Dynamo Dispatch (2024/05/13)
Issue 280 | Wayve, Hysata, Legion Technologies
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 Dynamo team had the privilege of spending this past week with many of our portfolio company founders for our annual CEO Summit in Chattanooga, TN. The week was filled with peer learning on topics such as board management and team building, complemented by fantastic Argentinian barbecue. We are grateful to our founders who traveled to join us, be it from down the road in Tennessee or even halfway around the world.
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Madelyn, Derrek, and the rest of the Dynamo team
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Supply Chain 📦
⭐ Shein to Prioritize Compliance Amid U.S. Forced Labor Crackdown. Shein is intensifying efforts to ensure compliance with US regulations, notably the ban on goods sourced from China’s Xinjiang region due to forced labor concerns. This includes increased staffing and spending on compliance, setting up a dedicated email for reporting violations, and collaborating with reputable outside testing firms. The move comes amid heightened scrutiny from US lawmakers and regulatory bodies, signaling a shift towards stricter enforcement in the import small packages. On the other hand, Mattel to Shutter Supplier Plant in China this Year.
Electric Trucking Costs Could Be More Than Twice Diesel. Ryder's analysis challenges the notion of electric trucks significantly reducing total cost of ownership compared to diesel counterparts. They found that for heavy-duty and mixed fleets, transitioning to EVs could lead to cost increases ranging from 5% to 67%, depending on the vehicle type and geographic area, driven by factors such as vehicle costs, charging infrastructure, and labor costs. This raises concerns about the feasibility and economic viability of widespread EV adoption in the commercial trucking sector, particularly in regions with higher energy costs like California. For more on the matter, Companies Are Balking at the High Costs of Running Electric Trucks while Amazon Debuts Electric Trucks in Ocean Freight Operations and $53M Project Brings Hydrogen-Powered Hyundai Trucks to California.
How CH Robinson is Using AI to Automate Logistics Management Tasks. CH Robinson is leveraging AI to automate tasks like responding to quote requests via email and scheduling touchless appointments, aiming to enhance productivity and free up time for strategic initiatives. The company's use of generative AI has led to notable improvements in efficiency, with over 2K truckload customers benefiting from faster response times. These AI-driven solutions not only streamline logistics processes but also enable CH Robinson to scale its capabilities and provide enhanced service levels to its clients, showcasing the potential of AI in optimizing operations and driving competitive advantage. In terms of the freight market, Outlook for US Freight Economy Remains Cloudy Despite Early Import Surge and Major Truck Makers Downshift For a Stretch of Normal Demand.
China’s Trade With Europe Sinks as Xi Seeks to Rebuild Ties. Last week, Xi Jinping urged European leaders not to mimic the US in limiting imports of Chinese high-tech products like EVs. Despite a 1.5% rise in China's overall exports, shipments to the EU and US declined, driven by tensions and trade shifts influenced by China's efforts to navigate around US import tariffs. Meanwhile, exports to Latin America and Southeast Asia surged, reflecting China's focus on expanding trade with developing regions amidst geopolitical challenges and economic fluctuations. Similarly, US Overtakes China as Germany’s Top Trading Partner.
Asia-Europe Ocean Trades a Nightmare Scenario, Unless You’re a Carrier. Asia-Europe ocean freight demand is surging at rates resembling peak pandemic levels, leading to capacity cuts, rate fluctuations, and container shortages. Forwarders are struggling to secure bookings, and carriers are implementing peak season surcharges and higher tariffs, creating challenges for importers. The situation is expected to persist through May, with potential for demand to decrease sharply after October, making the volatility of the market one to keep an eye on. Unrelated, How Online Shopping Is Saving the Bricks-and-Mortar Store.
Mobility 🚗
⭐ US Set to Impose 100% Tariff on Chinese Electric Vehicle Imports. The Biden administration plans to significantly increase tariffs on Chinese EV imports from 25% to 100%, aiming to protect the American auto industry from potential market flooding by cheaper Chinese EVs. During a recent trip to Pennsylvania, President Biden expressed intentions triple tariffs on Chinese steel and aluminum, alongside investigating unfair practices in China's shipbuilding sector. The tariff hike on EVs is seen as a strategic effort to prevent Chinese automakers from undercutting the US market while simultaneously promoting domestic investment in clean technologies and reducing dependence on Chinese supply chains. Related, Huge US Trade Barrier on Chinese EVs Means More Destined for Australia, China's Car Exports Hit Record High in April, as Domestic Sales Fall and China's Zeekr Is Now A Public Company. Its Path To US Sales Is Less Clear.
