Dynamo Dispatch (2024/06/24)
Issue 291 | Coyote Logistics, Zepto, Waabi
Dynamo Dispatch. A weekly update from Dynamo Ventures covering the latest and greatest in supply chain, mobility, and building venture-scale businesses.
đ„ Have you seen any interesting startups recently? Introduce us.
đïž If you were forwarded this and found it interesting, please sign up.
đ Check out Dynamo's podcast series, The Future of Supply Chain.
đ€Â Interested in meeting with Dynamo? Schedule here with Derrek and Madelyn.
Weekly Commentary đ
đ„Â Dynamo portfolio company Raft has now crossed a number of key milestones, reaching over 5B data points and labeled logistics documents training Raft AI and having processed $10B in freight invoices. Raftâs AI allows users to configure shipments, flows, processes, events, and tasks and then intelligently interact with various systems of record, whether that be the TMS, CRM, and/or ERP. Weâre incredibly proud of the accomplishments of the Raft team thus far and look forward to how theyâll continue to transform logistics through AI.
đ„°Â Love reading the Dispatch? Make sure you forward it to anyone looking to stay up to date with all things supply chain and mobility.
We Are Dynamo,
Madelyn, Derrek, and the rest of the Dynamo team
Note: please add âdynamo@substack.comâ to your email client, so you donât miss future issues due to aggressive spam filters.
Supply Chain đŠ
â FAA Investigates Titanium in Boeing, Airbus Jets Lacking Proper Documentation. The FAA and European regulators are investigating the use of titanium with falsified documentation in Boeing and Airbus planes, supplied by Spirit AeroSystems. Both companies assure that safety has not been compromised after extensive testing confirmed the material's integrity. The issue underscores concerns about counterfeit parts entering the aviation supply chain, prompting manufacturers and regulators to bolster oversight. This comes as Boeing faces ongoing scrutiny, including investigations into manufacturing processes and supply chain integrity. In breaking news on Sunday, RXO Agrees to Buy UPS Unit Coyote Logistics for $1B.
This Mexican Port Is Angling to Be a Nearshoring Gateway. The Guaymas Port in Mexico is being repositioned as a transport hub to accelerate nearshoring, supported by a $220M federal investment and a deal with the Port of Antwerp-Bruges International. Previously focused on moving minerals, the port aims to transform into a nearshoring hub. Ford Motor will start a pilot project exporting 2K cars from Guaymas to Chile, reducing highway transport by 3.3K kilometers per vehicle. This initiative is part of a broader strategy to boost Mexicoâs GDP and attract foreign investment. Across the world, DP World Plans $3B African Ports Investment by 2029 and Philippines Plans 17 New Ports to Boost Agricultural Supply Chain.
Solar Energy Faces Cloudy Prospects on Warehouse Rooftops. Industrial real estate firms are increasingly exploring solar panel installations on warehouse roofs to cut energy costs and generate revenue, despite concerns about high costs and potential roof damage. Creative agreements, such as leasing roof space to solar-energy operators, are making these investments more attractive by offsetting risks and providing new revenue streams. However, the financial viability of these installations varies by location, with higher electricity costs and sunnier climates offering better returns. Companies like Prologis are leading the charge, aiming to significantly increase their solar power capacity, though current installations cover only a small portion of their global portfolio. Relatedly, California Fines Amazon Nearly $6M, Alleging Illegal Work Quotas at Two Warehouses.
US Logistics Inflation Remains High Despite 11% Drop in Costs. US business spending on logistics services fell 11% to $2.4T in 2023 as supply chains normalized post-COVID. Despite the drop, logistics costs remain high, with a logistics-to-GDP ratio of 8.7%, indicating inefficiencies. Kearneyâs "State of Logistics" report highlights the importance of investing in flexible, resilient supply chain networks amid persistent volatility. Tightening capacity and rising rates are projected for 2024, and companies are exploring innovative logistics models to enhance efficiency and profitability amid these challenges. Unrelatedly, California is Finally Awash in Water, But Its Farmers Canât Get It.
USDA Avocado Inspectors Will Start Returning to Mexican Packing Plants After Suspension. After a suspension due to security concerns, the US announced the gradual resumption of US Agriculture Department inspections of avocados and mangos in Michoacån, Mexico. The decision follows an incident where two USDA inspectors were assaulted and detained in Michoacån. While the inspectors were later released, the US.halted inspections to reassess safety protocols. Mexican President Andrés Manuel López Obrador has pledged to enhance safety measures for inspectors as the suspension has raised concerns among local producers about future security measures. In other cross-border news, Averitt Prepares for Mexico Nearshoring Boom with Expansion in Texas.
Mobility đ
â Europeâs EV Battery Plans Are Getting Crushed by China, US. Five years ago, France and Germany invested billions of euros to boost Europeâs battery industry to compete with China and the US, but this effort is now faltering. With slowing EV sales, companies like Volkswagen, Stellantis, and Mercedes-Benz are scaling back or refocusing their battery projects, while China continues to dominate with lower costs and advanced technology. Additionally, the US is attracting investment through substantial subsidies, further challenging Europeâs position in the EV battery market. As a result, Europe risks falling further behind in the race to develop and power future EVs, compounded by potential retaliatory actions from China in response to proposed EU tariffs on electric cars. Also, BMW Cancels $2B Battery Cell Order from Northvolt and Europeâs EV Slump Seen Ending Next Year on New Rules, Cheap Cars.
