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
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Supply Chain đŚ
US Intermodal Rail Traffic Softens in September on Supply Chain Woes. John Gray, from AAR has stated, âRail intermodal volume is clearly not what it has been and could be,â as intermodal rail transportation has declined 6.7% since September of 2020. Strategies to increase volumes include working with customers and truckers to help accelerate container pickup and increase storage capacity. Congestion at ports is delaying further inland logistics and driving the need for different modes and carriers to work together to increase throughput across the board. Related, Food Supply Chain Could See Relief Under New Funding.
Lead Times for US Factories Lengthen to Record on Supply Crunch. The ISMâs most recent survey of purchasing managers highlights that lead time for production materials has increased to 92 days. The last time lead times were this high was in 1987. Furthermore, MRO supplies lead times have matched the all-time record-long lead times and for capital expenditures, it is nearing a 32 year high. While producers wait on all the given components, holding costs and unfinished goods inventories continue to rise and further stalling of cash flows. In related news, 'Lead Times Are Less Secure Than They've Ever Been' - Distributor Bosses on The Impact of Supply Chain Issues.
Why Procurement and Supply Chain Functions Need to Converge. The supplyThe supply chainâs purpose has traditionally been about operational efficiencyâdelivering value by making sure that orders arrive from suppliers on time and in full, and delivering finished products. This is no longer enough, as has been evident with the current global supply shortages. Supply chain and procurement need to work together as only a tightly aligned supply chain can increase resilience, help with risk management, and accelerate innovation. The key to achieving this alignment is the software technology stacks that act as an enabler for siloed organizations. Also Improving Supply Chain Resilience Will Offer Competitive Advantages and Japan Mints New Economic Security Minister to Fix Supply Chain Disruptions.
Mars Commits to Net Zero Emissions Across Entire Supply Chain. As climate change and environmental impact becomes a bigger topic around the world. Mars is committing to achieving net zero greenhouse gas emissions by 2050 across its entire supply chain. This is an interesting announcement, mostly because of the implications for suppliers of the food giant, as they are âbeing encouraged by Mars to calculate their own GHG footprints and set science-based targets for reductionsâ. Itâs going to be interesting to follow what measures will be implemented by when on the road to net zero for mars. Also, Climate Change Poses High Risk to NestlĂŠ, Campbell Soup Supply Chains and Maersk is Committed to Decarbonisation .
Chinaâs Export Advantage is Being Squeezed by Soaring Sea Freight Prices and Rising Raw Material Costs. Some Chinese manufactures are left with no choice to pass on high shipping costs and commodity prices to buyers and importers, meanwhile, some are cutting back production to retain margins. Chinese exporters succeeded during the pandemic by directing focus on high value with low volume goods to reduce the frequency of high shipping costs while maintaining revenue. Furthermore, with developing countries slowly gaining access to COVID-19 resources, global manufacturing is returning, taking some demand off of the Chinese. Also, is China Losing its Export Advantage?
Warehouse Woes Driven by Labor Shortage, Not Capacity Scarcity. It is typical for fulfillment centers to be somewhat chaotic going into peak season. Although, scarcity of workers rather than the available floor capacity is the largest issue this year as increasing pressure and unattractive wages leave warehouses short-handed. Retailers such as Walmart and Amazon have pushed starting wages for warehouse staff to $15 to fill immediate needs but workers are seeking other benefits such as medical and retirement. Also related to labor, UK Offers Thousands of Visas to Foreign Truckers to Ease Driver Shortage and Supply Chain Issues, Labor Shortages Make Serving School Lunches a Struggle.Â
The Scariest Part of Halloween This Year Is the Supply Chain. The Retail Trade Federation stated that Halloween spending will reach an all-time high of $10.1B, compared to $9B spent by consumers in 2017. This has prompted retailers such as TJ Maxx, Loweâs, and Home Depot to get their spooky decor into the hands of shoppers earlier this year, but stocks are being eliminated nearly immediately. Sellers are predicting that the cutoff time to do âlast-minuteâ shopping will come weeks before the end of October and are even going to resellers to grow inventory levels. In other news, Supply Chain Havoc is Getting Worse â Just in Time For Holiday Shopping & Halloween Stores Haunted by Shipping Issues Just Weeks From Holiday.Â
Mobility đ
New Battery Storage Technologies Could Free Up More Lithium for EVs. Lithium batteries dominate the storage space because of their low cost, wide availability and flexible performance. Sodium-ion is capable of the same manufacturing processes that the lithium-ion industry uses which ultimately has the potential to achieve economies of scale. By using sodium, battery manufacturers can free up lithium supply and save on costs since sodium requires a lower cost of materials. Lithium, however, still boasts superior battery lifespans. In related news, BMW Group Invests in Innovative Method for Efficient and Sustainable Lithium Extraction.
