Dynamo Dispatch (2023/12/18)
Issue 262 | Terminal, Pivot, Udaan
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’s hard to believe that we’re already coming up to the end of the year. Needless to say, it’s been an extremely eventful 2023 across supply chain and mobility, from unfortunate bankruptcies and setbacks to industry changing labor strikes. We’re also so inspired to see all of the innovation happening in the industry. As supply chain and mobility investors, we’re incredibly hopeful for what the future will bring.
This will be our last edition of the Dispatch for the year but we will be coming back stronger than ever in January! We hope all of our readers will be enjoying a restful and festive holiday. Catch you all in 2024!
🥰 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 📦
⭐ Shipping Giants Pause Red Sea Voyages, Dealing Blow to Global Trade. Supply chains are under increased strain due to global conflict. Attacks on commercial vessels by Houthi militants in response to the war in Gaza have led giants such as A.P. Moller-Maersk and Hapag-Lloyd to pause transits through the Bab al-Mandab Strait, a strip of the Red Sea that all ships must pass through to use the Suez Canal. Two oil tanker companies are now seeking charters that allow them to divert their ships around Africa due to safety concerns as well. These developments are adding pressure to the US and its allies to improve security in the region to protect one of the world's crucial trade routes as the escalation in attacks poses economic risks and potential disruptions to global supply chains. These supply chain pressures around the Suez Canal are compounded by the drought at the Panama Canal, both critical trade waterways experiencing major disruptions. Related, Oil Major BP Becomes Latest to Pause Red Sea Shipments as Houthi Attacks Continue.
West’s Love for Shein and Temu Drives eCommerce Boom for Air Freighters. Booming Western demand for fast fashion and cheap goods from Chinese online brands like Temu and Shein is driving up air freight rates in an otherwise weak cargo market. It’s also intensifying competition among logistics companies in Asia. This is in contrast to rates for sea cargos which have fallen drastically since supply chain complications were resolved after the pandemic. The West’s demand for these cheap products also adds a layer of complexity to the increased geopolitical tension between Washington and Bejing and the resulting efforts from the West to reduce supply chain dependence on the nation. Related to this demand for cheap goods from China: Is This How Amazon Ends?
Software Vendors Seek Opportunities In the Smaller Corners of Logistics. Software is democratizing access to tools in the domestic freight industry, particularly for small and medium-sized players. Managed transportation solutions are becoming more affordable and easier to implement, making them attractive to mid-sized shippers. Smaller brokers are also benefiting from software solutions that cater to their unique requirements as off-the-shelf options often fall short. Additionally, startups are addressing the data imbalance by providing visibility data across freight lanes, shipper relationships, and more to smaller players in order to help them compete with larger companies. Still where existing tools fall short is in the ability of brokers and shippers to easily find small to mid-size carriers. Completely unrelated, Instafreight Files for Insolvency – but Founder Ortwein Hopes for Restructure.
Freight Cycle Bottom Continues to Form in November. Freight shipments and expenditures continued to decline last month, with shipments down 8.9% year over year and expenditures off by 25.6% year over year. These figures mark the lowest levels since early 2021 and 2022, respectively. Despite the declines, there is optimism for an improvement in demand fundamentals in 2024 thanks to factors of rising disposable incomes, a strong labor market, and sharp disinflation as per ACT Research's Tim Denoyer. Compounded by a supply contraction, the cycle should be propelled forward next year causing the trajectory of rate trends to change even if the broad economy decelerates.
Raising Temperatures of Cold Storage Warehouses Would Cut Emissions, Lineage Says. The COP28 climate summit in Dubai witnessed Lineage Logistics adding its name to the "Join the Move to -15 C" initiative. This effort seeks to challenge the traditional -18 C food storage temperature standard established and untouched since the 1930s. The coalition aims to reduce carbon emissions in the supply chain and logistics sector through collaboration and exploration of practical solutions, with the potential to cut CO2 emissions equivalent to removing 3.8M cars from the road each year while maintaining food safety and quality standards. This initiative reflects but one piece of the broader shift to decarbonize the various nodes and linkages across the supply chain. On that note, Mercedes-Benz Trucks Electrifies Fleet for Inbound Deliveries to Wörth Plant.
Mobility 🚗
⭐ Auto Industry Groups Lobby for Federal Autonomous Vehicle Rules as Skepticism Grows. Major automotive industry groups are urging the USDOT to propose federal regulations that facilitate the deployment of AVs on US roads. The groups express support for the ADS-equipped Vehicle Safety, Transparency, and Evaluation Program, which aims to create standardized rules for AV deployment. This move comes as federal and state policymakers are becoming more cautious about AVs, with investigations into companies like Cruise and Tesla. The industry groups argue that standardized rules would benefit AV deployment, improve road safety, and enhance transportation access and equity. As recent setbacks, Tesla Recalls More Than 2M Cars Sold in the US Due to Autopilot Flaws and GM’s Cruise Lays Off 24% of Workforce.
