Dynamo Dispatch (2024/06/03)
Issue 282 | Zenobe, Realtime Robotics, Syre
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 💭
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Supply Chain 📦
⭐ The Mounting Strains On Global Shipping. At the port of Algeciras in Spain, the congestion and demand have soared, with cranes constantly at work and containers stacked high. This strain, mirrored at the Tanger Med port in Morocco, follows rerouting of shipping lines away from Yemen due to attacks by Houthi militias, increasing travel times and bottlenecks. These diversions and port congestions have compounded existing challenges such as pirate attacks off Somalia, reduced Panama Canal transits due to drought, and an influx of Chinese cars into European ports. Industry leaders warn that without resolving these issues, the upcoming peak shipping season could exacerbate supply chain disruptions, especially if European consumer demand rebounds. For more in the industry, Container Shipping Entering a ‘Precarious Balancing Act’, Singapore Congestion Tests Indian Supply Chains Amid Growing Asian Imports, and $5.4B 1Q24 Profit For Container Shipping.
Blacklisted Chinese Companies Rebrand as American to Dodge Crackdown. Chinese firms like LIDAR maker Hesai Group are establishing US-based subsidiaries under different names to circumvent regulatory challenges and continue operations amid rising US sanctions. Hesai created American Lidar in Michigan to distance itself from its Chinese origins but was still labeled a Chinese military entity by the US Defense Department, impacting its operations. Similarly, other Chinese companies like BGI Group and drone maker DJI have employed rebranding and partnerships to mitigate the impact of US restrictions. This trend highlights the strategic adjustments Chinese companies are making to navigate the complex US regulatory landscape. Within, China Unveils $48B Fund to Bolster Chip Industry.
US Escalates Crackdown on Trade Rule Behind Shein and Temu. US officials are intensifying scrutiny on the de minimis customs exemption, which allows eComm firms like Temu and Shein to send low-value packages from overseas to American shoppers without paying tariffs. The US Customs and Border Protection recently suspended several customs brokers from the Entry Type 86 program, which facilitates fast clearance of these shipments. This move follows increasing political and regulatory pressure to address the massive influx of de minimis packages. As a response, Temu and Shein are making adjustments such as changing packaging and enhancing compliance measures to navigate the heightened oversight and potential regulatory impacts. For a look into who benefits, Meet the Shirt Maker Who Loves US Tariffs.
Southeast Asian Exports Seen Surging Through 2030. Companies are increasingly relocating production to avoid tariffs and trade barriers, potentially doubling exports from Southeast Asian economies like Vietnam, Malaysia, and Mexico over the next six years. A Nomura report highlights that firms are seeking to reduce reliance on China and circumvent trade restrictions. Key sectors experiencing relocation include automobiles, electronics, apparel, and semiconductors, with substantial investments from the US and developed Asian countries into India while Chinese companies pushing into Southeast Asia. Despite these shifts, full independence from China's supply chain remains challenging, and the IMF warns of potential dislocation and losses amid increasing global fragmentation. Unrelated, Williams-Sonoma Makes Stride in Delivery Efficiency, Improving Gross Margins by 240 Basis Points.
How America Inadvertently Created an ‘Axis of Evasion’ Led by China. Western sanctions aimed at restricting trade and financial access for nations like Russia, Iran, Venezuela, and North Korea have unintentionally fostered a global shadow economy, with China at the center. These countries have strengthened their trade ties with China, which now provides a crucial economic lifeline by trading goods such as oil, drones, and military equipment. This "axis of evasion" undermines Western sanctions by using Chinese currency and payment systems to obscure financial transactions. Notably, China’s substantial oil imports from these countries bolster their economies, while Chinese firms supply critical dual-use goods to Russia, further complicating U.S. efforts to enforce sanctions. For the rest of the world, Costs of Economic Fragmentation Include Moving to Hard-to-Work Places.
Mobility 🚗
⭐ American, United Continue Seeing Widespread Supplier Issues. Issues at various suppliers, including Boeing, are causing significant stress and prompting strategic changes for airlines like American Airlines and United Airlines. American Airlines CEO Robert Isom highlighted that suppliers such as Honeywell have backlogs that impact the industry’s capacity, while Honeywell Aerospace is investing to address these delays. Despite improvements in the supply chain, Boeing still faces quality issues with the 737 MAX and 787 programs, leading United to adjust its fleet plans, including leasing A321neos with CFM Leap engines. United CEO Scott Kirby noted that the supply chain problems are widespread, with Pratt & Whitney's GTF engines presenting more issues than Boeing's. Completely unrelated, US Trade Authorities Find Labor Rights Denial at Volkswagen Plant in Mexico.
The Very Slow Restart of GM’s Cruise Driverless Car Business. Despite setbacks, GM remains committed to its future in autonomous vehicles. Now emphasizing safety, Cruise is cautiously resuming testing, but the company faces challenges catching up to competitors like Waymo and Zoox, who have more advanced and reliable driverless operations. GM is standing steadfastly behind Cruise, investing over $8B despite financial losses, with plans to eventually reintroduce driverless ride-hailing services in select cities. Related, How Waymo Outlasted the Competition and Made Robo-Taxis a Real Business.
