Dynamo Dispatch (12/16/19)

Issue 88 | Manna, Bluespace, FoodMaven

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 💭

The last full week of the year which means that we only have one more Dispatch left in 2019. True to form, we’re finishing the year with a flurry of activity - meet Manna the newest member of our family.

We Are Dynamo,

Santosh, Ted, Barry, and Jon

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

Supply Chain 📦

Market Expected to Absorb Loss of Celadon Capacity. Celadon had about 3,300 trucks and 3,800 employees at the time of Monday’s bankruptcy filing and an estimated $611M in revenue so far this year. Although one of the largest TL carriers in North America, the company represents a small share of the $300B TL market. The shutdown is projected to have minimal impact on capacity, as demand has already retreated sharply since 2018. We wish the best for truckers trying to find their ways home. Check out the FreightWave’s Job Board for impacted Celadon employees.

Airport Logistics and the Concurrent Planning Behind Baggage Handling. Airports handle about 2B bags a year and more than 20M are mishandled. This mishandling of bags costs airlines billions of dollars annually. This piece explains how airports have begun to minimize this with concurrent tracking, automated check-ins, and RFID data consistency. Namely, Resolution 753, introduced in 2018, is a standard requiring baggage to be tracked through four key points (passenger check-in, loading to the aircraft, delivery to the transfer area, and the arrival point) in order to improve visibility and increase accuracy. We hope it serves you well and you don’t end up as one of the 0.6% of misplaced bags during your holiday travels.

🌟Amazon Is Already Delivering Half of Its Packages. Based on parcel data from roughly 70,000 Amazon transactions, Morgan Stanley projects Amazon Logistics’ parcel volume will reach 65% of total U.S. Amazon orders by 2022. This is up 19% from today’s expected volume. FedEx and UPS are still pushing higher volumes at 3B and 4.7B, respectively, but at the current speed of growth, Amazon Logistics will overtake the legacy players in 2022. In other Amazon-related news, Amazon's Massive Investment in Food Delivery Startup Deliveroo Hits a Major Roadblock and Amazon Warehouse Workers Say They’re Doing “Back-Breaking” Work.

📊The Future of Parcel Delivery: Drones and Disruption. By 2025, parcels will equal mail in volume. This McKinsey report delves into the technologies that will step up to bat to handle our increasingly onerous delivery requirements and rapidly rising parcel volumes.  The commenters discuss drones, droids, and even mobile parcel lockers mounted on top of autonomous vehicles. Second in command of SF Express Eddie Huang said he believes that 12-hour delivery will be a standardized service for most of the customers in China’s 600 cities within the next five years. Following up to note that it is a “conservative assumption.” In 2020, SF Express will be opening a new hub airport in central China with 100 aircraft flying from everywhere to this hub.

The Myth of Free Shipping. Through the eyes of impacted Etsy merchants, demand for free shipping might be the thing that breaks mom-and-pop retail for good. Amazon’s normalization of free shipping has molded customer expectations to want goods “where, when, and how” they want, trading charm of a product for cost. Independent operators are ultimately paying the economic price with small store revenue to dropping as much as 40%.

Warehouse Employment Stalled in 2019. Why? Over the last several years, trucking carriers have sometimes struggled to find qualified drivers and grow their fleets. On the other hand, warehousing employment has exploded growing by an 8% compound annual growth rate from 2011 to 2018. However, growth has finally tailed off this year to a casual 2.7%. Attributing factors include tighter labor markets, stricter requirements for picking and packing accuracy, and the progression of warehouse automation technology. There were 2,500 robotic-powered warehouses in the US in 2018, and this number is expected to increase to 23,000 by 2025. Thereby, we should soon see a decoupling of warehouse volumes and employment levels as automation drives output. On the robotics front, Nordstrom Partners with Attabotics and Tompkins Robotics while Alberstons Embraces Automated Microwarehouses.

