Dynamo Dispatch (12/12/2022)

Issue 218 | Amplio, Telegraph, Pactum

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 💭

🗣️ If you haven’t listened to our latest new release from our Future Of Supply Chain podcast, consider checking it out! Santosh sat down with Harry Drajpiuch of Amware to discuss the wide world of fulfillment including challenges in the space, technological advancements, the Amazon impact, and more. 

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

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Supply Chain 📦

🌟Letter From Apple Supplier Foxconn’s Founder Prodded China to Ease Zero-COVID Rules. “In the letter to Chinese leaders, Foxconn Technology Group founder Terry Gou warned that strict COVID controls would threaten China’s central position in global supply chains and demanded more transparency into restrictions on the company’s workers, the people said.” The letter, which was sent a little over a month ago, was in response to the Chinese government banning workers from leaving Foxconn’s Zhengzhou factory creating a chaotic reaction from factory workers.

As Gou noted, the COVID policy has played a big role in pausing production for a variety of industries and a significant drop in Chinese exports. For instance, Apple has seen firsthand the problems associated with the strict policies and has grown frustrated with the delays in iPhone production, so much so that it’s considering leaving the country altogether–a process that will take years to come to fruition. For more on that move, check out Apple Is Ready To Leave China As COVID Protests Delay iPhones Past Christmas. 

To gain greater insight into the implications of the lockdown measures, consider reading, China's Trade Suffers Worst Slump In 2.5 Years As COVID Woes, Feeble Demand Take Toll and Chinese Exports Fall At Steepest Pace In More Than Two Years.

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Back in Stock! Emerging Supply Chain & Logistics Trends And Technology Landscape. “2021 was a record year for venture capital investment in supply chain & logistics technology at $58B in deal value. It’s no surprise that despite a funding downturn, $23B has already been invested in supply chain & logistics technology companies in the first half of 2022, putting this year on track to exceed every prior year other than 2021.” Our friends at Sapphire Ventures took a deep dive into a handful of supply chain trends that investors should capitalize on. Check it out! 

9 Statistics About 3PLs That Brands Should Know. Despite talk of a recession, 48% of 3PL warehouses identified finding and retaining talent as their second largest challenge (only after managing costs). For other ways warehouses are innovating, consider Leased Robots Roll in to Help Logistics Firms Handle Holiday Crush or Logistics Management’s 2022 Supply Chain Disruptions Study. 

UK Sleepwalks Toward Food Crises As Higher Costs Hobble Farmers. Soaring costs of everything from fertilizer to energy are putting massive pressure on growers already squeezed by the effects of the coronavirus pandemic and Brexit, the National Farmers Union warned last Tuesday. For more on European woes, check out Airbus’s Delivery Miss Is Scarier With Recession Looming and How The EU And US Should Overcome Their Trade And Supply-Chain Disputes.

US Straightens Out Supply Chains After Months Of Inflationary Snarls. Throughout the US supply chain, costs continue to fall, easing inflationary pressures despite ongoing COVID concerns in China. The smoothing reflects reduced shipping demand because of slower consumer spending and a contraction in manufacturing activity, while many retailers shipped goods in earlier than usual to avoid repeating last year’s delays. Despite this, Walmart CEO ‘Won’t Feel Great’ About the Quality of This Christmas and More Stores Do Double Duty As Distribution Centers For Online Orders. 

Cellphone Used Identified As The Evergreen Culprit. A recent Coast Guard investigation revealed that cell phone use caused the pilot to run aground in Maryland’s Craighill Channel, this past March. The Ever Forward was not freed until April 17. Other unfortunate news that caught our eye this week was Bloomberg Trade Tracker’s Malaise Deepens Ahead of Holiday Season and Desperate Unified Furniture Customers Can’t Recover Assets Locked In Shuttered Facilities.

Could Mexico Replace China As Top Global Manufacturing Exporter? Nearshoring represents an opportunity of a lifetime for many manufacturers, a topic that we’ve covered at length. “I think executives are starting to rethink that decision of going to China and repositioning their strategy in terms of having dual manufacturing sites,” Rosemary Coates, executive director of The Reshoring Institute, told FreightWaves. For more on international supply chains, consider China’s Surprise COVID Pivot Offers New Hope To Shipping Markets and How Retailers In Europe Can Navigate Rising Inflation. 

