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’ve got great news to share in back-to-back weeks! We’re honored to officially announce our seed investment in hydrogen tech startup Celadyne. The team is unlocking the potential of hydrogen by accelerating industrial decarbonization with durable fuels cells and efficient electrolyzers in heavy-duty industries such as energy, manufacturing, and transportation. For the full scoop, read Techcrunch’s feature story. And in case you forgot, last week we announced our most recent investment in Guided Energy.
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Madelyn, Derrek, and the rest of the Dynamo team
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Supply Chain 📦
⭐ Warehousing Demand Is Starting to Shrink. As retailers and suppliers adjust to post-pandemic inventory levels, the US warehousing market is seeing signs of contraction. Companies are consolidating warehouses and upgrading existing facilities instead of expanding their footprint. This shift reflects a return to lean inventory management strategies and the expectation that consumer spending won’t be as high as in recent years. Similarly, 2023 North America Robot Orders Down 30% Over Record 2022 while Dynamo portfolio company Plus One Robotics Reaches 1B Picks, Leading the Charge in AI-Powered Warehouse Automation.
Red Sea Attack-Fueled Ocean Freight Inflation is Starting to Ease on Key Global Trade Routes. Ocean freight rates, which surged due to the Red Sea crisis, are showing signs of decline on key trade routes, offering some relief for US shippers. Despite ongoing threats to maritime security, rates from Asia to the US and Europe are beginning to fall from the 146% and 186% increases in rates to the US East and West coasts, according to Xeneta data. However, the situation remains fluid as it can have potential impacts on contracts that carriers and shippers will begin negotiating starting in March. Elsewhere, German Firms Diversify, Build Buffers to Ease Supply Risks and Texas Again Leads Nation in Freight Bottlenecks.
China’s Temu Grabs Suppliers Ditched By Rival Shein Over Factory Standards. As Shein prepares for a US IPO, its increased supply chain scrutiny has led some manufacturers to Temu, a Chinese online marketplace offering ultra-cheap goods. While Shein prioritizes factory size and punctuality, Temu's marketplace approach accepts smaller suppliers and pays quickly, leading to competition and lower prices. Temu's expansion challenges not only Shein but also Amazon, prompting changes in pricing strategies among key players in the eComm landscape. In other big tech news, Flexport’s Apple Air Freight Deal Has Burned Through Cash.
Number of Farms in America Is Shrinking as Producers Get Older. The latest USDA Census of Agriculture reveals a historic decline in the number of farms in the US, now at 1.9M, the lowest since 1850. The aging farmer population continues to rise, with nearly 40% of farmers over 65 years old, while the number of farmers aged 35-65 declined by 9%. Despite this trend, there's a slight increase in beginning farmers and those under 35, but challenges like regulations, supply costs, and labor shortages threaten the economic sustainability of many farms. Completely unrelated, Walmart’s Sourcing From India Crossed $30B in Last Two Decades.
Major Delays in Cross-Border Cargo Flow After Glitch in Mexican Customs System. Glitches in Mexico's National Customs Agency's computer system caused widespread disruptions in freight movements in recent weeks. It primarily impacted truck moves across the US border but also affected ports and airports. The system issues persisted for up to three days, leading to significant delays and financial losses estimated at $23M per day for the industry. The lack of clear communication and accountability from government agencies further exacerbated the situation, leaving stakeholders concerned about potential future occurrences especially as the re-shoring/near-shoring trends continue to increase the volume that flows through Mexico. Nearby, Cargo Diversions to West Coast Have Started, Confirms LA Port Director.
Mobility 🚗
⭐ EV Chargers Take On Natural Gas for Power System Flexibility. EVs are increasingly being utilized to balance power markets, competing with natural gas and oil generators to alleviate grid congestion. While gas currently dominates flexibility services, EVs offer significant potential for providing local flexibility contracts, although challenges remain in predicting charging behavior and infrastructure availability. EV charging is being integrated into grid flexibility mechanisms, offering an alternative to turning off wind farms to manage grid congestion, although sophisticated coordination tools are needed to unlock their full potential. As EV adoption grows, they are expected to play a larger role in cleaning up the power system, offering both economic and environmental benefits. Related, Assessing Battery Life for Used EVs is Not That Simple.
Airbus Extends Lead Over Boeing Amid Archrival’s Stumbles. Airbus is strengthening its position in the aerospace industry, surpassing Boeing in new orders and boasting a record backlog of orders. Meanwhile, Boeing is facing challenges with production cuts and delays, particularly due to issues with its 737 MAX aircraft. Despite Airbus's lead, both companies are grappling with production challenges and quality concerns amid a competitive market. In the face of these challenges, Airbus's strategic advancements and Boeing's efforts to address setbacks signal a shifting landscape in the aviation industry, with both companies navigating towards a future marked by innovation and competition.
