Dynamo Dispatch (2024/04/29)
Issue 278 | MARK-PILOT, Stark Future, Chemix
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 headlines coming out of the EV scene are presenting a range of sentiments, from Fisker’s financial woes to Honda’s $11B investment in North American factories. Even with these major developments Tesla can’t seem to stay out of the spotlight, with a plethora of news on everything from the company’s slumping profits, to autonomy initiatives, to exits and cash outs of high-profile executives. As always, read on for more!
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Supply Chain 📦
⭐ The Tricky Logistics Behind Direct-to-Consumer Sales Strategies. Apparel giants like Levi Strauss, Skechers, and Canada Goose are transitioning towards direct-to-consumer sales, emphasizing the need for a retail-oriented supply chain strategy. This shift involves intricate logistics like home delivery and managing individual orders, a departure from traditional bulk shipments to retailers. While the move requires substantial investment in logistics, companies see the potential for increased revenue by cutting out the middleman, although challenges like inventory management and cost allocation remain critical considerations. In other concerns for retailers, What is the EU’s Plan to Stop Deforestation and How Will It Work.
Mediterranean Ports Warn of Overflowing Storage Yards in Latest Threat to Supply Chain. Container ports in the western Mediterranean, like Algeciras, Barcelona, and Tangier-Med, are experiencing near-full capacity due to a surge in traffic following Houthi attacks in the Red Sea. This congestion poses challenges for Europe's supply chains, potentially leading to higher inventory costs and component shortages for retailers and manufacturers. Shipping lines are rerouting vessels, causing delays and forcing companies to hold extra stock, highlighting the ongoing disruptions in global logistics and the need for adaptive strategies. Across the world, Asian Feeder Operators Levy Emergency Surcharge Just As Port Congestion Levels Peak and Boxes Piling Into Mexican Ports - But Then Piling Up.
Chinese Exporters Brush Off Trump Tariff Threats. Chinese producers and international partners remain unfazed by Trump's tariff threats, with some even finding ways to mitigate potential impacts. Despite talks of significant tariffs, many businesses are adapting by exploring alternative pricing strategies and sourcing options while maintaining a substantial portion of their business with China. Some even say a 50% tariff “won’t come close to driving them away”. However, tensions are escalating globally, as seen with the EU launching a probe into Chinese medical-device procurement and the US calling for higher tariffs on Chinese steel and aluminum. Related, Increasing Scrutiny Could Stall Rise of Chinese eComm Platforms as TikTok Faces US Ban.
Apple Moves Closer to China Despite Supply Chain Shifts. Apple is both increasing ties with Chinese suppliers while also expanding in Southeast Asia and India, highlighting its strategic balancing act. Despite efforts to diversify, Apple's reliance on Chinese suppliers remains strong due to factors like cost-effectiveness and geopolitical considerations. Tim Cook's recent visits to China and Southeast Asia underscore Apple's ongoing efforts to navigate geopolitical challenges while maintaining its global supply chain efficiency in stark contrast to other American peers like Dell and HP that aim to phase out its Chinese suppliers. In another political balancing act, Shein Integrates With Flexport for Third-Party US Sales.
Key Bridge Collapse Turns Neighborhood Roads into Highway Thoroughfares. The Baltimore Key Bridge collapse has raised concerns about increased truck traffic and diesel emissions in Dundalk and neighboring communities. Efforts are underway to manage this traffic through small neighborhood roads and mitigate its impact on public health and infrastructure, with collaboration between local organizations and government agencies being crucial for finding solutions. It’s yet another reminder of the domino effects that come after just one point of disruption in the supply chain. On the emissions point, White House Earmarks $1.5B in Push For Freight Decarbonization and Commercial Heavy-Duty Truck Hydrogen Fueling Station to Open in California.
Mobility 🚗
⭐ China’s Cheap EVs Redraw the Map of Where Cars Get Made. China is increasing its exports of EVs leading to heightened competition in the global automotive market, as per the International Energy Agency (IEA). Chinese companies like BYD and SAIC Motor Corp.'s MG produced over half of all EVs sold last year, with more than 60% of these cars being cheaper than equivalent combustion-engine models. The surge in Chinese car exports, including EVs, has made China the top global shipper of cars, surpassing Japan and Germany. Despite challenges like high import taxes and regulatory scrutiny, Chinese carmakers remain competitive, driving robust growth in the EV market globally, especially in China where electric car sales are expected to reach 45% of all deliveries. Related, VW Aims to Reach Cost Parity with Chinese EV Manufacturers by 2026.
Honda to Spend $11B on Four EV Factories in North America. Honda plans to invest $11B to expand its EV manufacturing in North America, particularly in Ontario, Canada, where four EV-related plants are set to be established. This expansion includes an "innovative and environmentally responsible" EV factory and a standalone EV battery plant in Alliston, Ontario, alongside joint ventures with companies like POSCO Future M and Asahi Kasei for battery materials production. The goal is to start EV production in Ontario by 2028 with an annual capacity of 240,000 EVs and a battery plant output of 36 GWh, aligning with Honda's global carbon neutrality goal by 2050. These investments complement Honda's ongoing efforts in Ohio for electrification, including joint ventures with LG Energy Solutions and plans to produce an electric sedan by late 2025. Related, GM Aims to Build Up to 300K EVs in 2024 and Toyota to Assemble New EV at Indiana Plant.