Ahold Delhaize to Invest $480M in U.S. Supply Chain. This investment supports the company’s new three-year strategy to move the US supply chain into a fully integrated, self-distribution model. In making a few facility acquisitions from C&S Wholesale Grocers,  Ahold hopes to improve speed to shelf, enhance relationships with vendors, and improve product availability and freshness for customers. Additionally, the plan includes an investment in two new fully automated frozen facilities. ICYMI, Walmart Partners with Nuro for Store to Customer Delivery

J.B. Hunt and JDA to Join Broker-TMS Integration Trend. Virtually every developer of digital freight brokerage products has partnered with at least one TMS provider over the past year. The J.B. Hunt 360 integration mirrors this year’s activities from Loadsmart with Oracle, Convoy with BluJay, and Uber Freight with both SAP and MercuryGate. Shippers don’t necessarily want to move outside of their core planning and execution systems to find available capacity, rather, they would prefer new sources of capacity be presented to them alongside their contract carriers and existing broker relationships in a common workflow. Elsewhere in trucking, Plus.Ai Autonomous Truck Completes Coast-To-Coast Delivery in 3 Days and SAP Partners with project44 on Visibility Data.

Mobility 🚗

Ford Quantum Computing Experiment Cuts Traffic. Through a partnership with Microsoft, Ford tested a traffic-routing algorithm that cut Seattle traffic by 73% and shortened commuting times by 8% in a simulation of 5,000 cars. In the Seattle simulation, Ford pitted a conventional "selfish" routing system, in which each car calculated its own best route on its own, against a new "balanced" traffic routing system that took all the cars' plans into account. The article title is a bit misleading though, as the project involved “quantum-inspired” tech, not an actual quantum computer. Related, Volkswagen Employs Quantum Computing to Help Optimize Traffic Routing.

🌟Hyundai Commits $17B to Add Electric, Driverless Cars. Announcing its strategic plan to 2025, Hyundai pledged to spend almost half the new money on electrification, while 8% will be allocated to autonomous driving. The company’s goal is to double down on technology to increase its market share from 4% to 5% over the next 5 years. German automakers are set to spend $45B on electrification over the next 3 years, while GM is planning to offer 20 different electric models by 2023. More on EVs, Chinese Consumers More Open to Ev, Autonomous Cars Than Westerners and 8 lessons about EV battery health from 6,300 electric cars.

📊The Full NTSB Report on the Tempe, Arizona AV Crash. The report makes 6 clear recommendations to Uber and the state of Arizona including an additional application for testing of ADS-equipped vehicles, establishing a task group of experts to evaluate these applications, and the implementation of a safety management system that outlines safety policy, assurance, and risk management. Also published in the report, were the toxicology findings that determined Herzberg had methamphetamine and marijuana in her system. Additionally, the driver was paying little attention to the road, having spent about a third of the trip looking down at her phone. Speaking of ADS safety, NHTSA Looking into 12th Tesla Crash Possibly Linked to Autopilot and Resolving Edge Cases in ADAS & Autonomous Driving.

Mercedes-Benz and Bosch Launch Robocar Ride-Hailing Pilot in San Jose. Daimler Mobility has developed an app and service to pick riders up in Mercedes S-Class robo-taxis with a safety driver on board. While Mercedes is providing the vehicles, Bosch is manufacturing the components that enable autonomous urban driving. The duo will allow and assist potential ridehailing partners with the integration of these driverless Mercedes vehicles into their existing service line. Also, Waymo Celebrates One Year Anniversary of Self-Driving Car Service.

Seattle Joins the Rush to Slow down Traffic on City Streets. With the population up 2.1% Y/Y, Seattle is the second-fastest-growing large city in the US, and city officials are trying to deal with the increased number of people on the roads. Following similar practices in Boston, NY, and Philadelphia, Seattle plans to lower the speed limit on major roads to 25 mph to improve safety. According to the World Health Organization, lowering speed limits by just 5% reduces the number of deadly car crashes by 30%. Did you see? Kansas City Is First Major City in America to Offer Free Public Transportation.

