Dynamo Dispatch (2023/12/04)
Issue 260 | Fr8Labs, GoMetro, Candex
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 💭
We’re feeling quite energized (and a little frostbitten) after a meetings-packed Slush Conference in Helsinki last week. It’s always great to reconnect with friends as well as meet new founders and investors all trying to build the future of supply chain. We are now slowly making our way back to the States, but first stopping in Berlin and Paris along the way. If there’s anyone in these ecosystems that you think we should meet, please introduce us!
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Madelyn, Derrek, and the rest of the Dynamo team
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Supply Chain 📦
⭐ White House Creates Cabinet-Level Supply Chain Council. Supply chain resilience remains a top priority for the Biden administration, citing that robust supply chains lead to lower prices for goods, benefiting American families, workers, farmers, and entrepreneurs. As a result, the White House has launched the Supply Chain Resilience Council which will convene nearly every member of the president’s cabinet, bringing together more than a dozen of the nation’s top federal officials directly involved in industrial policy and will be co-chaired by the National Security Advisor and National Economic Advisor. This comes alongside nearly 30 other actions the administration has taken related to supply chain such as the creation of a new office for multimodal policy to coordinate national and state-level freight strategy, as required by the Bipartisan Infrastructure Law. Elsewhere in the policy universe, Logistics Firms Unprepared for 'Tsunami' of New Emissions-Reporting Rules.
More US Retailers Adopt 'Keep It' Returns Policies to Shelter Profits in Holiday Surge. More U.S. retailers are adopting "returnless" or "keep it" policies for online purchases, where shoppers are told to keep unwanted items rather than return them if the return costs exceed the item's value. A survey by goTRG revealed that 59% of retailers now offer such policies, a significant increase from the 26% reported the previous year. As returns are expected to increase during the holiday season, retailers are seeking ways to reduce costs associated with them, some allowing customers to keep items valued up to $300 in certain cases, including defective or incorrectly shipped products. As evidenced here, there remains a long road ahead to optimize reverse logistics in terms of both cost and efficiency, leading to substantial headaches for retailers and fertile ground for the development of innovative solutions.
Oversupplied Asia-Europe Ocean Trade Readies for Two December Rate Hikes. Ocean carriers operating on the Asia-Europe trade route are implementing two rate increases in December to boost prices before annual contract negotiations, despite facing excess capacity challenges. The first rate increase on December 1 aims for rates between $1,750 and $1,800 per FEU, while the second, on December 15, targets North Asia to North Europe FAK rates ranging from $2K to $2.2K per FEU and $2.7K to $2.8K per FEU on the Asia-Mediterranean trade. However, these FAK levels remain considerably higher than current spot rates, as carriers grapple with pressure to raise rates amid a widening supply-demand gap and estimated industry losses of $15B in 2024 due to falling rates. Completely unrelated, How Trackless Trams Could Help Revitalize City Suburbs and The Biggest Delivery Business in the U.S. Is No Longer UPS or FedEx.
Walmart Shifts to India, Cuts China Imports. Walmart is increasing its imports from India and reducing its reliance on China to cut costs and diversify its supply chain. The world's largest retailer imported 25% of its US goods from India between January and August, up from just 2% in 2018, while its imports from China decreased from 80% in 2018 to 60%. Rising costs and political tensions with China are driving this shift, with other countries like India, Thailand, and Vietnam becoming more attractive sources for imports. The geopolitical landscape is not just pushing Walmart to undertake these efforts, but giants such as Amazon are also pushing ahead. Also in Walmart news, Walmart to Develop a Single Sourcing Platform to Manage Global Suppliers and Walmart Adding Parcel Stations for Faster Delivery, Greater Density.
Lineage Logistics Eyes Over $30 Billion Valuation in IPO. Lineage Logistics is reportedly aiming for a valuation exceeding $30 billion in an upcoming initial public offering (IPO), potentially one of the largest listings in 2024. The company is a major player in temperature-controlled storage and logistics and is in discussions with potential investors about the IPO, which may occur in the first half of next year. Lineage has selected Goldman Sachs and Morgan Stanley as lead banks for the offering, but no final decisions regarding the size or timing of the listing have been confirmed. Given the recent IPO winter as well as supply chain shocks from the pandemic and subsequent focus on supply chain strength, it is meaningful that a major imminent IPO is in logistics. Related, Lineage Logistics Expanding Cold Storage Capacity in Western Canada.
