Dynamo Dispatch (2023/10/23)
Issue 255 | Nirvana, Hayden AI, Lanes & Planes
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 💭
It was a fantastic week in Chattanooga, TN as we held another successful Hub + Spoke event. Thank you to all who attended — the exciting startups, supportive corporate partners, and our fantastic sponsors. Looking forward to next year already!
💥 Dynamo portfolio company PaintJet has received some well deserved recognition for its answer to heightened labor shortages in the painting industry: modular, remote-controlled robots. The team’s robotics solution results in 25% less paint needed and has now covered 1.5M square feet of building exteriors. We continue to be excited by PaintJet’s work to bring automated painting services to the supply chain industry that's riddled with assets from manufacturing plants, warehouses, chemical tanks, to ships. Read the article here for more.
On a more somber note, we know that there are friends at Convoy and Flexport who have been displaced. If you or anyone in your network are interested, we have portfolio companies hiring across the supply chain, find the roles here. Equally, if you’re thinking about starting something new yourself please reach out to us: hello@dynamo.vc.
🥰 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
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Supply Chain 📦
⭐ Bezos-backed Freight Firm Convoy Shuts Down After Slashing Hundreds of Jobs. Previously valued at almost $4B and backed by leading investors such as T. Rowe Price, Fidelity, Capital G, and Greylock, digital freight forwarding firm Convoy has announced it is shutting down following a failed search for an acquirer. The “unprecedented freight market collapse” alongside “dramatic monetary tightening” has led the company to shutter its current core business operations. CEO Dan Lewis and a handful of employees will remain to sell off what they can of the company’s technology while the rest of the staff departs. This news comes alongside additional sobering headlines within supply chain, demonstrating the dire consequences the difficult environment of depressed trucking rates and decreased load counts is causing for players in the space. On that front: Lawsuit from Former CEO Prompts Slync Bankruptcy Filing and Flexport Kicks Off Restructuring with Layoffs.
Freight Recession Unlike Any Other in History. As noted above, freight markets continue to suffer with record low rates following the dramatic highs driven by the pandemic. The freight industry has also experienced meaningful changes in the last decade and a half, including the proliferation of freight brokerages - a consequence of the deregulation of trucking in the 1980s. These freight brokerages continue to bolster small carriers who likely would have otherwise exited the market given the downward pressure on both rates and load counts. While many players have left the industry as a result of these trends, small carriers overall have held on much longer than anticipated, slowing down the otherwise expected rate of consolidation of the market. Related, New FedEx, USPS Holiday Shipping Deadlines Another Sign of Weak Demand.
Warehouse Automation Sales Slump from their Pandemic Highs, Interact Analysis Say. High eComm sales and speculative warehouse construction resulted in record levels of warehouse automation investments during recent years. However, these trends are beginning to cool, leading to reduced order intakes and prolonged sales cycles for these solutions with little reprieve forecasted for the coming year. For startups building software and robotics solutions in this space it’s worth noting these trends and how they may impact go to market strategies. However, albeit depressed overall, logistics players do continue to invest in valuable robotics and software solutions, see Amazon Introduces Humanoid Robots to its Warehouses, Assures Workers their Jobs are Safe and FedEx Scaling Program That Reduces Air Fleet Downtime.
California Trucking Association Sues to Block CARB Rule. California could be on its way to decarbonizing its trucking sector as soon as next year with the enforcement of the Advanced Clean Fleets regulation. This legislation would require that trucking players begin their transition to emissionless vehicles as early as 2024, with the goal of reaching fully zero-emission fleets by 2035, 2040, or 2045 depending on the size and type of truck. However, the California Trucking Association has sued to block enforcement of the rule. The lawsuit aims to bar CARB from being implemented or enforced “in any way”, with a statement from CTA that “conflict was inevitable once it became clear that CARB embraced a make-believe view of what could be accomplished with today’s technology and infrastructure”. As the transition to decarbonization continues, these tensions of timelines and expectation are sure to continue to come to fruition. Also, Challenge for World’s Biggest Robot Trains Is Going Electric.
Amazon is Testing Drones to Deliver your Medications in an Hour or Less. At no additional cost to consumers, Amazon Pharmacy is now testing a program to deliver medications via drones within 60 minutes of placing an order. Customers will be able to access medications to treat illnesses such as the flu, asthma, and pneumonia within this short time frame, narrowing the “golden window… the time between when a patient feels unwell and when they’re able to get treatment”. Drones continue on their march towards mass adoption as major players carry on undertaking these testing and and pilot programs. Completely unrelated, The $1 Billion Bet to Get Us Our Steak and Ice Cream.
Mobility 🚗
⭐ Utilities, Charging Companies Battle Over EV Fast Chargers, Slowing Deployment. The cumulative cost to support 33M EVs in 2030 with fast chargers is estimated at $27B to $44B. While capital commitments from private investors, governments, and utilities already exceed $20B, policy battles are slowing progress. The question of whether utilities should own charging infrastructure remains a point of contention, with some arguing that it could inhibit private investment. Nonetheless, some utilities are already moving into charger ownership in partnership with private charger providers, aiming to improve reliability and the customer experience. Solutions are still evolving, and a balance must be struck to ensure efficient charging infrastructure and widespread EV adoption. In other charging infrastructure news, ChargePoint Start Rolling out NACS Connectors and BMW, Rolls-Royce, Toyota, and Lexus are Switching to NACS.
