Dynamo Dispatch (2023/10/09)

Issue 253 | Electric Hydrogen, Regent, Loop

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 💭

The end of Q3 has brought a plethora of headlines related to the weak freight rate data. This data is indicative of the broader macro environment as a decline in consumer goods spending as a result of increased interest rates has led to excess capacity in the freight market. The consequence of the supply chain shocks due to the pandemic and subsequent inventory glut has put further pressure on rates. While analysts differ on whether we can expect a recovery next year or not until the end of the year following, the consensus is that a turnaround is at least not imminent.

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Madelyn, Derrek, and the rest of the Dynamo team

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Supply Chain 📦

⭐ Weak Freight Market May Persist. Congested retail inventories, bloated costs, and rising interest rates continue to pressure freight markets. Consumer goods spending is also trending downward relative to the highs of 2020 and 2021, even if some near-term data has been positive. As a result, rates have dropped substantially and a meaningful number of trucking firms have exited the market (although that number is stabilizing relative to the previously observed rush earlier this year). Consolidation of this market will continue as a consequence of this trend. Elsewhere, US Manufacturing Sector Nears Recovery; Construction Spending Solid and More Choppy Waters Ahead for Ocean Carriers.

Uber Connect Expands Into Returns Shipping. Uber’s local delivery service, Uber Connect, has launched a service to handle return packages: Return a Package. This service will be available in nearly 5,000 cities and will cost a $5 flat fee for up to five packages at one time, $3 fee for Uber One members. Reverse logistics are a major cost center for eCommerce players given the complexity and lack of current solutions. Uber’s deployment of this program may both be helpful in providing a logistics solution for item retrieval but may also put pressure on warehousing/fulfillment centers who already find it difficult to manage the returns process in their facilities. Also, Alternate Delivery Model Gains Traction in US but Has Ways to Go.

China Shows US That Two Can Play the Friend-Shoring Game. Russia has become a key player in the US / China tensions as the latter retaliates against the re- and near-shoring efforts of the Western World. A flood of Chinese exports has led to an accumulation of shipping in Russian ports, while at the same time exports to G7 countries have dropped 7% from March 2022 to August of this year. While the pandemic may have shocked supply chains, these efforts are reconfiguring them along geopolitical lines and fundamentally shifting global trade. For more: China's Green Tech Giants Link Supply Chains to Southeast Asia.

UPS Uses Robots and AI to Strengthen Network Capabilities, Enhance the Employee Experience. Logistics leader UPS continues to drive innovation in its operations through the use of robotics and automation, seeing an acceleration of modernization due to advancements in artificial intelligence. Many of the use cases of these technologies such as pick-and-place and autonomous guided vehicles are related to repetitive tasks that can be physically demanding for workers. With giants such as UPS increasingly willing to adopt and integrate these technologies, the landscape provides fertile ground for new players to develop and scale innovations. Also, The Robots Are Coming—to Collaborate With You.

Costs Mount as Migration-related Delays Stall Trucks at US-Mexico Border. Goods at the US-Mexico border (which some reports estimate surpass $1.5B in value) have stalled due to the record migration currently occurring. Crossings have been shut down and extra security has been imposed in order to manage this migration, with a consequence being a backlog of approximately 12 miles of trucks. The heightened near-shoring trends of US supply chains could add additional pressure to this tense situation if left unresolved. Completely unrelated, Shipping Giant Maersk Bets on Driverless Trucks to Improve Deliveries.

Mobility 🚗

⭐ America’s EV Factory Boom Brings Billion-Dollar Projects to Tiny Towns. There’s been a surge of industrial activity in small towns across the US fueled by congressional laws offering substantial subsidies and incentives to build EV and chip manufacturing plants. Georgia, in particular, is benefiting from Governor Brian Kemp's focus on the $7.6B Hyundai EV and battery plant project, bringing well-paying jobs and other local investments to the region. While federal tax credits have created a race among automakers to get their plants up and running quickly, challenges remain around infrastructure readiness and concerns about changes to the fabric of local communities as they transform to support these massive manufacturing projects. Relatedly, GM’s Battery Plants to be Included in National UAW Labor Agreement and LG Energy Solutions to Supply Toyota with Batteries and Invest $3B in US Plants.

