Dynamo Dispatch (2024/05/20)
Issue 281 | Gatik, GoodShip, Layup Parts
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 đ
đ„Â Weâre extremely excited and proud that Gatik, part of Dynamoâs portfolio, has announced a partnership with Isuzu to mass produce SAE Level 4 autonomous trucks. Itâs a historic moment for the broader AV industry as itâs the first time an OEM and autonomy partner have committed to establishing a dedicated L4-capable production facility. We canât wait to see whatâs in store as Gatik continues to bring autonomy to the middle mile. Read more about the partnership, and a $30M investment, here.
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Supply Chain đŠ
â Bidenâs China Tariffs Are the End of an Era for Cheap Chinese Goods. For two decades, imports from China made many consumer products in the US cheaper, but at the cost of American manufacturing jobs and factory closures. This economic shift led to a political backlash, culminating in former President Trump's and President Biden's protectionist measures, including tariffs on Chinese goods. Biden's recent escalation of these tariffs signifies a definitive end to the era of free trade with China, with a particular focus on protecting strategic industries like clean energy and semiconductors. As the U.S. navigates this transition, there is uncertainty about the long-term economic and political impacts, especially considering the public's sensitivity to inflation and price increases. Additionally, US Blocks Imports From 26 More Chinese Companies Over Forced Labor Concerns and Temu Shifts Focus Away From US But Air Cargo Still Bullish On EComm.
The AI Boost to Global Trade Might Also Widen Imbalances. The Allianz Trade Global Survey 2024 of over 3K companies across eight countries highlights AI as a key driver poised to transform global trade. AI is expected to increase global exports by up to 0.2 percentage points, benefit industries like electronics and robotics, and improve the efficiency of global value chains. However, the rapid pace of technological advancement poses challenges for regulatory frameworks, potentially widening the digital divide between large vs small companies and developed vs emerging economies as early adopters look to create a competitive advantage. Relatedly, Google Executive Says Supply Chain Uses of Generative AI Flourishing and UPS Delivers Customer Wins With Generative AI.
Hapag-Lloyd Lifts Financial Outlook as Red Sea Crisis Boosts Freight Rates. The German container line Hapag-Lloyd reports growing shipping demand and rising freight rates, signaling a potential rebound in the industry. The company upgraded its full-year guidance after stronger-than-expected first-quarter earnings, partly due to rerouting around the Red Sea which increased shipping costs and rates. The Shanghai Containerized Freight Index saw a significant rise, and Hapag-Lloyd expects continued rate increases as carriers aim to secure higher prices ahead of peak season, despite overall revenue dropping 24% compared to the previous year. However, in other segments of the supply chain Liner Panic As New Container Production Hits a Post-Covid Peak and Truckload Carrier Profits Sank to 14-Year Low In First Quarter.
US Amazon Workers Say They Struggle To Afford Food and Rent. Five years after Amazon raised its minimum wage to $15 per hour, a study by the University of Illinois Chicago reveals that many warehouse workers still face significant economic hardships. The study found that over half of the surveyed employees experienced food insecurity, and nearly half struggled with housing issues, with those taking unpaid time off for injuries being the most affected. Despite Amazonâs efforts to improve working conditions, it continues to face criticism for high injury rates and inadequate support for its workforce. Elsewhere, Shein Has Allegedly Failed to End 75 Hour Work Weeks at Factories.
âCorrupt Ship Inspectors Demand Our Food and Cargoâ. Seafarers report frequent demands for bribes â including cash, cigarettes, and food â by port officials, in violation of international anti-corruption laws. The Maritime Anti-Corruption Network logged over 5K incidents in 2023 alone, highlighting the endemic nature of this issue. Former captain Stephen Gudgeon recounted being detained at gunpoint for refusing to comply with such demands, illustrating the severe risks faced by crews. While efforts to combat corruption are ongoing, including collaboration with governments and industry stakeholders, the problem persists, underscoring the need for a robust, unified response from the maritime industry. In other issues, Ship That Toppled Baltimore Bridge Had Lost Power Twice Before Leaving Port.