Mobility 🚗

🌟Airlines Are Lobbying For A Change To Federal Regulations That Could Put One Pilot In The Cockpit. The regulations are largely in response to the ongoing labor shortage that has been affecting the industry on a global scale. The main concern labor unions have with the change is safety. Pilots are “claiming that [the idea] would diminish a safety discipline and culture that has been responsible for the safest 25 years in commercial aviation in the history of aviation.” The argument is valid considering the number of instances where having two pilots in the cockpit was essential to the safety of the cabin including the Miracle On The Hudson and American Eagle (Envoy) Flight 3556 incident that took place a few weeks ago. Others, like Boeing Co. Southeast Asia President Alexander Feldman, believe the technology is there to support one pilot in the cockpit.

For more on the labor problems plaguing the airline industry, consider reading Major Disruption At Britain’s Biggest Airports As Staff To Strike For Eight Days Over Christmas. For a deeper dive into the topic, check out Airlines Want You To Get Comfortable With Flying Without A Co-Pilot. Pilots—And Fliers—Are Not Convinced.

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Europe, Take Note: France Bans Short-Haul Flights. To push its train network, France has decided to ban short-haul domestic flights for locations where a rail alternative could take less than 2.5 hours. Consider reading Spain's New High-Speed Trains Make It Europe's Rail Capital and The Amazing New Swiss Mountain Train That Can Jump Rail Tracks.

EV Transition Threatened As Battery Prices Rise For First Time. Since the 12 years Bloomberg has been tracking battery prices, the global average price of lithium-ion battery packs rose to $151 per kilowatt-hour, up 7%. Forecasts predict that rising costs for similar metal batteries will maintain prices around $152/kWh and shouldn’t drop until 2024. To learn more about the state of EV prices, consider reading Automakers Like Ford And GM Are Scrambling To Make EVs Cheaper As Battery Prices Rise For The First Time In Years and Where Can You Buy The Cheapest Tesla Model Y.

China Delivers First Homegrown Plane To Take On Boeing, Airbus. China Eastern Airline Corp. was able to deliver a single-aisle plane, competitive with Airbus and Boeing, at Pudong International Airport in Shanghai. Consider checking out China’s New High-Altitude, High-Speed Demonstrator Drone Makes First Flight.

Automakers, South Korea Implore US To Use Commercial EV Tax Credit. This is an effort to combat the $430B US Inflation Reduction Act that cut $7.5K consumer tax credits for EVs manufactured outside of North America. The South Korean government also asked the US Treasury to not impose budget restrictions through 2025 on commercial vehicle tax credits completely. Learn more about EV budget restrictions by reading Here Are The Cars Eligible For The $7.K EV Tax Credit In The Inflation Reduction Act and US Allies Fuming Over Tax Credits For EVs.

Uber Launches Robotaxis But Driverless Fleet Is ‘Long Time’ Away. A 10-year joint venture deal with Hyundai and Aptiv, will now pair all 5 of Motional’s all-electric IONIQ robotaxis. Implementation will begin with driverless food delivery on the Uber Eats platform in the Santa Monica area next May. To learn more about Uber’s EV push, read To Reach Zero-Emission Goal, Uber Urges Drivers To Purchase EVs.

EV Battery Workers Push For Union In Fight For Industry’s Future. The United Auto Workers, UAW, has plans to raise the $16 wage of Ultum workers to be on par with those in the parts industry of nearly $32.  There are an estimated nearly 135K workers, both union and non-union jobs, that could potentially be lost with the EV race; UAW aims to combat this with improved wages and work conditions. Learn more about EV unionization by checking out GM Battery Plant Workers Vote To Unionize With UAW, A Key Win For Labor As Industry Shifts To EVs And Workers At EV Battery Plant In Ohio Vote To Unionize.

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Fundraises and M&A 💸

Speiz Raises $1.3M In Seed Funding.  The Norwegian prop-tech startup built a platform that enables revenue generation for companies through the renting of warehousing space. F-LOG Ventures led the round with participation from Iron Wolf Capital and Angel Fund. The funds will go towards market expansion throughout the EU.

ANGOKA Raises $2.9M In Seed Funding. ANGOKA is an IoT security company focused on protecting machine-to-machine communications for smart Cities and mobility. 24Haymarket led the round with participation from GALLOS and Co-Investment Fund. The firm will use the investment to fuel international growth plans, accelerate the design and delivery of bespoke cyber security programs, and expand the team.

Amplio Raises $6M In Seed Funding. Amplio has built a platform that improves the electronic component sourcing process that allows companies to predict future component shortages, automate risk purchases, and access exclusive sources of alternative supply. Construct Capital led the round with participation from Slow Ventures, High Alpha Capital, Flexport Ventures, Alpaca Venture Capital, and various industry angels. A portion of the funding will go towards team expansion.