Wheels Redesigns Shareable E-Bikes to Include a Helmet. While an impressive ergonomic upgrade offering safety benefits, you may be concerned about the hygiene aspect of sharing a helmet with strangers. Well, Wheels has you covered, literally, with peel-off biodegradable headliners included with each helmet. In continued innovative gusto, the company is equipping the helmets with magnetic sensors to detect when it is being worn, offering a 20% discount to first-time customers when worn. According to a recent study, only 1 in 190 people injured in e-scooter incidents were wearing helmets.

Why Car-Free Streets Will Soon Be the Norm. This piece describes the perpetuated mentality that it’s okay to favor one very large mode of transportation over others. A common concern is that creating no-car pedestrian zones will cause retailers to see less foot traffic as a result of inaccessibility. Studies, like this one in Madrid, continue to show that the effect is quite the contrary, boosting retail activity by almost 10%. When met with sustained investment in public transit and micromobility infrastructure, the efficacy of closing streets becomes even more pronounced. In another recent example of this shift towards holistic mobility, City of Sacramento Adopts a Complete Streets Policy.

For Our Readers in Colder Climates: Uber Guarantees Space for Skis and Snowboards with Uber Ski Feature. Beginning on December 17th, Uber will roll out a service in 23 cities that lets customers specifically request ski racks or extra space for equipment. Drivers who participate in this program will receive a “significant portion” of the additional surcharge. Also, Waze Adds Unplowed Road Reporting Feature.

Fundraises, M&A, Talent 💸

Manna Raises Seed Round Led by Dynamo VenturesManna is a drone-based last-mile food delivery service. Its primary clients are restaurants and franchise owners rather than end consumers. In this way, restaurants will benefit from "drones as a service" to offer a faster and cheaper first-class delivery experience for their customers. We’re thrilled to partner with Bobby to make 3-minute food delivery a reality. We are also glad to be joined by a great cast of participating investors including Founders Fund, Alabaster, Atlantic Bridge, ffVC, and Elkstone. 

REE To Raise at $580M Valuation. Israel-based REE has built its EV’s motor, steering, suspension, drivetrain, sensing, braking, and electronics directly into the wheels. The innovative appeal of the all-enclosed wheel architecture is its versatility in scaling up or down to various form factors and use cases. The beachhead is industrial applications with early partners in Mitsubishi, Honda, American Axle, and Linamar.

Passport Raises $65M From Rho Capital Partners, Others. Passport, a mobility management platform based in Charlotte, brings the total investment to date to $125M with this most recent round. Founded in 2010, the startup operates a platform for mobile parking payments, parking enforcement, and digital parking permits. The company serves nearly 1,000 clients worldwide and processes more than 100M curbside transactions per year.

Carsome Raises $50M From Consortia. Carsome is a Malaysian used car marketplace that runs an online auction model to conduct sales, with prospective cars typically listed the day after they are submitted by consumers. It is now one of the largest car-trading platforms in Southeast Asia. The startup is operational in Malaysia, Indonesia, and Thailand and claims 40,000 cars worth more than $300M are traded on the platform.

PrecisionHawk Raises $32M Led by Millennium Technology Value Partners. PrecisionHawk is a Raleigh-based provider of enterprise drone technology services. These services range from managing asset inventory to measuring the health of telecommunications towers, electricity distribution lines or even crops. The company will use the funds to further the product roadmap and build out its sales team.

Zetwork Raises $32M Co-Led by Lightspeed and Greenoaks Capital. Zetwork is an Indian B2B marketplace for manufacturing items. The company Zetwerk connects OEMs and EPC customers with SMEs to sell goods like crane parts, doors, chassis of different machines and ladders. With this most recent funding round, the company will scale its operations domestically and also helps local businesses find customers overseas. 

