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 💭
This week’s key headlines were dominated by on-going turbulence in international logistics whilst battery headlines led on the mobility side. It’s worth noting that global supply chain dislocations or the “cargo crunch” as we call it is not going away anytime soon - it might be worth shopping for the holidays now rather than waiting 4 weeks!
Special thanks to Matt Blomstedt and Shelley Lin for the pass-a-longs.
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Santosh, Jon, Barry, Ted, Katie, Clay, Skyler, and Lukas
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Supply Chain 📦
Asia Pacific Battling Peak Season Air Cargo Capacity Crunch and Rising Rates. With container ships idling outside of US ports, many shippers are looking to alternatives to ensure they have goods for their customers during the holiday season. These bottlenecks have driven a 26% YoY increase in air cargo demand in August according to the Association of Asia America Airlines. They also stated that airlines had an increase of 17.8% for cargo capacity due to lack of travelers as COVID-19 negated many people’s international trips. Chartered flights prices have furthermore tripled compared to a year ago as shippers are already at limited freight capacity for the holiday season. Related, CMA CGM to Supplement New Air Cargo Fleet With 777Fs.
Successful Driver Recruitment Is a Multifaceted Issue. Truck driver environments from COVID-19, alternative income sources, a retiring workforce and regulation on the trucking industry is leaving retail stores across the US with empty shelves and unsatisfied customers. An example of such regulation is found in California where a new diesel engine rule took out of service some $20B of diesel equipment, including trucks, farm, and construction equipment. Furthermore, in a TenStreet survey of drivers, they identified that the top 3 reasons drivers leave carriers is work consistency, time at home, and pay. In related news, America’s Supply Chain Truck Wreck & There is Never a Bad Load, Just a Bad Rate.
Dude, Where’s My Stuff?. Whether it is idle or anchored container ships, rapidly increasing shipping rates and global manufacturing delivery times many are asking the same question, why are there so many bottlenecks in the global supply chain? A combination of consumer goods demand surges, driver shortages, and pandemic-related impacts are driving the future landscape of logistics. According to the global trade volume index, there are more goods being shipped than ever before. As well, global container production and services are increasing to match the needed capacity and build global supply resilience. Also, Pick Your Bottleneck: Ports, Chassis, Containers, Labor & Carrier Schedules in Disarray as Congestion and Delays Continue.
Trans-Atlantic Capacity Injection Blunted By Logistics Bottlenecks. Contract rates are doubled and trans-Atlantic spot rates are tripled from their 2019 respective. To further the situation port congestion increases continually raising delays further increasing the expense of beneficial cargo holders. Carriers have added just over 60K TEUs from March to August but have had no impact on rates as importers during a historically high fourth quarter and holiday season. As well, shipping schedules continue to deteriorate as vessels on-time departures have decreased by six percent. In related news, Transatlantic Container Shipping Spot Rates Jump 210% -BIMCO.
Bed Bath & Beyond Shares Dive 20% as Supply Chain Impacts & Inflation Eat Profits. This 22% drop in shares, is the result of sharp customer drop-offs that contributed to results that were lower than the previous quarter. Chief Executive, Mark Tritton shared that the escalating supply chain complications and increased logistics costs during the summer months deteriorated the margin. This has forced the home goods giant to slash earning projections for the year by nearly 9%. Although, this case shines a light on other department store retailers such as Kohl’s, Nordstrom, and Macy’s, all of which experienced downturns in the market this week. In related news, The World’s Top Central Bankers See Supply Chain Problems Prolonging Inflation.
China’s Manufacturing Weakens, as Power Cuts Threaten More Damage. For the first time in 18 months, China’s manufacturing has contracted as their index falls to 49.6 from 50.1. China has leveraged its manufacturing to propel economic rebound as it was the only major country to experience economic growth in the last year. Many have linked the concerns around energy supply to manufacturing risk as more than half of China’s provinces exceeded their energy consumption requirements. This is an effort to reduce emissions and curb consumption which has driven the price for coal while reducing output in factories. It’s worth checking out, China Seeks to Quell Power Crunch Fears, as Coal Prices Soar, Winter Nears & It's Official. China's Manufacturing Industry is in Trouble.
