Dynamo Dispatch (11/07/22)

Issue 214 | PaintJet, Goodship, AMP Robotics

Dynamo Dispatch. A 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 💭

🎨 We’ve been keeping this a secret for quite some time now but the cat is finally out of the bag. We’re pleased to announce our recent investment in the PaintJet, located right up the road from us in Music City, USA (aka Nashville or Nashvegas). We’re excited to be on the ride with Nick, Steve, and the rest of the team! 

🚂 In other news, Chattanooga was popping off this week. Shoutout to FreightWaves for putting on a great conference showcasing the tech sweeping across supply chains. If we didn’t get a chance to connect but would like to chat, shoot an email over to Clay (clay@dynamo.vc).

🥰 Love reading the Dispatch? Be sure to forward it to a few colleagues that may find it interesting and share it on social media for some extra brownie points.

We Are Dynamo,

Clay, Santosh, Jon, and the rest of the Dynamo team

Note: please add “dynamo@substack.com” to your email client, so you don’t miss future issues due to aggressive spam filters.

Supply Chain 📦

⭐ US Manufacturers Excited About Reshoring. Reshoring, a concept that has long been tossed around yet barely acted upon, has US manufacturers jazzed up, according to Deloitte’s latest Future of Freight report. According to the report, 62% of manufacturers surveyed have started reshoring or nearshoring production capacities. “This reshoring, nearshoring, whatever they’re calling it this week is real, and we’re pumped up about it,” said Jim Hoffman, the CEO of Reliance Steel & Aluminum Co.

There’s a lot more at stake here than just a cost component. For many industries, such as semiconductors or pharmaceuticals, the decision to move production stateside is a matter of national security. China has been the front and center of production for a multitude of companies across a multitude of industries. And thanks to COVID, the vulnerabilities of placing all the marbles in one basket were brought to light. If you want to read more, check out Supply Chain Woes Accelerate Reshoring, Nearshoring Trend. For a more in-depth analysis of the trend that is sweeping across the industry, consider reading a piece that our very own Clay Katzman wrote, A Deep Dive Into Regionalization And The Implications It Has On VC.

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Diesel Market Price Volatility Makes For The Perfect Storm. The price of diesel, a major cost input for fleet, is facing significant challenges, caused by dwindling reserves and a drought along the Mississippi river. "The national average price for diesel today is $5.30 per gallon and is expected to go up 15 to 20 cents in the next few weeks," said Andy Lipow, president of Lipow Oil Associates, LLC. For more, consider reading Four Reasons Why The US Is Grappling With A Diesel Shortage. Across the pond, Rising Energy Costs Are Also Painting A Grim Picture For Major Industrials. 

Climate Change Inflicts Strain On Dairy Cows, Disrupting Supply Chains. Volumes of dairy are forecasted to sink by nearly 500K metric tons this year in major exporter Australia, as farmers exit the industry after years of pressure from heat waves. For more on how climate change is affecting supply chains, Wells Are Running Dry In Drought-Weary Southwest As Foreign-Owned Farms Guzzle Water To Feed Cattle Overseas and Decade-Low Water Levels On Mississippi River Slow Barges, Disrupt Food Supply Chain. 

UPS Rolls Out Logistics-As-A-Service to Diversify Revenue Streams. On its earnings call this week, UPS CEO Carol Tome announced the company’s future plans for logistics as a service, combining with UPS’s current digital capabilities. “When we combine logistics-as-a-service with our integrated physical network, we believe we will be unstoppable,” Tomé said. In Europe, Logistics Player AP Moller Maersk Also Reported Good News On Its Earnings Call, With Record Q3 Results. 

Freight Investment Bubble Might Lead To Cargo Jet Oversupply. Even as the cargo market slows down, the supply of freighter aircraft continues to grow, raising questions about the capacity needs of operators. For further reading, Air Cargo Market Continues To Deflate Under Global Economic Pressures.

Flexport Plans 2023 Engineering Hiring Spree. Amongst a plethora of tech sector layoffs, Flexport stands as a modicum of light, announcing this week that it plans to double its engineering team to 400, starting next year. Flexport raised $935M this year, led by venture capital firms Andreessen Horowitz and MSD Partners, at a valuation of $8B. It expects revenue of close to $5B this year. Elsewhere in the logistics tech market, Project44 Has Announced It’s Delaying Its IPO.

Mobility 🚗

⭐EV Metal Supply Chain Faces a 30-Mile Bottleneck in Africa. Exporters are rushing to meet the demand for Congolese copper which travels 1.9K miles from Congolese mines to Zambia. The region has accounted for more than 80% of global copper output growth over the past three years. If you want to learn more about the importance of copper in batteries, check out this podcast. 

