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
ATA Predicts Record High Driver Shortages. Based on driver demographic trends the American Trucking Association forecasted that driver shortages will reach 80K by year-end. Furthermore, current trends show that the shortage could double to 160K in less than a decade. Drivers are leaving the industry for a variety of reasons including retirement, need of lifestyle changes, and failed drug tests. The largest proportion of those leaving is due to retirement as the workforce ages out. Other issues go as far as infrastructure that makes life for drivers more difficult such as lack of parking spaces and overall congestion. These difficulties have reinforced wages for drivers as long-haul drivers who experienced raises five times that of the historical average. In related news, Drivers & Port Workers Voice Frustration.
Dock Workers Share âWe Canât Keep This Pace Up Foreverâ. Workers have been going 24/7 trying to unclog the record number of ships waiting outside US ports, but they are exhausted. One of the common headaches includes the disorganization of containers that forces workers to delay unloading in order to make corrections and prevent the goods from arriving to the wrong customer. A lack of holding space has reduced the number of usable cranes used to unload vessels by 50%. The time to discharge and reload vessels took on average 3.6 days prior to the pandemic but that number has now doubled, leading to more idle time for ships. Overall ports are facing a 30% increase in volume and have 28% less workforce to combat this jump in demand. The port authorities of southern California have announced that they will begin charging $100/day/container that sits in the port for more than 9 days. Other news around the port, US Ports Are All Full According to Maersk & LA Ports to Charge Carriers For Excessive Dwell Times at Terminals.
Big Box Retailers Look to Take Control of Their Warehouse Space. A growing number of retailers are looking to move from leasing to owning as they determine the long-run costs of meeting eCommerce demand. The 25 largest retailers in the US acquired more than 38M rentable ft²this year, compared to the 18.8M ft² last year. Additionally, industrial sector real estate values have risen 39% since last year that is typically a 30 to 50-year investment. Elsewhere, FedEx and Home Depot Look to Build Massive Distribution Centers in Rosemount & Target Rolls Out More Same Day Fulfillment Ahead of Holiday Blitz.
How Supply Chains Can Deliver Net Zero Emissions. According to BCG, global supply chains account for as much as 80% of total emissions. Expanding further, BCG believes that approximately $100T of investments need to be made in order to deliver emission-neutral supply chains, of which 25-50% will need to be directed towards SMEs. Meeting emission targets will require brands to rethink product design and develop better data structures that enable transparent and consistent data across the supply chain. In order to take effective action, participation from various players is required including policymakers and lenders to ensure incentives are aligned with sustainable practices. Other news regarding supply chain emissions, Philips to Take Climate Action to Address Supply Chain Emissions.
Larry Fink Suggests the Next 1K Unicorns Will be in Climate Tech. Black Rockâs chairman and CEO also inferred that the world bank and the international monetary fund are paramount in steps to sustainability and net zero emissions. Their roles in ensuring that capital can be adequately assessed or allocated into sustainability in developing nations and emerging markets Moreover, Fink shared that he believes that the next industry titans will be âbusinesses developing green hydrogen, green agriculture, green steel and green cement,.â This will require a new perspective on how to create necessary materials and setting requirements in supply chains. For more on this subject, Larry Fink at Saudi Green Initiative & Gates Believes There Will be 8-10 âTeslasâ.Â
Amazon & Appleâs Sophisticated Supply Chains Still Not Bullet Proof. Both of the giants have sent warnings of supply chain disruptions and labor shortages that could impact holiday gifting. Amazon intends to deploy an additional $4B to increase wages of open roles and lure in roughly 150K temporary holiday workers. This includes warehouse jobs starting at $18 per hour and $3K signing bonuses for new employees. Tim Cook shared that Apple lost an estimated $6B during the pandemic due to disruptions despite boosting 29% growth in net revenues. Apple has looked to leverage manufacturing to help reduce production times and procure more chips in an attempt to appease waiting customers. Apple holds approximately $200B in cash reserves to cover high costs in sourcing and logistics but the same cannot be said for all. Elsewhere, Consumer Spending Matched With Wage Increases Bring Inflation Presence & Instacart and Dollar Tree Join Force for 1 Hour Delivery.Â
OEMs in Mexico to Profit From New Rail-Linked Vehicle Distribution Center. A new rail-linked vehicle distribution center located in the Bajio region contains the largest concentration of vehicle manufacturing in the country. The five major OEMs set to benefit the most include GM, Honda, Mazda, Toyota and VW. The terminal is initially set to hold several thousand vehicles but will grow to 10K units as needed. Fully built out, the facility could handle the throughput of greater than 200K vehicles per year. The new rail link will help automakers get access to more empty rail cars and move finished vehicles to customers quicker and more cost-effectively. This will additionally make it easier to access materials as the facility will improve access to important markets such as Guadalajara, Leon and Queretaro. In other automaker news, Global Chip Shortage âIs Far From Overâ as Wait Times Get Longer.Â
Mobility đ
Tesla Hits $1T Market Cap For the First Time After Hertz Says it Will Buy 100,000 Electric Vehicles. Over a year ago, the car rental company filed for bankruptcy protection as COVID undoubtedly reduced travel and rental demand The deal will bring Tesla a reported $4.2B in revenue and is the largest bulk purchase of EVs to date. Tesla joins the likes of other tech giants who have passed the $1T mark
which include Apple, Amazon, Alphabet, Facebook and Microsoft. Hertz indicated that the cars would be delivered by the end of 2022 as part of its plan to build the biggest EV rental fleet in North America. In related news, Analysis: Volkswagen Gets Reality Check After Tesla's Week Of Milestones and Toyota Fixes Teslaâs âyokeâ Steering Wheel In Its First Electric Suv With Steer-By-Wire System.