Green Energy’s Spread Show Greater Growth Than Ford Model T. A recent International Energy Agency report highlighted the rapid growth trajectory of "mass manufactured technologies" like solar photovoltaics, EVs, and battery storage. Drawing analogies to historical innovations, such as US aircraft during WWII and the Ford Model T, EV batteries and solar are outpacing past innovations in cost reduction. However, the challenge lies in maintaining innovation and driving further cost reductions while pushing for higher annual deployment rates, particularly in wind technologies. There’s continued need for both market forces and policy to align in retiring incumbent energy systems and embracing mass standardized technologies to achieve net-zero greenhouse gas emissions effectively. Looking ahead, EVs Could Reach 86% of Global Vehicle Sales by 2030.

National Grid Study Highlights Path to Readying the Grid for Electric Fleets. The recent study focused on the need for proactive planning and strategic investments to prepare the grid for the electrification of medium and heavy-duty vehicles (MHDVs), including buses, trucks, and vans. The three key strategies identified are electric network reconfiguration, multi-value grid infrastructure upgrades, and non-wires solutions to address the need. Just financial investments won’t be enough. Instead, it’ll require close collaboration among utilities, regulators, businesses, and communities to address the challenges posed by the electrification of fleet vehicles. Unrelated, US Auto Insurer Liability Claim Payouts Soar Due to Inflation.

Tesla Sales Drop Brings BYD Closest Ever to Global EV Crown. The Chinese automaker BYD is closing in on Tesla as the world's largest seller of EVs, as in the last quarter BYD sold 432K vs Tesla’s 435K. The 23% growth from the previous quarter is partly attributed to BYD's efforts to broaden its appeal, introducing both luxury EV brands and more affordable models. It’s also driven by BYD’s global expansion, as 9% of sales are now exports outside of China. This competition will likely only heat up and will have huge implications on the global EV landscape, dictating how investments and innovation continue to develop. In news from other automakers, GM’s New CTO Exits After One Month in the Job and Insourcing and Localizing Supply Chains Help BMW Stay Flexible.

Shift Technologies to File Voluntary Chapter 11 Bankruptcy. Shift Technologies, a used car retailer, has announced its intention to file for Chapter 11 bankruptcy to facilitate an orderly wind-down of its business. The company plans to use available cash and revenue generated from inventory liquidation to support its closure during the process. Shift's two California locations in Oakland and Pomona, as well as its website, have already ceased operations. The decision comes after months of efforts to raise capital and restructure the balance sheet, reflecting the challenges in the current business environment for the automotive industry. As another data point in the current challenges, Retail Auto Technology Startups Lower VC Expectations, Slash Budgets.

The Future of Supply Chain 🎙️

Check out our podcast series that’s 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 💸

Truckistan Technologies Raises $1M in Seed Funding. Truckistan is a Pakistan-based tech-enabled LTL company. The funding will be used to fuel growth and refine the services. The round was made up of investors from Reflect Ventures, Orbit Startups, Mentor’s Fund, Five Rivers Ventures, and others.

Helios Raises $1.85M in Pre-seed Funding. Helios is a platform designed to predict and mitigate risk within agriculture by offering supply chain professionals a 360-degree view of their supply chains and leveraging AI for advanced insights. The round was led by Supply Change Capital and joined by January Ventures.

Centro Raises $2M in Pre-seed Funding. Centro autonomously monitors inventory, solving inventory and supply chain challenges for small businesses and consumer brands. Centro will use the funds to add new capabilities such as forecasting and procurement automation features, as well as launch new marketing efforts throughout North America. Ripple Ventures and 2048VC led the round with participation from Valia Ventures and Comma Capital.