The $14T Reason You Should Care About The Shipping Container Shortage. Roughly 90% of goods are transported by sea and of that, 60% comes in large metal containers. This significant use comes from the fact that they were standardized that drove efficiency and lowered cost making it only $5.86 per ton to load a ship in 1956. Although, when not running efficiently our dependence is costly. Best seen when the Suez Canal was blocked, costing $400M per hour block. Meanwhile, shipbuilders are working to develop vessels that can increase the capacity of ships by 50% by 2030.
‘Global Transport System Collapse’ Could Happen, Supply Chain Workers Warn. The individuals that keep goods flowing and the lifeblood of the economy moving have dealt with quarantines, travel restrictions, and other COVID-19 impacts. On Wednesday an open letter to the heads of state at the United Nations General Assembly, warning of a “global transport system collapse” if governments do not reinstate the freedom to move goods and provide priority access to vaccines to those who work in the global supply chain. Some of the signers of this letter include Intentional Air Transport Association, Road Transport Union, and International Transport Workers’ Federation, representing a mere 65M transportation workers. Other news in the supply chain labor market, Nearly 300 Layoffs Announced at 2 Logistics Companies & There is No Way to Dodge The Ongoing Labor Shortage Issues.
Mobility 🚗
China's Electric Carmakers Make Their Move on Europe. Nio, a Chinese EV automaker valued at $57B, is leading the trend of Chinese automakers advancing into Europe. The biggest hurdle Chinese auto companies face isn’t popular brands already established throughout Europe, such as BMW or Volkswagen, but rather a widely-held belief that Chinese cars are cheap and lack good quality. Nio has launched the first EV in Norway, a place where EVs are all the rage, in order to see quicker market penetration. In related news, Shift to EVs Means Huge 'Reskilling' Job for Europe and Ford Extends Production Halt at German Plant.
Business Travelers, Expect More Zooms and Few Trips This Fall. It looks like the travel industry will continue suffering as we move into 2023 with the rise of the Delta variant still affecting many areas across the globe. There is a vast amount of evidence pointing to the fact that business travel will be permanently affected, with some research indicating that 19% to 36% of business travel will be disrupted. While major airlines believe COVID will continue affecting travel, they believe that eventually, things should return to normal. In other travel news, Domestic Flyers May Need to Show Proof of Vaccination if Senate Bill Passes.
Foxconn Will Build EVs for Lordstown Motors and Fisker at Ohio Plant. Foxconn will pay $230M for the facility which Lordtown originally bought from GM in 2019. The 6.2 million square foot facility will become home to the Endurance, Lordstown’s full-size electric pickup. Lordstown had a string of misfortunes earlier this year as the company burned through capital much quicker than anticipated and couldn’t meet production projections. Both companies are looking to gain market share in electric vehicle production in North America. Also, America Just Welcomed Another Car Company Into Production and Chip Shortage Leads Carmaker Opel to Shut German Plant Until 2022 .
Toyota, Honda, Hyundai Fall Again in September; Chips Take Q3 Toll on GM, Stellantis. General Motors Q3 light-vehicle deliveries fell 33%, the lowest three-month figure since 2009 when the company went bankrupt. Toyota reported a 22% decline in sales last month and deliveries fell 25%. The story remains the same for almost every other automaker as the chip shortage continues to constrain production. There is one exception–Genesis posted a 332% increase in September volume. Taking to Twitter, ARKInvest’s Cathie Wood Questions Legacy OEMs Blaming Sales on Chip Shortages.