Most EVs in the US Are Still Being Shipped to the Same Few States. The US EV market is growing rapidly, with the Volkswagen ID.4 being a popular choice, but EV availability is uneven across the country. In some states like South Dakota, Arkansas, and Mississippi, the ID.4 is almost sold out, while other states have very few EVs available. This uneven distribution is partly due to traditional automakers' cautious approach and the franchise dealership model, which prioritizes regions with higher demand for EVs. Despite an expected 20-25% increase in EV sales this year, rural areas remain underserved, highlighting the need for better inventory distribution and infrastructure to support broader EV adoption. Related, EU Car Registrations Jump on Growth in Major Markets, Extra Sales Days.
Toyota, Mazda, and Subaru Collaborating on Next-Gen Engines. Toyota, Mazda, and Subaru have announced a collaboration to develop next-generation internal-combustion engines, each focusing on their own specialties: Toyota on four-cylinder engines, Mazda on rotary systems, and Subaru on hybrid boxer engines. These engines aim to offer better efficiency and performance while being compatible with alternative, carbon-neutral fuels such as biofuels, liquid hydrogen, and synthetic fuels. The collaboration follows the three companies' lagging presence in the EV market and their shared goal of reducing CO2 emissions through more compact and integrated engine designs. Elsewhere, Vehicle-to-Everything Bidirectional Charging Pilot Launches in Colorado.
EU Commission to Postpone Chinese EV Tariff Decision, Source Says. The European Commission will delay its decision on Chinese EV tariffs until after the European Parliament election on June 9, to avoid influencing the election campaign. The tariffs, initially expected by June 5, would significantly increase costs for Chinese EV makers. These costs, estimated to result in billions in expenses to China, would result in fewer EVs to the EU with the aim to protect the competitiveness of European automakers. Related, China Won't 'Sit Back and Watch' if the EU Slaps Tariffs on Electric Vehicles, China’s EV Sector Could Offset Looming EU Tariffs with Detours via ‘Friendly’ Tracks, But Be Prepared for Countermeasures, and BYD Launches Hybrids With 1,300-Mile Driving Range.
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 💸
Viable Raises £2.4M in Seed Funding. Viable is a fintech platform for consumer eComm business selling through platforms like Shopify, Amazon, and TikTok. The capital will be used to accelerate the development of embedded finance products. Investors in the round include Episode 1, Haatch, Portfolio Ventures , and angel investors.
(Re)vive Raises $3.5M in Seed Funding. (Re)vive offers a platform enabling brands to turn unstockable inventory into merchandisable goods. The round will support the company’s next phase of growth and further strengthening of its platform. New investor Equal Ventures and existing investor Hustle Fund co-led the round.
Turno Raises $5.5M in Funding. Turno is a Bengaluru-based commercial EV distribution and financing platform. The capital will be used for expansion and to meet working capital requirements. British International Investment led the round, with additional participation from Quona Accion, Stellaris Ventures, and B Capital.
Swiipr Raises £6M in Series A Funding. Swiipr is a travel paytech company serving the airline industry. The funding will fuel the next phase of the company’s growth. Octopus Ventures led the round.
Shipzero Raises €8M in Series A Funding. Shipzero helps shippers, logistics service providers, and carriers manage and reduce transport emissions. The capital will be used for accelerated international expansion and expansion of the platform. ETF Partners led the round, with participation from Rethink Ventures, zu na mi, and Raspberry Ventures.
Relectrify Raises $11.3M in Series B Funding. Relectrify is developing battery cells that don’t require inverters and that provide greater energy capacity and lifespan. At One Ventures led the round and was joined by Toyota Ventures, Virescent Ventures, Energy Innovation Capital, GS Futures, Creative Ventures, and NOAB Ventures.
OneOrder Raises $16M in Series A Funding. OneOrder provides logistics and supply chain tech solutions for hotels, restaurants, and catering companies in Egypt. The capital will be used to expand into the greater Gulf Cooperation Council region, build financing solutions, and further develop the platform. Delivery Hero Ventures led the round, with participation from Norrsken22, Nclude, and A15.
Orca AI Raises $23M in Funding. Orca AI is a platform aimed at maximizing voyage safety, efficiency, and sustainability for ships and fleets with advanced monitoring tech. OCV Partners and Mizma Ventures led the round, with participation from Santa Barbara Venture Partners and Playfair Capital.
Reibus Raises $30M in Funding. Reibus is a metals marketplace aiming to “revolutionize the industrial metals supply chain”. The funding is a combination of equity and debt from existing investors, including Canaan and Nosara, with HSBC as the banking partner.
Infra.Market Raises $50M in Funding. Infra.Market is a procurement platform for construction and real estate firms. The funding comes from MARS Unicorn Fund, a joint venture between Liquidity Group and Japanese bank MUFG.
Syre Raises $100M in Series A Funding. Syre is creating a circular polyester product based on recycled textile. The capital will be used to finance the construction of the blueprint plant in the US as well as to establish its first two gigascale textile-to-textile recycling plants. TPG Rise Climate led the round, with additional participation from H&M Group, Giant Ventures, and others.
Realtime Robotics Raises Series B Funding. Realtime Robotics is an automation optimization software in collision-free motion planning for industrial robots. The funding will be used to further the development of automation software. Mitsubishi is leading the round, with others expected to participate later on.
Zenobe Raises $522M in Financing. Zenobe is a provider of electric vehicle fleet and battery storage services. The capital will be used to accelerate the rollout of electric buses across the UK. Zenobe had most recently raised £147M in debt financing in January.
Who's Hiring? 👩💻
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
Senior Data Scientist at Vizion in Remote.
Full-Stack Engineer at Improvin’ in Stockholm, Sweden.
Product Manager at Skydropx in Mexico (Remote).