Boeing Burns Through $4 Billion of Cash and Scales Back 737 MAX Production. Boeing reported a $355M loss in the most recent quarter due to fallout from the Alaska Airlines midair accident, leading to an 8% drop in revenue compared to a year ago. The company, under pressure to improve safety and quality, has slowed production and ceased providing financial targets. Boeing's production slowdown of its 737 MAX jets has resulted in a cash burn, leading to a Moody's downgrade and challenges in increasing production of its 787 Dreamliner due to parts shortages. Despite these difficulties, Boeing aims to ramp up 737 production to meet annual free-cash-flow targets by 2026. Completely unrelated, Construction on America's First High-Speed Rail Has Begun.
Tesla Profits Slump by More Than a Half. Tesla's profits dropped significantly in the first quarter of the year to $1.13B compared to $2.51B in the previous year, amid falling sales and job cuts. Despite challenges, CEO Elon Musk remains optimistic, announcing plans to advance the launch of new models. Tesla's stock price rose after this announcement, but analysts highlight ongoing challenges from lower-cost competitors and concerns about autonomous driving technology. The company is also facing issues with Musk's compensation package and is seeking shareholder approval for various proposals, including a move from Delaware to Texas. Completely unrelated, Automakers Get New Standard for Cutting a Top Source of Scope 3 Emissions and Struggling EV startup Fisker Says 4 Companies are in Talks to Buy It.
US Regulator Opens Preliminary Probe into Ford's Hands-Free Driving Tech BlueCruise. The US auto regulator has launched a preliminary investigation into Ford Motor's BlueCruise hands-free driving technology after two incidents involving Mustang Mach-E cars colliding with stationary vehicles, resulting in fatalities during nighttime conditions. The National Highway Traffic Safety Administration's Office of Defects Investigation (ODI) is evaluating BlueCruise, which offers partial driving automation with driver supervision. The investigation will focus on BlueCruise's performance in dynamic driving tasks and driver monitoring using a camera-based system. Ford Motor, the provider of BlueCruise, has not yet commented on the investigation. Elsewhere, China Lifts Tesla Restrictions, Paving Way for Full Self-Driving Rollout.
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 💸
Sorted Raises £1.65M in Seed Funding. Sorted offers AI-powered sorting tech for recycling and waste management. The funding will be used to expand the company’s business development and technical teams in order to accelerate the go-to-market strategy. Pi Labs led the round.
Continuum Raises $1.7M in Pre-Seed Funding. Continuum is a B2B reverse logistics startup. The round will enable the company to scale its operations, grow its implementation team, and provide data connectivity between end-users, distributors, and manufacturers. M25 led the round and was joined by Cambrian Ventures and Clocktower Ventures.
Camion Raises €2.7M in Pre-Seed Funding. Camion provides property owners and investors insights into the compatibility of properties with EV infrastructure. The round was led by EQT Ventures with First Look Capital and RitMir Ventures also joining.
Veyor Digital Raises $2.75M in Pre-Series A Funding. Veyor Digital offers a construction logistics scheduling software. The funding will fuel ongoing expansion in Australia and North America with a focus on go-to-market and sales. The round was led by Investible and joined by Saniel Ventures and Gravel Road Ventures.
Radical Raises $4.5M in Seed Funding. Radical is a high-altitude solar-powered aircraft maker. The funding will be used to scale the technology and grow the team. The round was led by Scout Ventures with participation from Inflection Mercury Fund and Y Combinator.
Vixtra Raises $6M in Funding. Vixtra is a Brazil-based fintech company offering credit for Latin American importers. The funding comes alongside a $30M debt facility and will be used to further invest in technology and expand its offerings of solutions to cover a larger array of customer needs. Valor Capital, QED Investors, NXTP, Endeavor Scale-Up Ventures, and Actyus provided the funding.
Outpost Raises $12.5M in Series A Funding. Outpost is a network of managed semi-truck parking facilities which also runs a brokerage business to help trucking companies find secure parking. GreenPoint Partners led the round and was joined by Speedwagon Capital Partners.
Pipedream Labs Raises $13M in Seed Funding. Pipedream labs is an underground logistics network. The capital will enable the expansion of the company’s network into more cities.
Chemix Raises $20M in Series A Funding. Chemix is an AI-powered EV battery developer. The funding will be used to scale the company’s technology. Ibex Investors led the round.
Stark Future Raises €25M in Funding. Stark Future is an electric off-road motorcycle company. The funding will serve as working capital, enabling the company to grow its production capacity. The funding comes from Big Bets.
MARK-PILOT Raises $43M in Series A Funding. MARK-PILOT provides optimized, dynamic pricing for spare parts in the manufacturing industry. The round will enable the company to expand its business in Europe and the US. Insight Partners led the round and was joined by existing investor Capnamic.
Who's Hiring? 👩💻
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
Senior Director - Global Accounting at Sennder in Berlin, Germany.
Sales Operations Analyst at Raft in Chicago, IL.
Sr. Software Development Engineer at Stord in Atlanta, GA.