The timeliness of this shortage is a good time to bring attention to the hurdle that lay in the way for EV mass adoption. Demand has shot up over the years–so much so that industry experts question whether supply can meet said demand in the years to come (just ask the CEO of Stellantis). Aside from copper, crucial materials like graphite are in short supply as well. “The US is presently 100% import-dependent for its graphite needs,” said Anthony Huston, CEO of Graphite One. “And really, when you boil it down, the US has not mined any graphite for more than 30 years.” For context, graphite makes up about 50% of batteries today. Need to brush up on your battery basics? Check out What Materials Are Used To Make EV Batteries? 

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TuSimple Fires Ceo Xiaodi Hou Amid Federal Probes. This comes following a probe by the FBI and SEC into whether TuSimple improperly financed and transferred technology to Hydron. This has caused TuSimple’s stock to plummet by more than 45% this past Monday, while shares in the company are down over 90% for the entirety of 2022. To learn more about TuSimple and its future, consider reading Why TuSimple Stock Crashed And Burned Today and TuSimple Expects To Quickly Fill CEO Post After Firing Co-Founder.

Tesla Price Cuts Are Resulting In Cancellations For China EV Brands. Price cuts to the Model 3 and Model Y have resulted in dropping Tesla output out of its Shanghai Gigafactory to 71K cars, down 83K from September’s numbers. To read more about Tesla’s relationship with China, consider Tesla Closes Retail Showroom In China Over Strategy Shift and Who’s Really At The Wheel Of Tesla In China?

Ford Doubled Its EV Sales By Tripling Its EV Model Lineup. This has resulted in orders for 2023 models up 134%, while October vehicle sales are down 10%. In fact, over 52K orders were placed for the new 2023 Ford Super Duty EV in just 5 days, pushing the constraints on vehicle production. For more on Ford, consider reading Ford To Drop Fiesta, Bring Forward EV Launch and Dealers Push Back On Ford EV Mandates.

VW Develops Hydrogen Car That Can Travel 2K Kilometers On One Tank. The technology is based upon a patent-pending fuel cell that converts hydrogen into energy for its electric motor, which came to fruition under a partnership with German company Kraftwerk Tubes. Want to read more? Check out VW Unveils The Jetta Gli Performance Concept and VW Tells Brands To Pause Paid Advertising On Twitter for more on Volkswagen’s innovation.

Einride Establishes Charging Station Network And Unveils Next-Gen Autonomous Electric Truck. Einride charging stations will be placed near the Port of LA that should support universal fleet charging infrastructure. Get the rest of the information regarding Einride’s November press release by reading Einride's November Release Event and Einride Completes Autonomous EV Pilot With GE Appliances.

Saudi Arabia to Build EVs With Apple Supplier Foxconn. Foxconn and the Public Investment fund created a joint venture known as Ceer, which will develop EV sedans and sports-utility vehicles. Launching its first cars in 2025, Crown Prince Mohammed bin Salman of Saudi Arabia hopes Ceer will aid in diversifying its economy away from oil. Learn more by reading The World’s Largest Oil Exporting Nation Targets 150K EV Exports By 2026.

Fundraises and M&A 💸

💥PaintJet Raises $3.5M In Seed Funding. PaintJet paints the exterior surfaces of commercial and industrial buildings using robotics. We led the round that also saw participation from the folks at MetaProp, Builders VC, and Pathbreaker Ventures. The funds will go towards hiring and product development.

WiseTech Global Acquires Shipamax. Wisetech, the developer of CargoWise, acquired Shipamax, a provider of data entry automation, in a deal that’ll see the data product scaled across WiseTech’s customer base. The details of the acquisition remain unknown at this time.

Grip Raises $2M In Pre-seed Funding. Grip has built a platform that vastly improves the perishable shipping process. Soma Capital, Western Tech Group, and an individual group of investors participated in the round. The fresh capital will go towards team expansion.

Goodship Raises $2.4M In Seed Funding. Hailing from Seattle, Goodship sells analytics software to shippers to improve the freight procurement process. The round was led by Fuse, with participation from Cercano Management, Flexport Fund, Innovation Endeavors, Sope Creek Capital, and other angel investors.

Solvo.ai Raises $4M In Seed Funding. Solvo.ai provides a human-influenced automated decision-making platform that helps logistics firms. Speedinvest and Frontline Ventures co-led the round. The fresh funds will go towards scaling the commercialization of their first product. 