Ford, Partner to Spend $11.4B on Four New Plants in Tennessee, Kentucky to Support EVs. The new plants account for the largest manufacturing investment in Ford’s 118-year history. The Tennessee complex will be the largest manufacturing campus ever built in the US and will employ nearly 6,000 people. The Kentucky campus, called BlueOvalSK Battery Park, will employ 5,000 people and will support the EV production of both Ford and Lincoln. If all goes well, the facilities should be in operation by 2025.
Mercedes-Benz Plans $8.2B European Battery Venture. Daimler has invested in Automotive Cells Company with intentions of reaching carbon neutralization milestones and has partnered with Stellantis NV and TotalEnergies SE. ACC projected that, by the end of the decade, production capacity will reach 120 gigawatt-hours and aims to become Europe’s leader in battery production. This investment follows Mercedes’ announcement of investing nearly $46B to “electrify its lineup” this decade back in July. For more on the state of EV batteries, consider reading QuantumScape Competitor Seeks EV Battery Gold in Fool’s Gold and Researchers Propose Fire-Preventing "Anti-Short Layer" for EV Batteries.
Robotaxis Getting Real In California — Waymo & Cruise Get Permits To Roll Out Robotaxis. On Thursday, the state of California approved the implementation of autonomous taxis in parts of the state. However, the permits are not the same. Cruise can only travel up to 30mph while Waymo, on the other hand, can travel up to 65mph. It should be noted that Waymo has to have to incorporate safety drivers in the vehicles while Cruise can truly operate without human intervention. Tesla, an autonomous competitor of both Waymo and Cruise, is choosing a different rollout strategy, one that will eventually allow the automaker’s vehicles to be “robotaxi capable on any road on Earth.” For more on autonomous vehicles, Tesla FSD Beta Highlights: V10 Update Fixed Some Things, But Regressed in Certain Areas and Oops, You Just Collided With An AI Self-Driving Car, What Happens Next?.
Fundraises and M&A 💸
GrayMatter Robotics Raises $4.1M Seed Round. GrayMatter Robotics, the creator of smart robotic assistants that help humans more safely and effectively do surface treatment tasks such as sanding and spraying on manufacturing lines, aims to use the funds from Stage Venture Partners, Calibrate Ventures, and others to expand rollouts of its robots used for sanding and finishing parts on manufacturing lines.
Ubco Raises $10M in Series B Round. Ubco is a New Zealand-based Utility Electric Vehicle (UEV) company that provides a digitally connected platform including on and off-road transport, portable power, accessories, and cloud-based subscription software. The round was led by Jubilee Glory Investments with participation from Seven Peak Ventures, Nuance Capital, TPK, and existing venture investors GD1, and wholesale investment partners Snowball Effect and Enterprise Angels. The company intends to use the funds to expand operations and its business reach.
Burro Raises $10.9M in Series A Round. The company’s primary offering is an autonomous cart, which can be used to move crops from the field. Burro utilizes what it calls “pop-up autonomy,” which is able to navigate a space without training. The system can be used to augment field hands, which are currently in short supply. S2G Ventures and Toyota Ventures led the round, which also featured participation from F-Prime and ADM Capital, who joined existing investors Radicle Growth and ffVC.
Inventory Optimization Startup Flieber Raises $12M in Series A Round. The round will help New York based Flieber continue developing its inventory optimization platform that uses analytics and machine learning to give multi-channel brands a leg up when it comes to determining what the ideal stock level would be across all of the sales channels and inventory locations. The investment was co-led by GGV Capital and Monashees to bring the company’s total funding to $20M.
Phiar Technologies Raises $12M in Series A Funding. The Redwood City, CA based company focused on AI-powered Augmented Reality navigation for driving will use the round to accelerate its business with OEMs and Tier-1 partners in the automotive industry. The round was led by State Farm Ventures with participation from Cambridge Mobile Telematics and Telenav, and previous investors Norwest Venture Partners, The Venture Reality Fund, and GFR Fund.
