Dynamo Dispatch (2023/08/14)
Issue 246 | Skupos, Moove, Verdagy
Dynamo Dispatch. A weekly update from Dynamo Ventures covering the latest and greatest in supply chain, mobility, and building venture-scale businesses.
š„ Have you seen any interesting startups recently? Introduce us.
šļø If you were forwarded this and found it interesting, please sign up.
š Check out Dynamo's podcast series, The Future of Supply Chain.
Weekly Commentary š
This week the Dynamo team got an educational bootcamp in all things supply chain while congregating in Chattanooga, TN. From touring manufacturing facilities to warehouses to trucking fleets, it was an eye-opening experience getting an in-depth look at these incredibly complex operations. Thank you to all of our hosts for allowing us to take a peek behind the curtain!
š„ We finished the week sharing the exciting news that Skupos has agreed to be acquired by PDI. We co-lead the seed round in 2016 as one of Dynamo's first investments. We're excited to see the growth opportunities the business has as part of the PDI team.
š£ Only a few weeks left to apply to Hub + Spoke!
Over the course of three days from Monday afternoon October 16th to Wednesday afternoon October 18th, in Chattanooga, TN, founders can make meaningful relationships and develop a deeper understanding of the supply chain to accelerate their business. Competitive companies should have a strong team, a product/service built, and early traction with customers/users. Companies that are looking to raise a seed or Series A round would benefit from the programming. Applications are due August 20th. For more details, visit our website.
š„°Ā Love reading the Dispatch? Make sure you forward it to anyone looking to stay up to date with all things supply chain and mobility.
We Are Dynamo,
Madelyn, Derrek, and the rest of the Dynamo team
Note: please add ādynamo@substack.comā to your email client, so you donāt miss future issues due to aggressive spam filters.
Supply Chain š¦
āĀ Demand Slump Drags Global Manufacturing to Financial Crisis Levels. Demand for goods globally has dropped substantially, down to levels not seen since 2008, even as shocks to the supply chain from the pandemic have evened out. This trend is driven by consumersā shifting spend to services, Chinaās faltering economy, and tight monetary policies by central banks. This is leading to a contraction in manufacturing activity, which will have cascading consequences for entities throughout the supply chain, from warehousing, fulfillment, and down to the last mile. Also on this topic (H/T Charlie from Friedkin for the share), Why Made in China is Becoming Made in Mexico.
Americaās Truckers, Cargo Pilots, and Package Carriers Are Fed Up. Supply chains are under pressure from increased labor activism due to inflation and surging demand from transportation workers. The aim of these workers is a higher share of the corporate profits they delivered following the windfalls from the pandemic as well as improved working conditions. Consequences of these moves may include higher carrying rates and investment in automation as carriers look to compensate for increased costs and reduce labor exposure in the long term. Also, What the UAW Wants From Its Fight With the Big Three and UPS Prepares to Win Back Volume it Lost During Teamsters Negotiations.
Mississippi River Careens From Floods to Low Water, Threatening Barge Traffic. Drought conditions around the world continue to hamper the flow of goods. A lack of rain has led the Mississippi River to be substantially lower than it typically is, preventing barges carrying goods such as corn, soybean, and oil from passing. Unfortunately, the record snowfall this past winter in places such as Michigan has not been enough to offset years of historic drought, and the result is bottlenecks in the flow of commerce. Related, Panama Canal Draught Restrictions Start to Bite, Sparking Superliner Surcharges.
Inside Auroraās Autonomous Trucking Operation in Texas. Aurora Innovationās autonomous trucks are now delivering for Uber Freight, FedEx, and more in Texas. These routes are currently being driven with safety drivers present, but the company hopes to launch its driverless cab by the end of next year. This is an important development for the progress of realizing an autonomous trucking future in the US. Elsewhere in trucking, US Trucking Still in Low Gear, as Volume and Rate Decline Continues.
How Nike Sneakers Get Stolen at Every Turn. Supply chains are being affected by increasing rates of cargo theft, a 63% increase for H1 ā23 compared to the same period last year. Much of this theft is being orchestrated by organized crime rings, capitalizing on the weaknesses of online marketplaces and leaving retailers and law enforcement scrambling. Companies that can provide solutions to these security gaps are likely to see increased opportunities to fill this demand. Further straining supply chains: Labor Shortage, Skills Deficit are Hampering Hiring Efforts.