Mobility đ
â With America Off-Limits, China EV Makers Aim to Conquer Rest of World. With the Biden administrationâs 100% tariffs on Chinese EVs, these vehicles are effectively blocked from entry into the US market. This move, largely symbolic due to the minimal presence of Chinese EVs in the US, will push Chinese automakers to focus on other global markets, particularly emerging ones, and to localize production. Chinese carmakers like BYD are expanding their operations in countries like Brazil, Hungary, and Thailand, while also exploring partnerships and technology licensing to circumvent political barriers. Despite the US tariffs, Chinese EV makers remain ambitious about global expansion, leveraging their competitive products to seek opportunities outside the US. Related, Xpeng Says US Tariffs on Chinese EVs Detrimental to Meeting Carbon Neutrality.
Volkswagen Walks Back EV-or-Bust Strategy That Rankled Rivals. Volkswagen has adjusted its strategy towards EVs, acknowledging a need for more plug-in hybrids due to slowing EV sales. This shift follows several missteps, including botched model releases and falling behind in the Chinese market, and the shelving of plans for a new EV factory and outside investments for its battery unit. CEO Oliver Blume has asked European regulators for leniency on emissions targets, as VW's reliance on combustion engines continues. Despite the setbacks, VW is partnering with companies like Xpeng Inc. and exploring new EV brands in China to stay competitive. Related, Honda Plans To Invest Almost $65 Billion on EV Strategy Through Fiscal 2031 and Honda Banks on Hybrid Profits to Fund EV Transition.
Exclusive: Musk Pushes Plan for China Data to Power Tesla's AI Ambitions Tesla is planning to enhance its self-driving system by using data processed within China, potentially developing a data center in the country to support this effort. This strategic shift comes amid US government restrictions on AI technology transfers and aims to capitalize on China's vast and valuable data generated by its large fleet of sensor-equipped cars. Although Tesla has been seeking approval to transfer data out of China, it may now pursue localized data processing to advance its AV technology. The move highlights Tesla's commitment to leveraging China's resources to push the development of its Full Self-Driving system, despite regulatory challenges and competition from local EV makers.
UAWâs Push to Unionize Factories in the South Faces Latest Test at 2 Mercedes Plants in Alabama. Workers at two Mercedes-Benz plants near Tuscaloosa, Alabama, are voting against joining the UAW union, with early counts showing 56% opposed. This election, managed by the National Labor Relations Board, follows the UAW's recent success at Volkswagen's Chattanooga, Tennessee, plant, where workers voted in favor of unionizing. The UAW is leveraging recent victories and significant pay raises won from Detroit automakers to bolster their campaign, but faces challenges in the traditionally anti-union South. Elsewhere, Tesla Strike in Sweden Heats up as Nation's Largest Union Joins Fray.
How 4 Technology Trends are Shaping Automotive Design. Automakers are increasingly integrating new technologies such as infotainment screens and backup cameras into vehicle design, leading to innovative approaches like straight, simple interior surfaces and potentially translucent body panels. These changes are driven by advancements in autonomous and electric vehicle technology, shifts in consumer preferences, and regulatory influences. In China, rapid regulatory adaptation is spurring design innovations like zero-gravity seats and greater experimentation with new design concepts. Additionally, EVs are pushing automakers to focus on aerodynamics and interior space optimization, with features like flush-mounted door handles and enhanced storage options, despite some practical challenges. Related, Tesla Model 3 Spotted Testing with No Mirrors and New Camera Locations.
The Future of Supply Chain đïž
Check out our podcast series thatâs 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 đž
đ„Â Gatik Raises $30M in Funding. Gatik is a middle-mile trucking AV startup (and Dynamo portfolio company). The capital from Isuzu is part of a strategic partnership to mass-produce L4 autonomous trucks and accelerate the deployment of Freight-Only operations at scale.
Magic Lane Raises âŹ3M in Funding. Magic Lane aims to transform maps, location, and navigation services to address the evolving needs of the IoT and micromobility markets. The capital will be used to expand commercial operations, strengthen marketing initiatives, and deepen partnerships. No Such Ventures led the round.
Matel Raises $4M in Funding. Matel is an India-based EV component manufacturer. The funding will be used to scale up production, new product development, and R&D team expansion. Transition Venture Capital led the round, with participation from other strategic individuals.
ULEMCo Raises ÂŁ5M in Funding. ULEMCo converts commercial diesel engines into hydrogen-powered engines. The funding will enable the company to grow its conversion team and develop new products. The round was led by Mercia Ventures.