GM Announces âUltra Cruiseâ to Enable âTrue Hands-Free Drivingâ. GMâs latest feature matches nearly 95% of driving scenarios in the US and Canada. The system relies on an upgraded suite of sensors that can receive OTA updates just like Tesla. Features include automatic lane changing, support parking in residential areas, and a new dynamic display. Around the same time Ultra Cruise was announced, GM shared that the âSilverado Eâ reveal is set to take place at CES 2022. In other GM news, GM Sets Ambitious Revenue Target, Challenges Tesla With $30,000 Electric SUV and GM Builds New Center to Unlock Cheaper, Longer-Range Batteries.
Battery Giants Face Skills Gap That Could Jam Electric Highway. Three of South Koreaâs largest battery manufacturers, which control a third of the global EV battery market, are in need of R&D specialists to continue developing cutting-edge technology. LG Energy Solutions, SK On, and Samsung SDI are responsible for supplying Tesla, Volkswagen, and Ford. According to SK On, the battery sector has grown exponentially, doubling in size over the last five years; however, there is still a shortage of at least 3,000 graduate-level positions. In related news, Mercedes to Add 300 Jobs at US Plant in Preparation for EV Production and New Tesla Megapack Factory Will Create 1,000â2,000 Jobs.
Midwest Governors Agree on EV Charging-Network Plan. The non-binding LOIs between Illinois, Indiana, Michigan, Minnesota, and Wisconsin are a big step towards pushing electrification in the region. The Midwest project comes about exactly 10 years after West Coast states allied to assure there was infrastructure for long-distance travel in EV. It looks like the midwest is getting serious about catching up in EV infrastructure. This is of course becoming increasingly important with states like Michigan being an automobile hub, and companies headquartered there like GM and Ford producing ever more EVs. For more on charging, consider reading Midwest Governors Agree on EV Charging-Network Plan and ABB Introduces 'Worldâs Fastest' EV Charger: Terra 360.
The Wait for Semiconductors Turns Ominous for Automakers. The average lead time, which is the time it takes to receive a semiconductor delivery after ordering, rose five days in September to 21.7 weeks. The wait time has now increased nine months in a row. Chris Rolland, an analyst at Susquehanna, wrote that ârecent distributor checks suggest no stabilization in 2021, with perhaps China power outages creating new bottlenecks in the supply chainâ. Since the average car contains nearly 1,400 semiconductors, itâs no surprise that the global automotive industry is predicted to lose $210B in sales this year due to numerous production halts. In related news, Top Global Chipmakers Resist Biden Bid for Supply Chain Data and Report: Half of New-Car Buyers Planning to Wait Out Semiconductor Chip Shortage.