Responsibly Raises $2.4M in Seed Funding. Responsibly uses AI to help companies assess supplier sustainability and reduce data compliance costs. The capital will be used to further develop its AI engine to capture more data types and expand functionality. Hambro Perks and Pi Labs led the round.

Muir Raises $3.25M in Seed Funding. Muir generates accurate and specific emissions data across supply chains by combining supply chain models, geospatial data, and emissions modeling. Muis intends to use these funds to accelerate development of its AI technology. The round was led by Base10 Partners with participation from existing investors Madrona Venture Labs and Soma Capital.

Pivot Raises €5M in Pre-seed Funding. Pivot aims to simplify the procurement process for enterprises through its P2P tool. The fund will be used to fuel expansion, including an imminent launch in European countries. Investors in the round in include Visionaries, Emblem, Cocoa, Anamcara and Financière Saint James.

Kinetic Raises $10M in Series A Funding. Kinetic is an IaaS startup that delivers digital maintenance and servicing for EVs and AVs through its network of service centers. The capital will be used to expand its engineering team with additional AI and robotics talent and grow its network of Kinetic Hubs. The round was co-led by Lux Capital and Construct Capital, with additional participation from Haystack Ventures, Automotive Ventures, and SHAKTI Ventures.

Electric Era Raises $11.5M in Series A Funding. Electric Era produces and deploys high-speed charging stations. The latest fund will be used to accelerate the rollout of its PowerNode charging stations at convenience stores and quick service retailers. HSBC Asset Management led the Series A financing with participation from SQM Lithium Ventures, Blackhorn Ventures, and Proeza Ventures.

Jetson Raises $15M in Seed Funding. Jetson is developing an eVTOL aircraft that does not require a pilot’s license. The company has raised its seed round to continue its product development efforts with the aim to launch its vehicle in 2024. The singer will.i.am joined the round alongside a group of angel investors.

Traydstream Raises $21M in Series B Funding. Traydstream provides automated trade document scrutiny and compliance checking, and risk management solutions to empower financial institutions and corporates to streamline trade finance operations, reduce risks, and enhance efficiency. The capital will be used to accelerate the development of its AI-powered platform. The round was led by Pivot Investment Partners and e& capital.

Loop Raises $35M in Series B Funding. Loop is a transportation logistics company which leverages AI to help shipping companies avoid invoice errors and reduce costs. The company’s Series B will be used to fuel further growth. The round was co-led by J.P Morgan and Index Ventures.

Regent Raises $60M in Series A Funding. Regent is building electric seagliders that do dock-to-doc over water transportation. The latest funding will be used to build and test a POC prototype and grow the team from 55 to 100 people. The round was co-led by 8090 Industries and Founders Fund, and included additional participation from Point72, Caffeinated Capital, Mark Cuban, and others.

Electric Hydrogen Raises $380M in Series C Funding. Electric Hydrogen, a green hydrogen technology company, has become the industry’s first unicorn, raising $380M. The funds will be used to expand production capacity of its electrolyzer, devices that use a process called electrolysis to split water (H2O) hydrogen and oxygen. The found was led by Fortescue, Fifth Wall and Energy Impact Partners, with participation from BP Ventures, Oman Investment Authority, Temasek, Microsoft's Climate Innovation Fund and the United Airlines' Sustainable Flight Fund.

Heramba Electric to go Public via SPAC. Heramba Electric is a global company in sustainable urban commercial and public transportation. It is merging with the SPAC Project Energy Reimagined Acquisition Corp (PERAC) in a deal where the combined company is expected to be worth approximately $450M. The two companies hope that the SPAC will aid further expansion into the US markets.

Who's Hiring? 👩‍💻

Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!

Senior Backend Engineer at Sennder in Barcelona, Spain.

Full Stack Developer at Numadic in Goa, India (Remote).

Fleet Operations Manager at Gatik AI in Toronto, ON.