Japan to Give Tax Breaks for 10 Years to Boost EV and Chip Production. The Japanese government is planning to offer tax incentives for a decade to encourage production in strategic areas, including EVs, high-tech chips, sustainable aviation fuels, green steel, and green chemicals. The tax breaks are aimed at attracting big-ticket investments and making it easier for companies to invest in Japan. The incentives include $2.8K for each battery EV and hydrogen fuel-cell car, along with other benefits for plug-in hybrid vehicles, semiconductor production, and green technologies. If the US’s IRA is of any indicator, then the tax breaks will spur a boom in manufacturing of the targeted technologies. Elsewhere, South Korea Offers $29B in Aid to Battery Makers Amid Metals War.
Car-Rental Firms Confront Early Bumps in the Road to EVs. The electrification of the car-rental industry is gaining momentum, with around 215K EVs making up about 3.3% of the global rental fleet. Different companies have varying EV ambitions and target consumers, leading to different shares of EVs in their fleets with Hertz leading at 11% and Enterprise at only 0.5%. Challenges include variations in charging infrastructure, resale values, and customer willingness to pay a premium for renting cleaner vehicles. The car-rental industry plays a crucial role in the broader success of EVs, as rental companies buy a significant number of cars and contribute to the development of a mature used-vehicle market. Relatedly, Stellantis to Trial Battery Swap Technology Starting with Fleet of Fiat 500e EVs, Ford EV Batteries Live Second Lives as Power Generators, and Currents Launches Marketplace to Support OEMs and Maximize Second-Life Battery Repurposing.
The United States Learned Little from Obama-Era Rail Investment. The USDOT has announced an $8.2B bipartisan infrastructure law grant for intercity rail outside the Northeast Corridor. The article criticizes the distribution of funds, citing the mistakes made during the Obama-era stimulus of $8B that failed to lead to noticeable improvements in rail service. It expresses pessimism about the future of American intercity rail, emphasizing the need for better federal planning, focused investment, and lessons learned from previous failures to make a significant impact moving forward. In other infrastructure news, First EV Charging Station Funded by Biden’s Infrastructure Law Goes Online.
NYC’s $15 Congestion Tax Wins Initial Approval. NYC's plan to implement congestion pricing, a toll for motorists driving into Manhattan's central business district, has received initial approval from the Metropolitan Transportation Authority (MTA). The MTA aims to implement the tolling program, the first of its kind in the US, to address funding gaps for essential infrastructure projects. Passenger cars with an E-ZPass will pay $15 during peak periods, while trucks pay $24 to $36. The approval allows the MTA to start a public comment period on the tolling structure, with officials expecting it to generate $1B annually for infrastructure funding. It’s a small step towards a potential blueprint for other cities to follow suit and disrupt the US’s car dependent infrastructure.
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 💸
Seasony Raises €1.5M in Seed Funding. Seasony aims to bring Amazon-style warehouse robots to indoor farming. The funding will enable the company to accelerate product development of its robotics technology and expand toward markets in the Middle East and North America. The funding comes from North Ventures and the Export and Investment Fund of Denmark.
Invert Robotics Raises €2.5M in Funding. Invert Robotics is a robotic inspection company focused on hazardous inspection services on factory floors. The capital will be used to expand its Dublin R&D center. This investment is the second close of its €12.9M total round, with Business Venture Partners and TechNexus Venture Collaborative leading.
Louélec Raises $3M in Funding. Louelec is a Canadian electric car-sharing fleet management startup. The capital will be used to acquire 400 new EVs to add to its platform. Desjardins Group led the funding round.
Terminal Raises $3.1M in Seed Funding. Terminal offers a Unified API platform for telematics of commercial trucking, seeking to become the “Plaid of trucking”. The funding will enable the company continue building upon its Unified API for companies that build insurance products, fleet software, and other financial services. The round was led by Golden Ventures with participation from Y Combinator, Wayfinder Ventures, Northside Ventures, McVestCo (Trimac Transportation), and Boon Fund.
METYCLE Raises €4.7M in Seed Funding. METYCLE is digitizing metal recycling through an efficient B2B marketplace for metal trade. The round will be used to accelerate go-to-market, expand into new geographies, and develop technology and AI-based enhanced quality control measures. The round was led by Project A with participation from Partech and existing investors Market One Capital and Dutch Founders Fund.
