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 💭
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Santosh, Jon, Barry, Ted, Katie, Clay, Skyler, and Lukas
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Supply Chain 📦
No More Room At the Logistics Warehouse Inn, Prologis says. Prologis is the world's largest warehouse operator, boasting more than 995M ft² of space across the portfolio. In their Q3 earnings report, chairman and CEO Hamid Moghadam shared, “space in our markets is effectively sold out,” while vacancy rates have remained at “unprecedented lows.” Maintaining occupancy for the year at roughly 96.5% has given Prologis the pricing leverage to increase rents by 27.9% over the 2020 period for new and renewed leases. Also, Critical Shortage of Warehouse Space Adds Further Threat to Christmas Supplies.
Ikea Expects Shortages Due to Supply Chain Crisis Until Mid-2022. Retailers are retaining a less than optimistic outlook for getting goods to their customers. Inter Ikea CEO, Jon Abrahamsson shared, “The biggest challenge has been getting products out of China, where there has been a very limited capacity.” These supply issues are placing merchants in a position to be decisive on what products to prioritize and mean fewer options for consumers to pick from. Abrahamsson believes this will be an enormous challenge for existing supply infrastructure to work through. In related news, Bed Bath & Beyond Just Proved How Very, Very Broken Retailers' Supply Chains Are.
Biden Administration Efforts to Address Bottlenecks at Ports of Los Angeles and Long Beach, Moving Goods from Ship to Shelf. The Biden Administration recently created the Supply Chain Disruption Task Force in response to the capacity crunch across supply chains. Earlier this week, the group announced its initial set of interventions - read Santosh’s thoughts here.
USPS, FedEx, UPS Release Ship-By Dates for Holidays. In 2020 mail carriers struggled with the early holiday shipment volumes as more and more shoppers sent their packages earlier. This is leading many carriers to look ahead to warn customers that their capacity is already accounted for - months earlier than normal. FedEx has increased its capacity for ground deliveries through critical infrastructure investments, described in their previous earnings call. Similar actions were taken by the Postal Service who shared they added an additional 45 annex facilities to support overflow. In related news, UPS and FedEx Looking to Hire Almost 200K Combined Positions Across the Country.
Japan’s New Leader Vows Money to Make Chips at Home. Japan’s new Prime Minister Fumio Kishisa is shifting the country’s attention to domestic chip production. Japanese automakers have been forced to throttle back production due to the ongoing chip crunch, highlighting Japan’s need to reduce reliance on other countries to make semiconductors. The government has subsidized almost $7B for a factory that TSMC and Sony are planning to build in western Japan for chips used in cameras and cars. In related news, Hyundai Could Be Starting To Turn The Corner On Computer Chip Shortage and TSMC Predicts Gross Profit Margins of 50% After Global Chip Shortage.
Former LVMH Chairman Claims Supply Chain Issues ‘Not as Big a Factor’ For Luxury Retail. Former chairman of LVMH North America, Pauline Brown shared that the supply chain for luxury goods is not in the same position as those faced by toys and high-volume manufactured goods. Luxury goods are primarily produced in Europe where the supply constraints are not at the extremes compared to Asia to US logistics routes (although, luxury goods such as watches and jewellery are among those most impacted). Pauline Brown also noted that LVMH brands experienced the largest growth in Asia and US with growth of 34% and 22% respectively in Q2 of this year. In other news, Retail Sales Unexpectedly Rise in September as Consumers Keep Spending.
Little Relief Expected in US Trucking in 2022. Shippers are becoming exhausted with high rates, logistics capacity scarcity, and low inventory levels that cannot keep up with demand. Looking past the holiday season, the tailwinds of the current environment suggest that eCommerce will not be walking back to previous levels and freight prices will likely remain sticky according to Paul Bingham, Director of Transportation Consulting at IHS Markit. Reduction of government relief and fiscal stimulus should support a drawback in consumer spending that will enable a rebalance of inventories but retain pressure on carriers to the goods there. Elsewhere in trucking, Driver Shortages are Causing Supply Chain Issues.
Mobility 🚗
Delta Air Lines CEO Warns Fuel Costs Could Dig Into Profits. A global fuel crisis is causing a surge in prices that will affect Delta’s Q3 earnings report. Fuel is the airline’s second-largest cost, outside of labor, which has risen nearly 60% this year. This year’s overall revenue is anticipated to hit 75% of pre-pandemic levels but this expectation could be thwarted depending on the length of time these high costs hang around. According to CEO Ed Bastian, Delta’s primary concern isn’t “the variant” as most people have assumed. In related news, Southwest Pilots Warn Fatigue, Frustration Could Fuel Further Outages and United Airlines Plans New Flights to Jordan and Europe in Bet On Revival of International Travel.