Mobility 🚗
⭐ Global Automakers Turn to China for EV Lessons. Global automakers, including VW, Nissan, and Toyota, are adapting to China's dominance in the EV market by looking to imitate the leader in EV manufacturing. As an example, VW aims to cut its vehicle development time from almost four years to 2.5 years, drawing inspiration from Chinese methods. Strategies include using more Chinese components, investing in local companies for cutting-edge technology, and making management structure changes for faster decision-making. The shift highlights China's influence not only in its own market but also the potential impact on the global stage. Related, Chinese Car Companies Cracked North America by Going to Mexico and Mexico’s Automotive Exports Hit Historical Record.
EV Makers Can Stop Worrying So Much About Lithium. The price of lithium has experienced an 80% drop from its November 2022 record high, directly impacting battery prices and reaching all-time lows. This decline, along with drops in nickel and cobalt prices, is relieving automakers of battery material cost concerns for the next year, thanks to an influx of new supply. Half of surveyed industry participants expect prices to fall in the next year, with only 11% predicting gains. While lithium's slump may impact mining stocks, it’s crucial relief for EV automakers who need to cut costs to win over consumers. Battery innovation and competition continues to rise as Research Into Sodium-Ion Battery Manufacturing Process for More Sustainable and Cost-Efficient Development and Thai Coal Miner Banpu to Enter EV Battery Business.
Car Dealers Tell Biden Customers Aren’t Ready for Electric Cars. Nearly 4K US car dealers are urging President Biden to reconsider proposed emissions regulations that aim for two-thirds of new passenger cars to be electric by 2032. Dealers, forming a group called "EV Voice of the Consumer," emphasize a growing mismatch between EV supply and consumer demand, with unsold EVs stacking up on lots. The letter highlights challenges such as EVs being perceived as too expensive, lack of home charging infrastructure, and time-consuming public charging. It puts an official voice to what feels like a groundswell of similar sentiment across the landscape amid the government's push for accelerated EV adoption. Over in Europe, Germany’s Budget Chaos Sows Uncertainty For the EV Industry and EU Hatches Backup Plan to Lessen Impact of 10% Brexit Tariff on EVs.
Sixt Says Goodbye to the Teslas In Its Fleet. Rental car company Sixt is reportedly reducing its integration of Tesla vehicles into its fleet due to concerns over resale values and challenges associated with Tesla's pricing strategy. The absence of "buyback" agreements with Tesla and the difficulty in forecasting residual values are cited as contributing factors. Sixt currently aims to electrify 70% to 90% of its fleet by the end of the decade, despite the reduced focus on Tesla vehicles. This move echoes recent challenges faced by Hertz, which cited Tesla's price cuts affecting resale values and higher-than-expected repair costs for slowing its electrification efforts. For more EV adoption obstacles, Connecticut Withdraws Regulation for Phasing Out New Gas Car Sales Expecting Defeat and EVs Have 79% More Reliability Problems Than Gas Cars.
First Transatlantic Flight Powered By Cooking and Animal Fats Lands in New York. Virgin Atlantic's Boeing 787 plane completed a milestone journey from London to New York, marking the first time a commercial airline operated a long-haul flight entirely powered by sustainable aviation fuels (SAF). The SAF, derived from waste cooking oil, animal fats, and other unconventional sources, is expected to result in about a 70% reduction in net emissions compared to traditional jet fuel over the north Atlantic. While breakthrough technologies like hydrogen or electric-powered flights are in the future, the aviation industry is also turning to SAF to achieve its net-zero commitment by 2050. However, concerns persist about the scalability and sustainability of SAF feedstocks and the need for increased production to meet industry targets. Completely unrelated, UAW Launches Bid to Organize Tesla and ‘Entire Non-Union Auto Sector’ in US.
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 💸
Fr8Labs Raises $1.5M in Seed Funding. Fr8Labs is building a SaaS operating system to help digitize freight forwarding operations across Southeast Asia. The funding will help expand its platform, with plans to add FX trade, financing, cargo insurance, rates management, and a marketplace. The round included financing from East Ventures, FEBE Ventures, Kaya Founders, Mulia Sky Capital, Seedstars, Venturra, and angel investors.
Monterra Raises $2.5M in Pre-seed Funding. Monterra automates the design and planning of EV charging installations via a software platform. The capital will be used to further build the team and accelerate product development. Base10 Partners led the round and were joined by Future Climate Venture Studio and Very Serious Ventures.
Osium AI Raises $2.6M in Seed Funding. Osium leverages AI for research and development in materials science, enabling industrial companies to predict the physical properties of new materials as well as refine and optimize them. The capital comes from Y Combinator, Singular, Kima Ventures, Collaborative Fund, Raise Phiture, and several business angels: Julien Chaumond, Thomas Clozel, Isaac Oates, Liz Wessel, Ebert Hera Group, Patrick Joubert, Sequoia Scout, and Atomico Angel.