VW Q3 Earnings Impacted By Massive Semiconductor Shortage â Nine-Month Performance Up On the Prior Year. Q3 deliveries may have suffered significantly but, in VWâs defense, overall performance in the first nine months of 2021 improved on the prior-year period. VW CFO Alexander Seitz credits fixed cost reductions and intelligent, results-oriented sales management as the catalyst behind the positive results. Demand for EVs also remains strong as orders reached historically high levels in Q3. The German car manufacturer also shared its chip shortage outlook for the remainder of the year. Spoiler alert: expect the capacity crunch to last well into next year. For more on VW, consider reading Volkswagen Is Pumping The Brakes On Its Plans For Porsche and VW To Cut Jobs And Overhaul Main Plant In Face Of Tesla Challenge.
Drivers Are Interested in Electric Cars. Dealers Donât Know How to Sell Them. Pew Research reports that roughly 40% of Americans say theyâre somewhat likely to buy an EV while Consumer Reports puts that number around 70%. The % points may differ but one thing's for certain: actual sales of EVs account for less than 2% of the market today. Selling an EV can take three to four times as long as selling an internal combustion vehicle. Dealers need to educate consumers, many of whom fall victim to misinformation, on the benefits and incentives that accompany purchasing an EV. In related news, GM to Tap Dealer Network to Install 40,000 EV Chargers
EV Repair Costs Fall Below That of Gas-Powered Vehicles, Study Finds. According to the Deepview True Cost data report, EV owners spend an average of $77 on maintenance in their first 3 years of ownership compared to an average $228 spent by ICE vehicle owners. Repair costs are lower because they have fewer parts than its counterpart. The study also shows that itâs getting more expensive to maintain vehicles. Manufacturers are paying more because of a spike in labor charges which rose from $168 per 2016 vehicle to $199 per 2018 vehicle. In repair and recall news, GM Will Start Making Chevy Bolts Again On November 1st and Amid A Computer Chip And Car Parts Shortage, Gm Third-Quarter Profits Plummet 40%.
Detroit's Chip Woes Drag on US Economic Growth. GDP growth slowed to the weakest pace in more than a year in Q3 at just 2% annualized, which is less than a third of the growth rate in Q2. The biggest soft spot, even considering the cap on consumer spending in Q3, was the car industry which actually subtracted 2.4 % points from growth. US motor production has fallen in six of the last nine months with levels running similarly to that of a recession. Septemberâs run rate of 7.51M vehicle assemblies was the lowest since 2010 when the industry attempted to recover from the financial crisis. In related news, Facing Urgent Demands, Bosch Adds Capacity for Chips.
Meet The Sustainable Traveler Of Tomorrow. In a BCG survey of over 3,000 people, 70% of respondents said that over the last year and half, theyâve become more concerned about addressing environmental challenges they face. The results also reveal that access to potential green travel options is seen as the toughest challenge for travelers to make better decisions. The travel industry, which accounts for 8% of global greenhouse gas emissions, has to figure out an objective way to measure sustainability across travel products. On the topic of sustainable travel, consider reading Factbox: Electric-Vehicle Batteries: Major Players And Their Expansion Plans.