Shaed Raises $5.7M in Seed Funding. Shaed is an online dealership experience marketplace for EVs and other emerging technologies like hydrogen, and AVs. The capital will be used to further enhance its growth, operations, and development efforts. EnerTech Capital led the round, with participation from Powerhouse Ventures and others.
Orange Charger Raises $6.5M in Seed Funding. Orange Charger makes outlets for EV charging in multi-unit buildings. Munich Re Ventures and Climatic co-led the round, with participation from Baukunst, Crow Holdings, Lincoln Property Ventures, and Space Cadet Ventures.
GoodShip Raises $8M in Series A Funding. GoodShip offers a platform for freight network orchestration and procurement. The funding will be used to expand the team, accelerate feature development, and support customers. Bessemer Venture Partners led the round.
Layup Parts Raises $9M in Funding. Layup Parts is a composites components manufacturing startup. The funding will primarily go to capital expenditures like a builder building and more equipment, as well as hiring on both the software side and for factory floor technicians. Founders Fund led the round, with participation from Lux Capital and Haystack.
Bedrock Materials Raises $9M in Seed Funding. Bedrock Materials is a battery tech startup producing essential materials for low-cost, eco-friendly sodium-ion batteries. The funding will be used for R&D scale production of the materials at its facility, with plans to open a larger site later this year. Trucks VC, Refactor Capital, and Version One Ventures co-led the round, with participation from many others.
Overland Raises $10M in Seed Funding. Overland is developing a self-driving system designed for off-road military operations. The capital will be used to build a prototype autonomous software stack and expand the team. Point72 Ventures led the round.
Princeton NuEnergy Raises $10.3M in Series A Funding. Princeton NuEnergy specializes in lithium-ion battery direct recycling with a low-temperature plasma-assisted separation process. The capital will be used to support the construction of a manufacturing center in the US southeast. Investors included SCGC, Tech Council Ventures, and a subsidiary of LKQ Corporation.
Harbor Lab Raises $16M in Series A Funding. Harbor Lab is a Greek maritime software startup that optimizes and streamlines the port cost management process for shipping companies. Atomico led the round with participation from TMV and Endeavor Catalyst as well as existing investors Notion Capital, Venture Friends, SpeedInvest, and The Dock.
AssetWatch Raises $38M in Series B Funding. AssetWatch is a predictive maintenance company that offers an end-to-end remote condition monitoring service for manufacturers. The funding will support product development and further scaling of the business. The round was led by Wellington Management and joined by existing investors G2 Venture Partners, Triangle Peak Partners, Standard Investments, Osage University Partners, and JobsOhio Growth Capital Fund.
Cylib Raises âŹ55M in Series A Funding. Cylib is an end-to-end lithium-ion battery recycling startup. The capital will be used to scale up operations at an already-secured brownfield industrial facility in Germany. World Fund and Porsche Ventures co-led the round, with participation from Bosch Ventures, DTCF, NRW.Venture, Vsquared Ventures, Speedinvest, and 10x Founders.
Yendo Raises $165M in Debt and Equity Funding. Yendo offers a credit card that allows underserved consumers to tap into the equity of their car as they pay down their auto loans. The new capital will be used to fuel the growth of originations on its platform, letting it extend credit to more users at affordable rates. The $150M in debt financing and $15M of equity was led by i80 Group.
GrubMarket Acquires Butter. GrubMarket provides software and services that connect and manage relationships between food suppliers and their customers. Butter is a SaaS platform that leverages AI to digitize the food distribution process. Butterâs technology will be integrated with GrubMarketâs platform.
Uber Acquires Delivery Heroâs Taiwan Business for $950M. The mobility and last mile delivery tech giant Uber had slightly higher Q1 delivery bookings than analystsâ expectations from its Uber Eats segment. Delivery Heroâs largest market is Asia, accounting for 36% of revenue in 2023, but have been looking to sell its Foodpanda business in Southeast Asia markets where it competes against rivals including Grab.
Who's Hiring? đ©âđ»
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
Business Unit Director (Dallas) at PaintJet in Dallas, TX.
ML Engineer, Behavior ML at Gatik in Mountain View, CA.
Full Stack Developer III at Milk Moovement in Toronto, Canada.