Invygo Raises $10M In Series A Funding. Invygo offers a variety of car rental services from short-term rentals (1-9 months) to long-term rentals that can last up to 3 years. The round was led by MEVP and saw participation from Al Rajhi Partners, Arab Bank’s AB Ventures, Amana Capital, and Palm Drive Capital. The capital will go towards scaling the service across the UAE and Saudi Arabia.

Smartex Raises $24.7M In Series A Funding. Smartex is on a mission to bring smart tech to the fabric manufacturing industry. Lightspeed VP and Build Collective co-led the round. The funds will be put towards expanding the business geographically and growing the team headcount.

Dropit Raises $25M In Series C Funding. The London-based startup is “a retail technology platform that bridges the digital divide by unifying merchants’ online and in-store inventories.” Vault Investments led the round with participation from Tiga Investments, Axentia, Sugarbee, and others. The capital is going towards expanding across a variety of markets in the US.

Loop Raises $30M In Series A Funding. “Between 20% and 30% of all invoices today contain some form of exception or error” and Loop has set out to solve these inefficiencies. In actuality, $6M of the $30M raised was from an unannounced seed round; both rounds were led by Founders Fund. The capital raised will go towards scaling the business.

Xeal Energy Raises $40M In Funding. Based out of sunny LA, Xeal provinces EV charging solutions. Keyframe Capital led the round with participation from ArcTern Ventures, Moderne Ventures, Ramez Naam, Nexus Labs, Wind Ventures, and Alpaca VC. The fresh funds will go towards product development and enhancing the deployment of charging stations among other priorities.

Mobility House Raises ~$50M In Series C Funding. Mobility House specializes in smart charging and offers a Charging-as-a-Service model. Mercuria led the round with Ventura Capital and Green Gateway Fund participating as co-leads. The funds will be contributed towards market expansion.

project44 Raises $80M In Funding. We’re pretty sure most people in the supply chain industry know who p44 is but for those who don’t: p44 “operates the world’s most trusted neutral end-to-end visibility platform that tracks more than 1B unique shipments annually.” The round was led by Generation Investment Management. The funds will go towards accelerating supply chain connectivity across the supply chain ecosystem and product development.

AMP Robotics Raises $91M In Series C Funding. AMP is a “pioneer in artificial intelligence (AI), robotics, and infrastructure for the waste and recycling industry.” Congruent Ventures and Willington Management led the round. The infused funds will support the scaling of waste infrastructure.

Bright Machines $132M In Funding. Bright Machines built a platform that enables consistent production operations using microfactories. Eclipse Ventures led the equity portion of the round after plans for a SPAC collapsed last year. The capital will go towards accelerating its infrastructure rollout.

Volocopter Raises $182M In Series E Funding. The German startup is building electric vertical takeoff and landing vehicles (eVTOL). The funds will go towards prepping the urban air mobility ecosystem for future operations. Neom led the round alongside GLy Capital Management of Hong Kong. 

Business Building 🛠️

On Quitting. It’s difficult for driven, ambitious, and persistent individuals to know when to stop doing something that isn’t working (whether it’s outright or a pivot). The psychology of it is fascinating given we aren’t naturally wired to give up.

Battery Ventures: OpenCloud 2022. As a laggard in terms of digital adoption, general industry trends around adoption and decision-making in the cloud are worth staying on top of as supply chain people.

Sales Efficiency Through COVID. “During the first half of Covid, sales & marketing teams iterated to improve sales efficiency. Hiring stopped. Buyers paused their purchasing until a new equilibrium had been established, perhaps concurrent with viable vaccines. With newfound confidence on both sides of the virtual sales table, transactions occurred. Teams hired & spent aggressively, given the capital market's insatiable appetite for growth. Today, the macroeconomic uncertainty & the Fed’s interest rate policy to slow the US economy have lengthened sales processes across larger & likely overstaffed sales teams. The resulting pipeline shocks tanked efficiency.”

Who's Hiring? 👩‍💻

Be sure to check out our Career page on our website for more job opportunities that have opened up at some of our portfolio companies!

Systems Engineering Manager at Plus One Robotics in San Antonio, TX.

Senior Support Engineer (API) at VIZION in Atlanta, GA (remote ok).

Senior Backend Engineer at Amitruck in Nairobi, Kenya.

Random Statistic Of The Week 📈

We had to give the PaintJet team some more love so this week’s random statistic pays homage to the problem that our friends from Nashville are tackling. 

“The US currently needs more than 100K painters to meet demand, and that will only continue to worsen with more than 41% of painters in the workforce expected to retire by 2031. Corrosion currently costs the US 3% of its GDP, and 80% of painting/corrosion prevention costs are due to labor.”