Autonomous Boats Seem More Solvable Than Autonomous Cars. If thereâs one thing autonomous automakers are discovering, it's that the real world is a complex place for full autonomy. AVs thrive in environments with lots of predictability and structure which is why MIT has turned its focus on developing autonomous boats. The Roboat, nicknamed âLucyâ, is battery-powered and uses lidar to navigate throughout the canals of Amsterdam. Canals form ideal conditions for autonomy due to the relatively slow travel speeds and low variability in lane markings. In similar news, This Camera System Is Better Than Lidar For Depth Perception.
Fundraises and M&A đ¸
Voxel Raises $3M Led By MTech Capital. Voxel uses computer vision and AI to enable security cameras to automatically identify hazards and high-risk activities in real-time.Â
Vendease Raises $3.2M Led By Global Founders Capital. Vendease is a marketplace that lets restaurants in Africa, order directly from farms and food manufacturers. Additional investors include Y Combinator, Hustle Fund, Liquid 2 Ventures, Hack VC and Soma Capital.
Foodology Raise $15M Led By a16z and Base Partners. Foodology creates and operates digital restaurant brands made for delivery. Existing investors Kayyak Ventures and Jaguar Ventures (now Wollef) joined in as did a group of angel investors.Â
Autofleet Raises $20M Led By Keyframe Capital. Autofleet enables fleet owners and operators to improve the customer experience, optimize fleet efficiency and boost profitability in their existing business models while also enabling them to deploy those very same assets into on-demand mobility services for ride hailing/pooling, and âlast mileâ package delivery. Additional new investors include Fujitsu and Goodyear.Â
Tactile Raises $27M Led By Delek Motors. Tactile Mobility provides smart and autonomous vehicles (AVs) with tactility-sensing innovation that empowers multiple data solutions. Other noteworthy investors include Goodyear Ventures and Porsche Ventures.
VavaCars Raises $50M Led By Duquesne Family Office LLC. VavaCars is an online used car transaction platform with a geographic focus on Turkey and Pakistan. In the future, VavaCars intends to expand into new markets leveraging the fuel station networks of its founding investor, Vitol.
Logicbroker Raises $135M Led By K1 Investment Management. Logicbroker provides the fastest time to value of any enterprise-level drop ship and eCommerce fulfillment solution. The new funding will go toward adding to its 65-person employee base, the global expansion, and continued product development.Â
Rad Power Bikes Raises $154M Led By Fidelity Management & Research Company. Rad Power Bikes is an electric bike company that offers direct-to-consumer pricing on e-bikes and accessories. Additional investors include Counterpoint Global (Morgan Stanley), Vulcan Capital, Durable Capital Partners LP, and The Rise Fund. The funds will be used primarily to start production in North America and Europe.
Fabric Raises $200M Led By Temasek. Fabric enables retailers to offer same-day delivery at profitable unit economics with a network of micro-fulfillment centers. Additional investors include Koch Disruptive Technologies, Union Tech Ventures, Harel Insurance & Finance, Pontifax Global Food, and Agriculture Technology Fund (Pontifax AgTech), CPP Investments, KSH Capital, Princeville Capital, Wharton Equity Ventures.
Skyryse Raises $200M Led By Fidelity Management & Research Company. Skyryse is an air mobility company on a mission to democratize the sky, by making flying so easy anyone can do it. Additional investors in the round include Monashee Investment Management, ArrowMark Partners, Republic Capital, Raptor Group, Infinite Capital, Embedded Ventures, Fortistar, K3 Ventures, Rosecliff, SV Pacific Ventures, Laurence Tosi, and Dmitry Balyasny. Prior investors Venrock, Eclipse Ventures, and Fontinalis Partners also participated.
ProLogium Gets $326M Led By dGav Capital. Founded in 2006, ProLogium started out as a battery supplier to consumer electronics firms before expanding its offering to electric-car makers. It specializes in so-called lithium solid-state batteries, an innovation that promises to deliver more power while shortening recharging times. Additional investors include Primavera Capital Group and SB China Venture Capital.
SPAC Radar đĄ
NextNav Is Going Public After a SPAC Deal Valuing the Company at $1.2B. NextNav operates a platform intended to offer indoor location services and applications. The public offering follows a deal with Spartacus Acquisition Corporation, which was completed 10/28. NextNav was estimated to make $408M in the deal, which was announced this summer, valuing the company at $1.2B.Â
Who's Hiring? đŠâđť
Head of Customer Support at Vizion in Atlanta, GA (remote ok).
VP Engineering at Milk Moovement in St. Johnâs, Halifax, Canada (remote ok).
Product Designer at Stord in Atlanta, GA (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.
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đ Check out Dynamo's podcast series, The Future of Supply Chain.