Honda Announces All New Models Will Be Electric After 2030… But Only in China to Start. Honda has been lagging behind in the adoption of EVs in comparison to other major automakers. It currently offers only one electric vehicle called the Honda E which is sold in Europe. Starting in 2022, two production models dubbed “e:NS1” and “e:NP1” will go on sale. Honda’s focus is strictly on China but the automaker shared in a press conference that in the future it envisions exporting from China. In regards to the US, the Prologue, which is based on GM’s Ultium electric platform, will arrive in 2024. The Japanese automaker projects that they’ll sell 500,000 EVs by 2030 which has left many industry analysts scratching their heads in disbelief. For more on Japanese automakers, check out Toyota Will Cut Production In November by 15% Amid Chip Shortages and Nissan Unveils Intelligent Assembly Plant.
Tesla Debuts New Car Insurance That Uses Texans’ Real-Time Driving Behavior. The EV automaker doesn’t care about age, gender, or driving history when calculating a customer's insurance premium. Instead, Tesla cares about monthly “safety scores,” which range from 0 and 100, where a higher score indicates safer driving. This means the rate could fluctuate from month to month depending on driver behavior. Owners who are new to the insurance program start with a safety score of 90. Tesla introduced the first version of the insurance in California back in 2019. In other Tesla news, US Asks Tesla Why It Did Not Recall Autopilot After Software Changes.
Top-Rated Headlights Linked to Lower Nighttime Crash Rates. A study conducted by Insurance Institute for Highway Safety (IIHS) found that nighttime crash rates per mile are about 20% lower for vehicles with headlights that earn a “good” rating. Whereas headlights that receive a “marginal” rating are only 10% lower. The study evaluated 44k single-vehicle crashes that occurred in darkness and also found that driver injury was reduced by 30% in incidents with cars that have good-rated headlights. To learn more on how IIHS develops its rating system check out Good IIHS Headlight Ratings Linked to Lower Crash Rates.
GM to Recover $1.9B in Bolt-Recall Costs in Deal With LG. LG will reimburse General Motors because of manufacturing defects in battery modules supplied by the Korean company. Back in August, the Detroit automaker expanded the recall to include all Chevy Bolts assembled since 2016, affecting nearly 142k units. The recall cost GM $2B in charges which have been one of the costliest charges in the company’s history. Back in September, GM announced that it hopes to begin producing flaw-free battery cells and replacing modules in the recalled vehicles starting this month. Related, The Battle for Motor City: Why Ford Chose Tennessee for Its Electric Factory.
VW CEO Warns a Delay In Shift to Electric Vehicles Could Cost 30,000 Jobs. Reports have emerged that, back in September, VW CEO Herbert Diess told a supervisory board meeting that VW will have to speed up its EV transformation in order to compete with new entrants emerging in the German market such as Tesla or Chinese automakers. VW is in the process of transforming its main plant to produce EVs. The only problem is that EVs require fewer parts which also translates to fewer workers. Could VW lose its firm grip on the German market? According to Diess, the competition does pose a significant threat. New entrants have so far demonstrated the capability to increase efficiency in production. Also, UK Study Shows 6 Out Of 10 Drivers Would Consider An Electric Car.
Horace Dediu on The 10 Micromobilty Commandments. Chock-full of interesting data, Dediu reminds us how the majority of our travel are distances 10 miles or less vs the vehicles we drive are for distances 100 miles or more. It’s also worth paying attention to the thinking around micromobility being more than technology but having awareness and application in context to city environments. Enjoy!
Fundraises and M&A 💸
Dynamo-portfolio Company, sennder Raises Extension To Series D From Fiege. Sennder is Europe’s leading digital road freight forwarder. Fiege will act as an investor and a strategic partner to sennder. The partnership with sennder’s digital expertise on one hand and Fieges operational experience on the other will bring benefits for both companies.
SmartRyde Raises $1.6M Led By Angel Bridge. SmartRyder is a Tokyo, Japan-based marketplace to connect local transportation operators and online travel agencies. Additional participation in the round are SG Incubate, Yamaguchi Capital, SMBC Venture Capital, Hiroshima Venture Capital, Iyogin Capital, Inventum Ventures, Shouji Kodama, Nobuaki Takahashi (NOB LLC), and Optima Ventures.
TrusTrade Raises $6M Led By Industrifonden And Fairpoint Capital. TrusTrace enables product-level traceability and supply chain transparency to drive better, more sustainably-conscious and socially-responsible sourcing decisions. BackingMinds and Fashion for Good also participated in the round. The new capital will be used to further accelerate global expansion, expand product development, and strengthen the team.