Trackstar Raises $2.6M in Seed Funding. Trackstar is building a universal API for Warehouse Management Systems (”WMS”). The funding will enable the company to accelerate its plans to integrate with WMS systems globally to enhance supply chain efficiency and data accessibility. The round was led by TMV.
Construex Raises $4.6M in Seed Funding. Construex is addressing the construction supply chain in LatAm via a SaaS marketplace for the construction and design industries. Zacua Ventures and Fifth Wall co-led the round and were joined by ABSeed and Terracotta Ventures.
Retrocasual Raises $5.3M in Venture Funding. RetroCasual uses AI to provide real-time instructions and feedback to manufacturing frontline workers. Glasswing Ventures, One Way Ventures, and Indicator Ventures co-led the round, which included participation from Argon Ventures, Differential Ventures, Ascend Vietnam Ventures, Incubate Fund US, SaaS Ventures, Hypertherm Ventures, Stage Venture Partners, and Techstars.
HumanForest Raises £5.7M in Series A Extension. HumanForest is a sustainability-focused micromobility platform for eBikes. The capital will be used to further invest in the technology, such as developing its advertising platform and parking compliance software. The round included Güil Mobility Ventures, Fen Ventures, and others.
GoMetro Raises £9M in Series A Funding. GoMetro offers fleet optimization software which functions as a telemetry and data aggregator, enabling fleet managers to access and analyze data without being burdened by the disparate telematics systems of different OEMs. The funding will be used to solidify operations in the UK, Europe, and South Africa, with plans to expand to the US, Latin America, and Australia, as well as potentially the Middle East. The round was led by Zenobē Energy, a strategic investor known for financing and operating electric buses, and joined by new investors Futuregrowth, ESquared Ventures, Kalon Venture Partners, and angel investor Greg Fury. Existing investors like 4 Decades Capital, Hlayisani Capital, and Tritech Global participated.
Syrup Raises $17.5M in Series A Funding. Syrup is an AI-enabled platform to help brands optimize inventory for omnichannel commerce. The funding will help the startup add headcount to its engineering, product, and sales teams to expand its platform. Accel Partners led the round, with participation from existing investors Gradient Ventures and 1984 Ventures.
Safi Raises $19.5M in Series A Funding. Safi is a B2B recycling marketplace that uses an algorithm to match buyers and sellers, generative AI and embedded finance tools to facilitate deals, and computer vision to check the quality of material ahead of its sale, all intended to remove costs from the supply chain. The fresh funding will be used to further develop its capabilities, digitize additional components of the supply chain, and grow the team. The round was led by Nosara Capital, with participation from existing investors Lowercarbon Capital and Transition.
EMotorad Raises $20M in Series B Funding. EMotorad is an Indian-based business manufacturing electric bikes that currently exports to more than 18 countries through both white labeling and selling its own branded models. The capital will facilitate its global sales expansion. The round was led by Singapore’s Panthera Growth Partners along with participation from Alteria Capital, xto10x Technologies, and Green Frontier Capital.
Immensa Raises $20M in Series B Funding. Immensa harnesses additive manufacturing and 3D printing for industrial applications with a focus on digital inventory to optimize supply chains. Leading the round was Global Ventures, joined by new investors Endeavor Catalyst Fund and EDGO, and continued support from existing investors, such as Energy Capital Group (ECG), Shorooq Partners, and Green Coast Investments.
Adionics Raises $27M in Series B Funding. Adionics develops liquid-liquid direct lithium extraction to improve the global lithium production process. It plans to use this latest round to transition from being a R&D-focused company to industrializing the pilots it has completed up to this point. The round included previous investors as well as new strategic investor SQM.
Advanced Electric Machines Raises £23M in Series A Funding. Advanced Electric Machines is a sustainable motor manufacturing company. The capital will be used to scale up production capacity and expand into a global sales footprint. The round was led by Legal & General Capital and Barclays Sustainable, with additional participation from Impact Capital and others.
Huboo Raises £29M in Funding. Huboo is a Bristol-based eComm fulfillment platform. This latest funding will support its path towards profitability. The funding was provided by existing investors including Ada Ventures and Maersk Growth.
Candex Raises $45M in Series B Funding. Candex is a procurement vendor management and spend solutions provider. It intends to use the funds to expand into new markets. The round was led by Gold Sachs Growth Equity along with other existing investors.
Who's Hiring? 👩💻
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
Full Stack Clojure Developer at RedSky in Berlin, Germany.
Chief Financial Officer at PaintJet in Norfolk, VA (Remote).
Transportation Operations Manager at Zeelo in Boston, MA.