FoodMaven Raises $15.3M Led by Tao Capital. Foodmaven is a four-year-old company based in Denver whose online sourcing marketplace helps farmers, meat processors, and food distributors create a more sustainable food system and fight food waste. FoodMaven creates new pathways for lost food due to oversupply, spec expirations, or inefficient distribution channels. The company now plans to expand its service beyond Colorado, first to Dallas-Fort Worth in Texas. 

LeanDNA Raises $15M Led by S3 Ventures. LeanDNA is an Austin-based analytics platform for factory management. The five-year-old startup says its goal is to use predictive analytics and AI to help manufacturers optimize inventory, avoid shortages, and improve on-time delivery. S3 Ventures was joined by return backer Next Coast Ventures. 

Bluespace.ai Raises $3.5M Led by Fusion Fund. Bluespace is a Palo alto-based developer of software for autonomous mass transit fleets. The team, headed by previous drive.ai co-founder Joel Pazhayampallil, is retrofitting existing buses with its driverless technology. The startup’s thesis is to focus on “increas[ing] the overall ability and efficiency across trunk transit routes with higher rider capacity,” whereas other players have taken to robo-taxis, which may prove more challenging to manage infrastructurally. Other participants in the round include YouTube co-founder Steve Chen, UMC, Kakao Ventures, GDP Ventures, Atinum, and Wasabi Ventures.

Porsche Invests Undisclosed Sum In Aeva. The investment shows a deeper relationship between VW and the upstart. Aeva is a supplier for the ID Buzz AV and also working with the Audi unit. Aeva is the only lidar company that Porsche has invested in to date.

Delta Takes Minority Stake and Partners with Wheels Up. This initiative providing Wheels Up with a fleet of 190 planes and more than 8,000 customers will establish one of the world’s largest fleets of private aircraft. Delta’s minority stake, which is expected to be approved in early 2020, will allow the company to “extend [its] brand and [its] ability into a new space.”

Waymo Buys Latent Logic, Drives Deeper into Simulation and Europe. Latent Logic is a UK-based company that spun out of Oxford University’s computer science department. Latent Logic is focused on imitation learning, a form of ML that models the human behavior of motorists, cyclists, and pedestrians. The thesis is that by modeling the imperfect driving of humans, the simulation will more closely mirror real-world driving, thereby improving Waymo’s behavior prediction and planning. The two main takeaways: Waymo is doubling down on simulation technology and it marks the launch of its first European engineering hub in the UK.

Woowa Sells to Delivery Hero for $4B. The acquisition gives Delivery Hero major market share in the world’s fourth-largest market for food delivery. Woowa does 30M deliveries a month and adds a profitable operation to publically-listed, Delivery Hero.

Company Building 🛠️

🎥 A Founder’s Guide to Getting More Leads. Leaders from Gusto and Zoom share some advice with founders looking to amp up their pipeline with more leads. I would pay particular attention to the “low hanging fruit” around demand generation and then capturing that demand.

The Metrics to Consider In Your Pitch. Some metrics to consider as you build a fundraising narrative. We’ve observed that the best fundraisers tell stories but those stories are rooted in relevant data to show opportunity, traction, and momentum.

Where Great Product Roadmap Ideas Come From. I would point out that most startups commit mistakes from the latter part of this piece such as being heads down for too long and engaging in large brainstorms.

Who's Hiring? 👩‍💻

Frontend Engineer at Mobikit in Columbus, OH.

Senior Mobile Engineer at Token Transit in San Francisco, CA.

Dev Ops Engineer at SVT Robotics in Norfolk, VA.

Check out other jobs at Dynamo portfolio companies.

❤️ We would love your support. Please forward to friends and share on social media.
🗞️ If you were forwarded this and found it interesting or helpful, please sign up.
🎙 Check out Dynamo's podcast series, The Future of Supply Chain.