RodRadar Raises $6M Led By Brick & Mortar Ventures. RodRadar is an Israeli sensor technology startup focusing on utility strike avoidance. Additional investors include Mayers Cars and Trucks Group, Dysruptek – Haskell engineering and construction venture’s arm, and HOLT Ventures – the venture arm of HOLT CAT. The company will use the funding to complete product engineering and engage additional customers and partners.
TruckLabs Raises $15M Led By Calibrate Ventures, Autotech Ventures, and Uncork Capital. TruckLabs provides a product suite that empowers fleets to improve their operational performance by boosting fuel efficiency, increasing driver engagement, and reducing carbon emissions. The funds will be used to expand hiring across product, sales, and engineering; invest in ongoing research and development.
Mayd Raises $15M in Seed Round. Mayd is a medicine delivery platform that partners with small-scale pharmacies that tend to be the norm in the EU. Investors include 468 Capital, Earlybird, and Target Global. The funds will be used to carry out its vision of delivering meds to customers within 30 minutes if they’re ordered before midnight.
Rose Rocket Raises $25M Led By Addition Capital and Shine Capital. Rose Rocket is uniquely positioned to be the transportation industry’s first network-driven SaaS company, where collaboration between the various network participants drives the growth of the platform and opens up meaningful monetization opportunities. Additional Investors include Ripple Ventures, ScaleUP Ventures, FundersClub, Y-Combinator and Kevin Mahaffey. The money raised will be used primarily to scale operations and invest in product growth.
Zest Raises £30M Led By Zouk Capital. Zest is a new public EV charging company whose mission is to grow a network that makes fast charging available where people regularly park for more than 30 minutes. The Charging Infrastructure Investment Fund (CIIF) also participated in the round.
Battery Resourcers Raises $70M Led By Hitachi Ventures. Battery Resources has engineered a process to turn that recycled material back into critical battery materials — specifically, nickel-manganese-cobalt cathodes and purified graphite, a material used in anodes. Existing investors Orbia Ventures, Jaguar Land Rover’s InMotion Ventures, Doral Energy, At One Ventures, TDK Ventures and Trumpf Ventures participated in the round.
Reliable Robotics Raises $100M Led By Coatue Management. Reliable Robotics is aiming to solve that pesky needing-to-have-a-pilot-in-the-plane problem by, instead, putting the pilot on the ground when you need it, and leaving the plane to find its destination on its own the rest of the time. Participating investors include Lightspeed Ventures, Eclipse Ventures, Teamworthy Ventures, and Pathbreaker Ventures. The funds will go toward scaling the team and supporting its first aircraft certification program — working toward commercial cargo operations.
Dexterity Raises $140M Led By Lightspeed Venture Partners and Kleiner Perkins. The warehouse robotics firm came out of stealth in July of last year with the vision of making the best warehouse robots capable of handling anything from loosely packed deformable polybags, to delicate hot-dog buns, to floppy tortillas, to poorly sealed cardboard boxes, to bags of earthworms, to trays and crates of consumer food, to even a molten birthday cake. Additional investors include Obvious Ventures, B37 Ventures and Presidio Ventures. The company says funding will go toward deploying its first thousand robots into the world.
CarDekho Raises $200M in Series E Round. CarDekho is an Indian search and eCommerce platform for new and used cars. The round was led by LeapFrog Investments and was joined by Canyon Partners, Mirae Asset, and Sequoia Capital India among others. The capital will be used to expand its used car and financial services businesses. The recent raises also means that the 14-year old startup reached unicorn status.
Pon Holdings To Buy Cannondale Parent Company Dorel Sports To Become World's Biggest Bike Manufacturer. Netherlands-based Pon Holdings, which owns brands including Cervélo, Focus, Gazelle, and Urban Arrow, is to buy Canada’s Dorel Sports, owner of Cannondale, to create what it says will be the world’s biggest manufacturer of bicycles and e-bikes, with annual sales of €2.5B.
SPAC Radar 📡
Hydrogen Fuel Firm ECombustible Eyes $1B SPAC Deal. ECombustible, a maker of hydrogen-based fuel, is in talks to merge with blank-check firm Benessere Capital Acquisition Corp. Benessere is discussing a potential deal that could value the combined entity at about $800M to $1B. Details of the potential transaction could still change, and there’s no certainty the negotiations will lead to an agreement, people familiar with the matter said.
Gett Closing On $1.3 B SPAC Merger. Global corporate ground travel company Gett is closer than ever to going public in the US via SPAC at a valuation of $1.3-1.5B.
Who's Hiring? 👩💻
Lead Mechanical Design Engineer at Manna in Dublin, Ireland.
Computer Vision Model Developer at Coros in Mountain View, CA (remote ok).
Customer Support Engineer at Vizion in Palo Alto, CA (remote ok).
💥 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.