Dance Raises $19.15M in Series A Funding. Investors include Eurazeo, HV Capital and BlueYard, as well as a number of business angels. The company intends to use the funds to scale the business, including doubling the team to add more operations, engineering and sustainability-focused team members, and launch in additional markets in Europe through 2022.
EV Ride Hailing Startup Blusmart Raises $25M Series A. This marks BP Ventures first direct investment into India. Additional investors include Mayfield India Fund, 9Unicorns and Survam Partners. BluSmart will use the capital to expand its fleet of electric vehicles and charging stations from its home city of Delhi to five additional Indian cities in the next two years.
Intenseye Raises $25M in a Series A Round. The startup uses computer vision to monitor the workplace and workforce for procedure violations, culminating in the reduction of workplace injuries. The new funding is expected to expand the company’s go-to-market strategy and further support its existing customer base of international manufacturers. This marks one of the largest investments in the Turkish startup ecosystems to date. The round was led by Insight Partners with significant participation from existing investors Point Nine and Air Street Capital.
Schüttflix Raises $50M in Series A Round. The service effectively replaces the middleman and connects suppliers and carriers directly with consumers in the building industry. The new round is expected to accelerate Schüttflix’s planned entries into the Austrian, Polish, and Czech markets in 2022. Additional investors include HV Capital, Speedinvest, and Strabag. Notable here is Stragbags participation as they are a dominant player in any and all things construction in Austria.
eMotorcycle Maker CAKE Closes $60M Series B Round. CAKE is a Swedish electric bike company born out of a passion for gravity sports, and on a mission to develop the highest performance electric two-wheelers with the mission, to inspire and contribute to accelerating towards the zero-emission society, combining excitement with responsibility. The round consists of convertible notes of $14M and a $46M financing round. The latter was led by Swedish pension fund AMF, according to Cake. A handful of new investors also participated in the round, as well as existing stakeholders Creandum and Headline.
Delivery Platform Avo Raises $84M in Funding. Avo aims to deliver everything from groceries and alcohol to electronics and personal care items to millions of people daily. Its customizable amenity platform allows residential and commercial customers to get everyday items the same day, without any minimum order size or delivery fees. Avo’s most recent investment round, a $45M Series B round led by New York-based global private equity and venture capital firm Insight Partners, will be used to rapidly expand operations across 10 major markets over the next 12 months. Existing investors Kleiner Perkins and JLL Spark also took part in the Series B round.
American Airlines Invests $100M in Bill Gates Led Clean Technology Development Project. The project's goal is to finance programmes intended to support cleaner aviation technologies. American Airlines says its $100M investment in Catalyst makes it an “anchor partner” of the programme and demonstrates its commitment to reducing carbon output.
Ninja Van Secures $578M Series E. Ninja Van is a tech-enabled express delivery firm serving businesses across Southeast Asia. The latest round topped at a valuation of more than $1 billion prior to a potential initial public offering as early as next year, according to media reports. Investors include China’s Alibaba Group as well as existing investors DPDgroup’s GeoPost, Facebook co-founder Eduardo Savering’s B Capital Group, Monk’s Hill Ventures and Zamrud, a sovereign wealth fund. Ninja Van will use the proceeds to strengthen its operations including micro supply chain solutions to optimize e-commerce opportunities in Southeast Asia.
SPAC Radar 📡
EV Maker Polestar Strikes $20B Deal with Gores Guggenheim SPAC. Swedish electric-car maker Polestar said on Monday it will go public by merging with a S-listed blank-check firm backed by billionaire Alec Gores and investment bank Guggenheim Partners at an enterprise value of $20B. This is one of the bigger SPAC deals in the EV space, and is expected to help Polestar build out it’s EV market share faster.
Who's Hiring? 👩💻
Logistics Coordinator at Tenderd in Dubai, UAE.
SDR at Coros in Mountain View, CA (remote ok).
Systems Engineer at Plus One Robotics in San Antonio, TX.
💥 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.