Once-Loved EV Startups Teeter on Edge as Buyers Sour on Industry. The EV market is experiencing a meaningful slowdown in demand leading to a fierce price war that is particularly challenging for industry leaders like Tesla and even more so for newer, less established companies. Startups like Rivian and Lucid are struggling the most, having reported larger-than-expected losses and facing steep declines in their stock values since their public debuts. The ongoing price competition is driven by the saturation of early adopters and the cautiousness of mainstream consumers who are deterred by high borrowing costs and a still-developing charging infrastructure. The intense pricing pressure and the high cost of financing are expected to lead to increased auto bankruptcies, particularly among smaller and financially weaker firms such as Fisker which has already halted production and is facing potential bankruptcy. Related, Rivian’s Losses Widen and Stock Falls 5%, but Execs See Profit Outlook Improving and April Auto Sales: EVs Make a Slight Comeback for Automakers.
BP and EVgo See Opportunities in Aftermath of Tesla Gutting Supercharger Team. BP, one of Tesla's competitors and customers, is actively expanding its BP Pulse charging network in the US, having invested $1B in the effort, including the purchase of $100M in Tesla’s fast-charging hardware. As Tesla scales back its Supercharger expansion and reduces its staff, BP Pulse aims to acquire redundant sites and possibly hire former Tesla employees to leverage their expertise in developing effective charging solutions. The future impact of these changes on the Supercharger network and overall EV adoption, particularly whether the dispersion of Tesla’s expertise will improve other networks or dilute the Supercharger’s unique advantages, remains uncertain.
Honda Ramps up R&D Spending as it Expands Hybrid Push. Honda Motor Co plans to increase its R&D spending by 23% this year, aiming to enhance its competitiveness in hybrid and EVs. The company also announced a share buyback worth up to 300B yen after surpassing analysts' earnings estimates in Q4, largely due to robust sales in the US which helped counterbalance a sales decline in China. Despite being relatively late to the fully EV market, Honda is focusing heavily on hybrids, targeting the production of 2M hybrid models annually by 2030. Additionally, amidst disappointing fully EV sales industry-wide, Honda is actively pursuing a partnership with Nissan Motor to co-develop EV components, while also planning to establish an EV production base in Canada, and launch six new EV models in China by 2027. Also, Honda Motor Expects Annual Profit to Fall, Announces Share Buyback.
Lufthansa's CEO Advocates For Stronger Aviation Competition Amid Boeing Setbacks. Lufthansa's CEO is facing challenges due to delayed aircraft deliveries from Boeing, emphasizing the importance of a resilient and competitive aviation sector that relies on the rivalry between Boeing and Airbus to remain vibrant. These disruptions impact the aviation industry's operations and profitability, influencing global markets and making airline stocks volatile. Lufthansa is actively adapting by pursuing strategic initiatives like potentially acquiring a stake in Italy's ITA Airways and maintaining essential transatlantic routes to enhance its market position amidst these industry challenges. Completely unrelated, Proficient Auto Shares Tread Water After $215 Million IPO.
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 💸
Maverick AI Raises €1.3M in Pre-Seed Funding. Maverick AI has developed a platform to help manufacturers become more sustainable, generating real-time information to help them make better decisions. The company will expand its team, improve the AI platform, and scale operations with the funding. Act VC led the round.
Checkfirst Raises $1.5M in Pre-Seed Funding. Checkfirst provides an AI-powered workflow tool to enable remote audits and inspections. The round will enable the company to develop and expand its offerings. The funding comes from Olisipo Way and Hiero VC.
Axmed Raises $2M in Seed Funding. Axmed is a B2B marketplace seeking to address supply chain fragmentation in the drug supply chain. The funding will be used to fuel its plans and comes from Founderful Ventures.