Waymo Recalls and Updates Robotaxi Software After Two Cars Crashed Into the Same Towed Truck. Waymo is recalling its robotaxi fleet software following two crashes involving towed pickup trucks in Phoenix. Despite describing the crashes as "minor" with no injuries, Waymo's chief safety officer emphasized the seriousness of the recall. The company has already deployed a fix to its fleet, ensuring the continuity of its ride-hailing services. This incident adds to the scrutiny faced by self-driving cars, with other operators like Cruise also dealing with safety issues and regulatory probes. Elsewhere, Cruise Appoints Automotive and Autonomous Vehicle Safety Leader Steve Kenner as Chief Safety Officer and GM is Expanding its Hands-Free Driving Network by Thousands of Miles, Safety Controversies Aside.
Lucid Slashes Air Prices By Up To $8,000 Joining EV Price War. Lucid has reduced the prices of its Air sedan models in response to price cuts from competitors like Tesla and Rivian. The base model, Air Pure, now starts at $71,400, while the Air Touring and Grand Touring models have seen price drops of $8,000 and $1,000 respectively. While Lucid aims to address barriers to EV adoption, the price cuts also reflect the company's competitive position and its efforts to boost sales after missing targets in 2023. Despite challenges, Lucid remains optimistic about the future of EVs, with plans to release new models and continue promoting sustainability in the automotive industry. Elsewhere, Former Tesla Executive Leading Ford’s Low-Cost EV Development Project.
Ford, GM CEOs Open to Partnerships to Compete with China. The CEOs of Ford and GM expressed openness to partnerships to reduce EV technology costs as Chinese competitors expand into global markets. Both companies are under pressure from low-cost Chinese EV makers like BYD, which is considering building a plant in Mexico to export EVs to the US. Ford is projecting significant losses on its EVs this year and is establishing a dedicated team to develop a low-cost EV model to compete with Chinese offerings. GM aims to break even on North American EVs by the second half of the year, but faced challenges in meeting production targets and addressing software glitches. Also on China, Volkswagen Under Pressure to Ditch Its China Joint Venture as US Impounds Vehicles.
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 💸
💥 Celadyne Raises $4.5M in Seed Funding. Celadyne enhances hydrogen fuel cell durability and electrolyzer efficiency for heavy-duty and industrial sectors. The funding will be used for manufacturing more of the material so the company can run more tests to prove its durability and efficiency. The round was led by Dynamo Ventures and Maniv with participation from EPS Ventures.
Portchain Raises $5M in Seed Funding. Portchain is a logistics startup that leverages AI to optimize operations for shipping companies. The funding will be used to build the team, fuel product development, and improve existing services. The round was led by Angular Ventures.
Fever Raises €10M in Seed Funding. Fever is a Swedish startup that provides a platform for utility companies, EV manufacturers, data centers, and power producers to operate their own virtual power plants. The capital will accelerate its expansion plans, deepen product development, and expand collaborations across Europe. The round was led by General Catalyst with existing investors also participating.
LionVolt Raises €15M in Venture Funding. LionVolt is developing 3D solid-state batteries that don’t contain the liquid lithium that is typical in lithium-ion devices. The capital will in part be used for the company’s plan to eventually build a gigafactory to make batteries for EVs in the Netherlands.
Hippo Harvest Raises $21M in Series B Funding. Hippo Harvest uses repurposed warehouse robots to grow produce in greenhouses. The round was led by Standard Investments with participation from Congruent Ventures, Amazon Climate Pledge Fund, Hawthorne Food Ventures and Energy Impact Partners.
Roam Raises $24M in Series A Funding. Roam is a Kenya-based EV startup producing electric motorcycles and buses. The latest capital will be used to scale out its production capabilities. Equator led the round, with participation from other investors including At One Ventures, TES Ventures, Renew Capital, and others.
CDL 1000 Acquires Next Trucking. CDL 1000 is a Chicago-based digital freight broker managing loads on short-haul routes between seaports and warehouses. Next Trucking offers similar services focused at the ports in Los Angeles and Long Beach. This deal allows CDL access and major market share in Southern California, becoming one of the top three trucking players in the region.
Who's Hiring? 👩💻
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
Director of Sales at Plus One Robotics in San Antonio, Texas.
Senior AI Engineer at Sennder in Berlin, Germany (Remote).
Software Development Engineer in Test at Milk Moovement in Nova Scotia, Canada (Remote).