Mobility š
āĀ Robotaxis Score Huge Victory in CA with Approval to Operate 24/7. The California Public Utilities Commission voted to allow robotaxi operators Waymo and Cruise to offer paid driverless services 24/7 in San Francisco after a contentious 6-hour public hearing. Previously, the two companies were allowed limited operations in various ways to meet obligations from the stateās regulatory framework covering AV testing and commercial operations. Opponents to this ruling cited safety (recently there have been several publicized incidences of Cruise and Waymo AVs obstructing emergency vehicles) and job loss concerns. The ruling was ultimately decided based on the satisfactory completion of the regulatory framework. This is a critical moment for the AV and robotaxi industry, and the rollout will be closely watched to determine the impact it will have not only in SF, but across the country. Correspondingly, Cruise Begins Testing Self-driving Vehicles in Atlanta and GM Still Struggling to Build EVs but Sees Margin Growth Ahead for Cruise.
Electric Busmaker Proterra Files for Bankruptcy. The well-established, highly funded EV player Proterra filed for bankruptcy as several headwinds across the industry constricted its financial situation, but the company still hopes to continue operation after recapitalization. What started as an electric transit bus company has since expanded into 3 business lines ā battery systems, transit, and charging infrastructure ā before going public in 2021 via a SPAC merger. Proterra cited multiple reasons that led to bankruptcy, including inflation, a tightened capital market, supply chain constraints, slow and tight transit agency budgets, and the bespoke needs of each transit agency. The unfortunate circumstance serves as a warning across the industry that capital-intensive businesses will have to be prudent in not just how they spend, but in their GTM strategy as well. In other news of headwinds in the EV space, Volvo and Mack Trucks Recall Most Class 8 Electric Trucks Due to Battery Fire Risk and Analyst Expects EV Plateau Shifting from Early Adopters to Regular Customers.
Lithium Industry Will Require $116B Investment to Meet Demand. A study by Benchmark Minerals concludes that the lithium industry will need to invest $116B by 2030 to meet demand based on targets set by automakers and governments. In an āalmost impossible and definitely a race against timeā scenario, investments will have to be made to build new mines and refineries in parallel to expanding current capacity. Conversely, the largest lithium producers may not be fully incentivized to immediately go all-in on investments, as they might flood the lithium and decrease overall prices. Instead, we might see other players along the supply chain get more aggressive, including automakers like GM and Tesla who have already begun making direct investments in mines and refineries. This may trigger in the near future a new kind of race where weāll see different players claiming a stake in raw materials. Relatedly, US DoE Invests in Lithium Sourcing Technology and EU Funds Solid State Battery ProLogium Project in France while US Scientists Repeat Fusion Power Breakthrough.
Three Trends to Watch in EV Charging. There has been a dizzying amount of updates in the EV charging industry of late from the progress of large automakersā transition down to early signs of promising new tech found in labs. BloombergNEF highlights key trends including: the new opportunity for automakers to enter the electricity trading market, the growing proliferation of trucking charging stops, and large automakers such as Tesla, Hyundai, and VW pursuing wireless charging technology. The trends highlight the immense progress that has been made on the EV charging front and the rapid iteration weāll likely see in the market. Maybe more impactful to consider however, are the second-order effects that EV charging will have on other industries like markets trading. For more innovations in charging, check out New York Targets EV Grid Integration, GM Says Bidirectional Charging Will Come Standard Across Its EV Lineup by 2026, PG&E Wants EVs to Save Californiaās Power Grid, and Ford EVs May Gain Ability to Charge on the Road.
Japanese Carmakers See Next Few Years as Fight for Survival in China. As local Chinese local brands continue to gain momentum in the fast growing EV market, Japanese automakers such as Nissan, Honda, Mazda, and Mitsubishi has seen their sales slow or drop dramatically. To try and stem the tide, these automakers will be trying out different tactics such as accelerating EV and hybrid car lineup launches by 5 years (Nissan), adding targeted incentives (Honda), and expanding the EV lineups (Mazda). The only major automaker that hasnāt seem to have taken a drastic hit is Toyota, as its sales only fell by 3%, seemingly bolstered by the demand for its hybrid cars. Regardless, the strong brand momentum of Chinese cars could be an existential issue each major automaker, including those in the US, will have to address in one of the largest EV markets in the world. In other news around Asia, Tesla Relies on China for 40% of Battery Supply Chain and South Korea Pledges Further E-mobility Investment in Indonesia.