Amazon Has EV Charging Operators in Its Rear-View Mirror. Amazon is the current largest corporate purchaser of renewable energy globally, with projects in its portfolio that could eventually produce 57K gigawatt-hours of green electrons a year. In the coming decade, EV charging operators, as well as other large tech players like Google and Meta, are expected to join the race for the renewable energy crown. As the demand for EV charging services and electricity consumption continues to rise, charging operators will need to meet the expectations of eco-conscious consumers, further accelerating the transition to green energy. Relatedly, Key Trends in EV Supply Chain 14 Months into IRA.
IEA Report Warns Electric Grid Delays Threaten Clean Energy Plans. The IEA's latest report highlights the urgent need to improve and expand electricity grids to support the transition to clean energy and meet climate targets. The study emphasizes that adding or replacing 80M km of power lines by 2040, equivalent to the entire global grid, is essential to achieve national climate and energy goals. Grids are struggling to keep pace with the rapid growth of clean energy technologies like solar, wind, and EVs. Without significant policy attention and investment, these grid deficiencies could hinder efforts to limit global warming and jeopardize energy security. In more positive news, DOE Announces Largest Ever Investment In America’s Grid and Smart EV Charging Won’t Hurt The Grid, Could be Vital in Shift To Renewables.
AV CEO Says We’re Decades Away From Self-Driving Cars That Have Freedom To Go Anywhere. According to Oxa CEO Gavin Jackson, fully self-driving passenger cars capable of operating anywhere without human intervention are "decades away" from becoming a reality. Jackson emphasized that the AV industry is far from producing vehicles that can surpass human drivers, and self-driving cars would need to become "local experts" before being trusted on public roads. Oxa, a UK-based startup, focuses on AVs that travel on fixed routes, with self-driving features monitored by human safety officers. The main barrier to complete autonomy is the amount of data required to train AI systems for all possible driving scenarios. Off the road, China Awards EHang World’s First Unmanned eVTOL Type Certificate.
Electric Lorry Startup Volta Trucks Plans for Bankruptcy. Electric lorry startup Volta Trucks in the UK is planning to file for bankruptcy, putting around 600 jobs at risk. The company had begun producing its electric 16-ton truck in April but encountered challenges after its battery supplier, Proterra, filed for Chapter 11 bankruptcy in the US. This setback made it harder for Volta to secure additional capital, leading to the decision to start bankruptcy proceedings. It highlights the difficulties faced by many electric vehicle start-ups in an uncertain market, where investors have grown skeptical about their long-term viability. Also, Will the EV Battery Recycling Industry Be Ready for Millions of End-of-Life Batteries.
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 💸
PickNik Raises $2M in Pre-seed Funding. PickNik is an “unstructured robotics company” using open source principles to tackle robotics challenges. PickNik will use the capital to develop its MoveIt Studio platform, which is designed to enable developers to create robot applications. The funding comes from Stellar Ventures and Cypress Growth Capital.
Volteras Raises $2.9M in Funding. Volteras is a developer of EV charging software acting as the connective tissues between EVs and everything they touch. The round included funding from Exor and Long Journey Ventures.
Aerodome Raises $6.5M in Seed Funding. Aerodome is a drone startup focused on helping first responders. The capital will in part be used to help rollout a trial with the Redondo Beach Police Department. The round was led by A16Z and 2048 VC.
K2 Space Raises $7M in Funding. K2 Space is a startup building large satellite buses that can deploy satellites at a fraction of current costs. The latest infusion of capital will be used to continue its development efforts. Alpine Space Ventures led the round.
Nexu Raises $20M in Series B Funding. Nexu, a provider of an automative financing platform, has raised its Series B to invest in the growth of its operations and services as well as the continued development of its intelligent platform. The round was led by Valor Capital who was joined by FinTech Collective and Endeavor Catalyst. Previous investors Altos Ventures, Wollef, Squareone, Clocktower Ventures, Gilgamesh Ventures, FJ Labs, Ivernet, and Capem also participated. The round included a debt facility from HSBC as well.
Agnikul Cosmos Raises $26.7M in Series B Funding. Agnikul Cosmos is an India-based aerospace manufacturing startup planning to launch satellites using 3D-printed rocket engines. The latest funding will be used towards building the key launch infrastructure ahead of its first commercial launches. Investors in the recent funding round include Celesta Capital, Rocketship.vc, Artha Venture Fund, Artha Select Fund, and Mayfield India.
Lanes & Planes Raises $35M in Series B Funding. Lanes & Planes is a German-based startup building B2B corporate travel solutions. The capital will be used towards the company’s expansion plans. The round was led by Smash Capital.
Hayden AI Raises $53M in Series B Funding. Hayden AI provides hardware that can be mounted on a variety of commercial, fleet or passenger vehicles and with AI and geospatial analytics capabilities. Use cases range from traffic enforcement to dynamic digital city/digital twin development. The funds will be leveraged to strengthen domestic market leadership and expand internationally. The Drawdown Fund led the round.
Nirvana Raises $57M in Series B Funding. Nirvana Insurance uses telematics data to provide truck insurance for fleets. The capital will be invested in the company’s AI and IoT competencies as well as to build its teams across customer service, underwriting, and product development. Lightspeed Venture Partners led the round and was joined by General Catalyst and Valor Equity Partners.
Elliott Considers Buyout of E2open. Elliott is an activist investor that’s been involved in PE deals for nearly a decade. E2open is a supply chain software company that recently went public via SPAC in 2021 at a then $2.5B valuation. While deliberations are still at an early stage, Elliott has said that the stock is undervalued as E2open has recently ousted its longtime CEO amidst cutting its earnings forecast.
Who's Hiring? 👩💻
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
Founding Designer at Guided Energy in Paris, France.
Account Executive at Vizion in San Francisco, CA (Remote).
Sustainability Solutions Manager at Improvin’ in Stockholm, Sweden.