HarborLab Raises $6.4M In Seed Funding. Harbor Lab provides software for ship owners, management companies, and charterers’ internal disbursement departments.  VentureFriends and Speedinvest led the round, with participation from additional investors including The Dock, Signal Ocean, Motion Ventures, TecPier, Innoport, and Charge VC. The funding will go towards furthering platform development.

Telegraph Raises $10M In Series A Funding. Hailing from Chicago, Telegraph is a leader in cloud-based operating systems for railroads, shippers, logistics service providers, and railcar leasing companies. Crosslink Capital led the round with participation from Slow Ventures, 9 Yards Capital, Motivate Venture Capital, and Extra Credit Ventures, as well as returning investors Construct Capital, 8VC, and BoxGroup. A bulk of the funding will go towards team expansion. 

Maergo Raises $20M In Seed Funding. Maergo has developed a platform to manage (and fill) excess capacity on commercial aircraft with parcels. Deep Lake Capital, ACR Strategic Credit, and RyderVentures all participated in the round. The use of funds is currently unknown.

Pactum Raises $20M In Funding. Pactum AI helps companies automatically negotiate contracts with suppliers at scale. 3VC led the round with participation from Maersk Growth, NordicNinja VC, Atomico, Project A, Metaplanet, and Taavet+Sten. Funding will go towards market expansion within both the US and EU and accelerate investment in product capabilities. 

Onomotion Raises $22M In Seed Funding. The Berlin-based startup builds cargo eBikes with a built-in cover from the elements and attachable containers. The $22M raised is a combination of equity ($6.3M) and debt ($15.7M). “The equity comes from Proeza Ventures, Zu na mi GmbH, the European Innovation Council, and existing investors; and the debt, in the form of a bond, is operated by GLS Bank.” The funding will go towards expanding into new cities in Germany.

GoBolt Closes $75M In Series C Funding. The Toronto-based startup facilitates the pickup, storage, and return of customer belongings on schedule. Yaletown Ventures and Export Development Canada led the round with participation from BDC Capital, Whitecap Venture Partners, MIG Group, Northleaf Capital Partners, BMO Capital Partners, and Ingka Group. The funding will be used to grow further into existing markets, as well as make investments in sustainability, such as increasing its internal fleet of EVs and charging infrastructure.

Oda Raises $151M In Funding. The Norway-based qComm startup is a delivery provider for grocery items. Kinnevik, Verdane, and Summa Equity participated in the round. The latest round will see the startup’s valuation drop to $368M post-money after hitting unicorn status last year.

Einride Raises $500M In Funding. Einride is a Swedish electric self-driving truck start-up. Barclays Europe, EQT, and Northzone all participated in the round. The funding, which is composed of debt, equity, and conversion of earlier loans, will go towards both market and customer expansion. 

Getir Set To Announce The Acquisition Of Gorillas. Last September, Gorillas was valued at $3B but, after a turbulent year full of layoffs and market fluctuation, the qComm provider is waving the white flag. The all-stock deal will also see Gorillas investors inject a further $100M into Getir. Word on the street has it that Turkey-based Getir wanted to get ahold of Gorillas’ network of dark stores, which was the primary motivation behind the purchase.

Business Building 🛠️

The State Of European VC. Another year, another great report from the folks at Atomico, et al. We were asked by some journalists to offer thoughts on the slowdown in supply chain funding the underlying data suggests. Reviewing Pitchbook figures, we note that if one strips out quick commerce funding in 2021 and 2022, funding growth is in line with the broader venture market.

Don’t Optimize Downtime. TLDR- optimizing your downtime won’t give your mind, body, and spirit the rest it needs.

Building Documentation For Startups. We’d note that documentation isn’t just for engineering teams but for the whole business. We generally document every process that’s done more than once a year at Dynamo. June/July and December also happens to be when we revisit everything and do our iterations.

Who's Hiring? 👩‍💻

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

Account Executive, Logistics at Stord in Atlanta, GA (remote ok).

Senior/ Middle Backend Engineer at rouvia in Berlin, GA.

Pre-Sales Engineer at Milk Moovement in Toronto, Canada (remote ok).

Random Statistic Of The Week 📈

Despite a strong start to the year, US imports are forecasted to experience a 13.8% y/y dip in April 2023. More from JOC:

“Imports in December are forecast to decline 7.2% from December 2021, up from the 9% decline forecast in the November GPT. Imports in January are now expected to drop 8.8% from January 2022, compared with the previous forecast of an 8.4% decline. February’s imports are forecast to plunge 20.9% y/y compared with the previous estimate of 19.1%, while imports in March are now expected to fall 18.6%, compared with the previous estimate of a 15.1% drop.”