused on organic growth even though the merger opens up the door for more financing options like future acquisitions or mergers.
Company Building š ļø
The Average SaaS IPO Takes 12 Years. And it takes an average of 10 years to get to a $1B+ acquisition in SaaS.
KP: People Report 2021. Kleiner Perkins has published a report drawing from itās vast network and portfolio companies to help inform leaders on a more holistic way of attracting and retaining talent whilst scaling. We find it especially interesting to note point #3 - hybrid organizations are VERY hard to get right and ultimately might make building large businesses even harder.
Complex Language is A Warning Sign. āQuantitative research by Nomura shows companies whose executives use the most complex language on earnings calls produce lower returns.ā We suspect this is true even of startups - simplicity is a sign of mastery.
Who's Hiring? š©āš»
Vision Model Developer at Coros in Mountain View, CA (remote ok).
BDR at Nextmv in Philadelphia, PA (remote ok).
Product Marketing Manager at SVT Robotics in Norfolk, VA (remote ok).
š„ Have you seen any interesting startups recently? Introduce us.
ā¤ļø We would love your support. Please forward to friends and share on social media.
šļø If you were forwarded this and found it interesting, please sign up.
š Check out Dynamo's podcast series, The Future of Supply Chain.