Spore.Bio Raises €8M in Pre-Seed Funding. Spore.Bio has built the world’s first device for detecting pathogens immediately on consumer goods factory floors. The funding will be used to accelerate the development and deployment of it’s AI-powered tech and expand the team. LocalGlobe led the round, with other investors including EmergingTech Ventures, No Label Ventures, and others.
Metafuels Raises €8M in Seed Funding. Metafuels is a Swiss developer of a sustainable aviation fuel compatible with existing aircrafts. The startup will use the proceeds to set up a pilot facility. The funding comes from Energy Impact Partners and Contrarian Ventures.
Ion Storage Systems Raises $15M in Funding. Ion Storage Systems provides solid-state lithium metal battery solutions for applications used in defense, aerospace, consumer electronics, electric vehicles, and grid storage. The capital will be used to continue building out its offering as well as enhance the partnership with Saint-Gobain, who led the round.
Copia Raises $20M in Series C Extension Funding. Copia is an Kenyan eComm and fintech platform for mass market consumers. The latest round of capital will be used to continue the startups’ shift towards focusing on achieving profitability instead of solely boosting top line growth. Investors in the round included Enza Capital, LGT, Goodwell Investments, and others.
Dimensional Energy Raises $20M in Series A Funding. Dimensional Energy focuses on sustainable aviation fuel production and advanced carbon emissions-derived fuels and materials. The capital will be used to scale commercially and expand its portfolio of projects. The funding round was led by Envisioning Partners, with additional participation from United Airlines’ Sustainable Flight Fund, Microsoft’s Climate Innovation Fund, and others.
Verve Motion Raises $20M in Series B Funding. Verve Motion is building a robotic exosuit designed to help workers complete physically demanding tasks in factories and other similar environments. The capital will be used to expand market share and manufacturing efforts. The round was led by Safar Partners,with participation from Cybernetix Ventures, Construct Capital, and others.
Pivot Raises €20M in Series A Funding. Pivot is a French startup building a modern spend management and procurement solution. The latest funding will be used to expand the team and build out the broader vision of the product. This capital comes just eight months after raising its pre-seed round back in April, with existing investors including Visionaries, Emblem, Anamcara, and Oliver Samwer participating in the new round.
Vammo Raises $30M in Series A Funding. Vammo offers a battery-swapping network for electric motorcycles and motorscooters in Latin America which enables cost savings for delivery workers. The funding will be used to further develop the electric mobility infrastructure in the region. The equity and debt round was led by Monashees with participation from 2150 and Maniv Mobility.
Tacto Raises €50M in Series A Funding. Tacto works with mid-sized industrial organizations to manage increased supply chain complexity through an AI-powered central operating system. The capital will fuel product development and AI investment for uses across supplier and compliance workflows, material cost optimization, and emissions reduction via sustainable procurement. The funding is led by Sequoia Capital and Index Ventures. Existing investors Visionaries Club, Cherry Ventures, and UVC Partners also participated.
Shiprocket Raising $75M+ in Potential Funding. Shiprocket is an India-based eComm logistics and shipping software solution for courier services. The capital is expected to be used towards expanding product offerings as it aims to become IPO-ready. Tribe Capital is expected to lead the round among ongoing talks.
Qogita Raises €80M in Series B Funding. Quogita is a wholesale eComm platform in the health and beauty sector that optimizes the procurement process. The funding will be used to invest in product development and category expansion. The round was led by Dawn Capital and included additional participation from existing investors Accel, LocalGlobe, and Bessemer Venture Partners.
Udaan Raises $340M in Series E Funding. Udaan is a B2B trade facilitator that aggregates manufacturers, traders, retailers, and wholesalers into a single platform, assisting merchants in securing inventories from major brands and access working capital. The round will fuel the company’s path to profitability over the coming 12-18 month, in anticipation of a 2025 IPO. The investment arm of the U.K. retail bank M&G led the round with participation from existing investors Lightspeed Venture Partners and DST Global.
Star Bulk Carriers Merges with Eagle Bulk Shipping in $2.1B Agreement. Star Bulk Carriers is a Greece-based global shipping company operating a fleet of dry bulk carrier vessels. Eagle Bulk Shipping is a US-based owner and operator of dry bulk vessels. This all-stock deal will create the world’s fourth-largest commodities carrier and make it more attractive to large investors.
Who's Hiring? 👩💻
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
Data Architect at Amitruck in Nairobi, Kenya.
HR Operations Partner at Sennder in Berlin, Germany.
Sr Research Engineer, Motion Planning & Controls at Gatik AI in Mountain View, CA.