Apple CarPlay Could Control More Parts of Your Vehicle in the Future. Project Titan, Appleâs attempt at developing its own vehicle, may not come to fruition anytime soon but one thingâs for sure â Apple is eyeing growth within the automotive industry. It doesnât look like Apple Carplay will become just another infotainment upgrade, but rather a remote that controls internal car controls such as A/C, seat positioning, and surround sound tweaks based on your iPhone preferences. It would resemble something similar to Appleâs HomeKit app, which is designed to control smart home settings. In related news, Apple's Big CarPlay Plans Probably Aren't Going To Be A Hit With Automakers.
Jeep Cherokee Production Down for Rest of October. October began a little over a week ago, and itâs already going downhill for Jeep. The Belvidere Assembly Plant in Illinois will be down the rest of month due to the chip shortage. The site employs 2,362 workers and has already wrestled with production downtime this year after cutting its second shift. Cherokee sales fell 20% in September and with production on pause sales could fall even further. Recently, Stellanitis, the parent company of Jeep, also issued pauses at its Brampton Assembly Plant, which is home to the Dodge Charger and Chrysler 300, and its Jefferson North Assembly Plant responsible for assembling the Grand Cherokee and Dodge Durango. For more on production stops, check out VW Extends Partial Production Stop in Mexico, Union Says and Auto Output Dives in Brazil, Mexico as Chip Shortages Bite.
Fundraises and M&A đ¸
Made of Air Raises $5.8M Led By TD Veen . Made of Air is a leading carbon-negative materials company that turns wood waste into thermoplastics. Also participating are Patrick Pichette (former CFO of Google and chairman of the board of Twitter), EQT Group, Thomas Von Koch (CEO & co-founder of EQT Group), Tuesday Capital, the co-founders of Pexip and Olympic gold medalist skier, Aksel Lund Svindal. Over the coming months, Made of Air will significantly expand production capabilities by bringing a new factory online, scaling the team with additional hires in R&D, product, and business development, announcing additional partnerships with global brands, and continuing to research and develop carbon-negative materials.
RoboTire Raises $7.5M LedBy The Reinalt-Thomas Corporation. The underlying technology of RoboTire is capable of changing a set of tires in less than 15 minutes, by the companyâs count. From the sound of things, Discount Tire will be among the first to adopt the automated tech.Â
YC-Backed CostCertified Lands $8.45M Led By FUSE. CostCertified is a Canadian startup that provides real-time, interactive residential construction estimates. The company is also backed by Y Combinator, I2BF Global Ventures, Soma Capital and a number of proptech/construction tech founders such as Willy Schlacks, CEO and co-founder of EquipmentShare; Ryan Sutton-Gee, PlanGrid co-founder and former COO; Jonathan Wasserstrum, co-founder and CEO of SquareFoot and Bill Smith, founder and CEO of Landing. The raise marks CostCertifiedâs first external round of funding.
Normative Raises âŹ10M Led By 2150 and ETF Partners. Normative sets a new standard in scientific accuracy for emissions accountancy, powered by its market-leading emissions database. The funding from 2150 and ETF Partners cements Normativeâs position as the leading European carbon accounting SaaS company. Existing investors Lowercarbon Capital, ByFounders, and Luminar Ventures participated in the round.Â
AutoLeap Raises $18M Led By Bain Capital Ventures. Joining Bain in the round is existing investor Threshold Ventures, which led the seed round, to give the company $23M in total funding. With the funding, Autoleap is looking to triple its workforce in the next 12 months and will be focusing on creating a diverse employee base.
Slope Raises $20M Led By NEA. The round will accelerate go-to-market efforts and further expand into decentralized and direct-to-patient clinical trials. With funding, Slope expands its technology-driven infrastructure solution to coordinate and automate clinical trial supply chains for decentralized and direct-to-patient clinical trials.
eCommerce Logistics Startup Pandion Raises $30M Led By Bow Capital. Pandion raised an oversubscribed $22.5 million Series A round, immediately followed by a $7.5M additional investment led by new investor Telstra Ventures. The Series A round was led by Bow Capital with participation from existing investors Playground Global, Schematic Ventures, AME Cloud Ventures, and Innovation Endeavors. The new funds will support the hiring of more than 80 people for the Quakertown facility, as Pandion begins dynamically routing packages for Fortune 100 retailers ahead of the holiday shopping season.