The Future of Supply Chain šļø
Check out our podcast series thatās been running since 2018. On each episode of the Future of Supply Chain, we sit down with a different entrepreneur, investor, or industry veteran to discuss innovation, technology, and the most exciting opportunities in supply chain as we build the future of the industry together.
Fundraises and M&A šø
š„ PDI Technologies Acquires Skupos. PDI Technologies delivers solutions and insights that serve as the backbone of the convenience retail and petroleum wholesale ecosystem. This firm has acquired Skupos, a platform that connects independent convenience stores and CPG brands to enable smarter, more profitable retail. By bringing Skupos customers together with PDA, the acquirer hopes to offer brands access to performance and activation at more than 25K sites, benefitting everyone across the convenience ecosystem.
microFLEET Raises $500K in Grant Funding. microFLEET provides micro-mobility fleet solutions including charging hubs, vehicles, software, and support. The funding will be used to launch a patent-pending invention called OneDock, which could allow the company to grow within the eMicromobility market. This funding comes from iMOVE Cooperative Research Center, an Australian government-backed centre for transportation and mobility R&D.
Kavida.AI Raises $1.1M in Seed Funding. Kavida.AI, which de-risks procurement by tracking, managing, and resolving issues within the supply chain, has raised a Seed round with the intent to add ChatGPT to its platform and expand its AI and data science teams. The round was led by Qima and joined by Red Bus Ventures.
Sereact Raises $5M in Seed Funding. Sereact is a German-based startup that is building AI-powered software to automate warehouse processes such as leveraging ChatGPT to enable users to give pick and place robots instructions. The capital will be used to expand its team and to continue the development and international rollout of its new PickGPT offering. Point Nine and Air Street Capital led the round, with additional participation from angel investors.
Treehouse Raises $10.4M in Series A Funding. Treehouse is an installation-as-a-service company for home electrification, with an initial focus on EV charging. The funds will be used to expand the companyās geographic footprint, grow its team of electricians, and invest in software and operational tooling. This Series A was led by Montage Ventures and Trucks, with participation from CarMax, Assurant Ventures, Acrew Capital, Gutter Capital, Detroit Venture Partners, Automotive Ventures, Holman, Virta Ventures, Alumni Ventures, and Invest Detroit.
Stabl Energy Raises ā¬15M in Funding. Stabl Energy, the developer of commercial energy storage with used EV batteries, has raised ā¬15M in funding from Nordic Alpha Partners, European Innovation Council with participation from existing investors UVC Partners and Energie 360 Gradās Smart Energy Innovation Fund. Stabl Energy intends to use these funds to expand and scale its net-zero energy storage system internationally.
Tractian Raises $45M in Series B Funding. Tractian is an industrial asset monitoring company that uses sensors, edge computing, and AI models to predict mechanical failures. The funding from this new round will enable the company to expand its AI capabilities, grow its research and development team, and enter new industrial verticals. This round was led by General Catalyst and Next47.
Verdagy Raises $73M in Series B Funding. Verdagy is the developer electrolyzing technologies for industrial markets. The capital will be used to accelerate the launch and commercialization of its electrolyzer module which will āserve as a fundamental unit to future systems at the 200MW scale and beyondā. After initial deployments with existing partners, Verdagy will expand its electrolyzer technology to additional customers to support global industrial decarbonization in heavy industries such as oil and gas, ammonia, steel and e-fuels.
Moove Raises $76M in New Funding. Moove is an African-focused mobility fintech providing gig economy drivers with flexible vehicle financing options to get started. The additional capital will allow the startup to expand and consolidate its position in the various markets itās currently in across Africa, Europe, the Middle East, and Asia. The round consists of $28M in equity led by Mubadala Investment Company, $10M in venture debt, and $38M in other funds from the last 12 months.
Who's Hiring? š©āš»
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
Sales Account Executive at Sennder in Netherlands.
Customer Success Manager at Token Transit in San Francisco, CA or Remote.
Senior Software Engineer, Backend & APIs at Vizion in Remote.