Mimic Raises €2.3M in Pre-Seed Funding. Mimic is a Switzerland-based startup developing a collaborative robot with humanoid hands. The capital will be used on further development of the robot and foundational AI model ahead of the official product launch this year. Founderful led the round, with participation from another.vc, Tiny, and other angel investors.
Buildvision Raises $3M in Seed Extension Funding. Buildvision provides a construction material procurement platform. The round was led by Crosslink Capital with participation from Euclid Ventures.
Composabl Raises $4.25M in Seed Funding. Composabl is a no-code UI platform to create autonomous agents for industrial use cases including robotics, drones, and machinery. Momenta led the round, with participation from Ridgeline, Exposition Ventures, and Hannah Grey VC.
Cargado Raises $6.8M in Seed Funding. Cargado is building solutions to solve the problems in cross-border freight between the US and Mexico. The new capital will be used to expand the team and enhance the company’s product. Primary Venture Partners led the round, along with participation from Ironspring Ventures, Zenda Capital, Wischoff Ventures, Proeza Ventures, and RyderVentures.
Layup Parts Raises $9M in Seed Funding. Layup Parts aims to transform composite parts manufacturing. The funding will be used for capital expenditures, hiring, and building a factory for manufacturing parts. Founders Fund led the round with participation from Lux Capital and Haystack.
Lucid Bots Raises $9M in Series A Funding. Lucid Bots provides robotics for labor-intensive tasks such as cleaning drones and pressure washing robots. The funding will be used to advance the company’s portfolio of autonomous robotic solutions. The round was led by Cubit Capital, with participation from Idea Fund Partners, Danu Venture Group, and existing investors that include Y Combinator's Growth Fund and Gratus Capital.
Paxafe Raises $9M in Series A Funding. Paxafe is an AI software provider for the cold chain market. It plans to use the funding to continue developing its risk management platform, expand globally, build on its strategic partnerships, and expand its sales teams. Framework Venture Partners led the round, with participation from M12, Rosecliff Ventures, Elevate Ventures, and others.
FleetPulse Raises $11M in Seed Funding. FleetPulse is a trailer telematics solution provider. FleetPulse was founded as a business unit within trailer manufacturer Great Dane, and now spinning out as a separate company. Four More Capital led the round.
Superplum Raises $15M in Series A Funding. Superplum is building a direct-from-farm produce supply chain in India using technology and cold-chain infrastructure. The funding will enable the company to fuel its efforts. The round was led by the company’s incoming chairman, Erik Ragatz.
Stella Automotive AI Raises $19.7M in Series A Funding. Stella Automotive AI provides automotive AI assistant for auto dealers to deliver a better customer experience. The capital will be used to drive market growth and support ongoing product enhancement and development. Investors in the round include Reynolds and Reynolds, Qvale Auto Group, OREMOR Automotive Group, and others.
LI Industries Raises $36M in Series B Funding. LI Industries provides next-generation lithium-ion battery recycling technologies. The funding will be used to construct a 10K ton recycling facility to meet its partners’ growing needs. Bosch Ventures, Khosla Ventures, and LG Technology Ventures co-led the round, along with participation from many other new and existing investors.
Legion Technologies Raises $50M in Funding. Legion Technologies offers an intelligent workforce management platform. The funding will fuel go-to-market efforts and R&D efforts. The round was led by Riverwood Capital with participation from existing investors, including Norwest, Stripes, Webb Investment Network, and XYZ.
Hysata Raises $111M in Series B Funding. Hysata is an Australian developer of green hydrogen electrolyzers. The funding will be used to advance product development and expand production capacity at its manufacturing facility as it focuses on reaching gigawatt-scale manufacturing. BP Ventures and Templewater co-led the round, and were joined by POSCO, IMM Investment Hong Kong, Shinhan Financial Group, and many others.
Wayve Raises $1B in Series C Funding. Wayve is a British self-driving startup focused on situations that do not follow strict patterns or rules. The capital will be used to accelerate the development and launch in production-model vehicles of its AI technology that can learn from and adapt to human behavior. Softbank led the round, with participation from Nvidia and Microsoft.
Who's Hiring? 👩💻
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
Backend Developer at Rouvia in Berlin, Germany.
Cross-Border Procurement and Pricing Manager at Steam Logistics in Chattanooga, TN.
QA Tester at Zeelo in London, UK.