Wise Systems Raises $50M Led By Tiger Global Management. Additional participation in the round from new and existing investors that include Section 32, Valo Ventures, Gradient Ventures, and Prologis Ventures. Wise Systems is a leading AI-driven routing and dispatching platform provider. The company will use the financing to further accelerate product development, market expansion across key geographies, and address the increasing global demand for the companyâs next-generation dispatching and routing solutions. Â
Beacon Raises $50M Led By Northstar.vc. Upper90 also participated as a new investor. Existing investors also participated in the Series B round, including Jeff Bezos, the founder and executive chair of Amazon, Marc Benioff, founder, chairman and CEO of Salesforce, as well as leading US venture capital firms 8VC and Expa. Beacon is a leading digital supply chain and freight platform. The fresh capital will be used to grow the team, continue the development of Beacon's technology and expand into new markets.
Huboo Raises ÂŁ60M Led By Mubadala Capital. Participating in the round are existing investors including Stride, Ada Ventures, Hearst Ventures, Episode 1 and Maersk Growth. Huboo is a U.K. startup that operates a multi-channel fulfillment service for e-commerce businesses of varying sizes. The investment will help propel their expansion across continental Europe, having already opened their first mainland European base in Eindhoven, The Netherlands and soon to be opening of their first Spanish fulfilment centre in Madrid.
All Day Kitchens Raises $65M Led by Lightspeed . Existing investors Andreessen Horowitz, Founders Fund, Khosla Ventures, and Base10 also participated in the round, and new investors include real estate firm, Tishman Speyer, Lime CEO, Wayne Ting, and Forward co-founders, Adrian Aoun and Ilya Abyzov. All Day Kitchens' mission is to empower restaurants to thrive in the digital ordering and delivery era. With the new round of funding, All Day Kitchens is hiring rapidly for the HQ team, and opening several new markets across the US.
Ola Electric Raises $200M Led By Falcon Edge Capital. Among the other backers is existing investor SoftBank. The startup, which was once part of the ride-hailing giant Ola, said it will deploy the fresh funds to accelerate development of other vehicle platforms, including electric motorbike, mass market scooter and its electric car. Itâs also setting up what is the worldâs largest manufacturing factory for electric scooters.
Softbank Backed Reef Has Acquired Micro-Warehousing Startup Bond For An Undisclosed Sum. Reef Technology, a Softbank-backed company that turns parking lots into ghost kitchens and logistics hubs, has agreed to acquire its logistics partner, Bond, for an undisclosed sum. The move is a sign that Reef and Bond's hyper-local delivery is quickly growing beyond food at a time when online sellers are scrambling for every bit of last-mile delivery capacity.
Qualcomm and SSW Partners Reach Definitive Agreement to Acquire Veoneer. today announced they have reached a definitive agreement to acquire Veoneer, Inc. for $37.00 per share in an all-cash transaction, representing a total equity value for Veoneer of $4.5B. Veoneer was looking for a buyer, reasoning that it needed to size up to compete with other driver-assistance technology providers.Â
SPAC Radar đĄ
SPAC Semper Paratus Acquisition Files for a $300M IPO, Led by Former UPS CFO. Semper Paratus Acquisition, a blank check company led by the former CFO of UPS targeting transportation, supply chain, and logistics, filed on Thursday with the SEC to raise up to $300 million in an initial public offering. The company plans to target the transportation, supply chain, and logistics industry in any stage of the target's corporate evolution.
Who's Hiring? đŠâđť
Customer Success Manager at Leaf Logistics in New York, NY (remote ok).
Channel Partner Manager at SVT Robotics in Norfolk, VA (remote ok).
Site Reliability Engineer at Coros in Mountain View, CA (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.