Fisker Files for Chapter 11 Bankruptcy. Fisker has filed for Chapter 11 bankruptcy after experiencing significant financial difficulties. The company is in discussions with financial stakeholders for debtor-in-possession financing and the sale of its assets. Fisker had attempted to boost sales by shifting from a direct-to-consumer model to selling through dealers, but continued to struggle financially, ultimately reporting a loss of $762M in 2023. The company has appointed John DiDonato as Chief Restructuring Officer to oversee its budget and the sale of its assets, intending to use the proceeds to cover its outstanding debt while maintaining reduced operations. For more, Fisker Failed Because it Wasnât Ready to be a Car Company.
China Says EU Mandated its EV Firms Turn Over 'Unprecedented' Amounts of Data. The European Commission demanded extensive information on Chinese automakers' supply chains during its investigation into subsidized EV imports from China, according to China's commerce ministry. Following the probe, the Commission imposed additional duties on Chinese EV imports, leading to accusations of spying and criticism from Beijing. The Commission required Chinese automakers to disclose details about raw material sourcing, component manufacturing, pricing, and sales development. In response, China has initiated a dumping investigation into EU pork imports, while Chinese automakers like SAIC, deemed uncooperative, will face tariffs of 38.1% once provisional duties begin in July.
Car Dealers Are in Turmoil as Cyber Incidents Strike Software Provider. Thousands of US car dealers lost access to CDK Global's software, disrupting their sales and repair operations due to cyber incidents affecting the technology provider. CDK Global, which supplies software to nearly 15,000 dealers, shut down most systems to assess the situation and had no estimated time frame for resolution, leaving dealers to use manual processes. The National Automobile Dealers Association and affected dealers are seeking more information from CDK to address the issue. The disruptions highlight the critical dependence on integrated technology for dealership operations and the ongoing threat of cyberattacks in the industry. For more, Single Point of Software Failure Could Hamstring 15K Car Dealerships for Days.
Stellantis to Shift Some Chinese EV Production to Europe. Stellantis is shifting the production of some Chinese-brand EVs to Europe following the EU's announcement of additional tariffs on Chinese-made EVs. Stellantis plans to assemble certain Leapmotor products in Europe, aiming to mitigate the impact of these tariffs and improve competitiveness. Other Chinese carmakers, such as BYD and Chery, are also increasing their European production capacity in response to the new tariffs. The tariff proposals have highlighted a divide in the European automotive industry, with German carmakers opposing the tariffs due to their reliance on the Chinese market, while French and Italian groups support them to protect the European market from cheaper Chinese models. Related, China's Leapmotor Has Started EV Production at Stellantis' Polish plant, Jefferies Says and elsewhere on Stellantis, Stellantis Recalls Nearly 1.2M Vehicles Over Glitch Affecting Cameras.
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
Pull Logic Raises Seed Funding. Pull Logic is seeking to address the challenge of inventory distortion through an algorithm which helps predict how a SKU contributes to meeting future customer demand. The funding comes from Silicon Road Ventures, Fintech Ventures Fund, and Pax Momentum.
NEXX Global Raises Seed Funding. NEXX Global is a robotics-driven warehousing logistics operator. The funding will be used to bolster the AI capabilities of its platform. CK Asset Holdings led the round.
Unusuals Raises âŹ1M in Seed Funding. Unusuals uses AI to drive digitization of the maintenance of linear structures in the electrical and railway industries. The funding will be used to continue development of its product and expand internationally. Elewit and Terna Forward led the round.
BuildBuddy Raises ÂŁ1M in Seed Funding. BuildBuddy is an online platform aiming to transform the purchase process for construction materials. The funding will be used to support the broader rollout of the platform.
Droppe Raises âŹ3.9M in Funding. Droppe is a B2B distribution platform provider to source, order, and manage supplies such as safety, paper, workwear, and packaging. The funding will be used to expand operations and its development efforts. OpenOcean led the round, with participation from Miki Kuusi, Ilkka Paananen, Robert Gentz, Marianne Vikkula, and Lifeline Ventures.
Kinetic Raises $21M in Series B Funding. Kinetic uses a robotic system, computer vision, and machine learning software to diagnose and recalibrate the sensors and software in EVs and other modern cars in order to decrease the costs associated with repairs. The funding will be used to fuel national expansion, technological development, and operational excellence. Menlo Ventures led the round, with participation from Allstate Strategic Ventures, Liberty Mutual Strategic Ventures and existing backers Lux Capital, Construct Capital and Haystack Ventures.
Molten Industries Raises $25M in Series A Funding. Molten Industries converts natural gas into clean graphite and hydrogen for lithium-ion batteries and clean hydrogen. The company will build its first modular commercial reactor in Oakland with the capital. Breakthrough Energy Ventures led the round with new participation from Sozo Ventures, Mark Heising, and Steelhead Capital, along with existing investors Union Square Ventures, 50 Years, J4 Ventures, Moai Capital, and UVC Partners.
Bitsensing Raises $25M in Series B Funding. Bitsensing provides 4D imaging radars which can be applied to autonomous driving, smart cities, and digital healthcare. The funding will be used to scale operations, invest in R&D, and explore new market opportunities. The round was led by the Korea Development Bank, HL Mando Corporation, Industrial Bank of Korea, Aju Capital, Life Asset Management, and SCL Investment.
LD Carbon Raises $28M in Series C Funding. LD Carbon is a South Korea-based provider of recovered carbon black from scrap tires. The funding will be used to scale operations to recycle end-of-life tires and materials from end-of-life vehicles. Toyotaâs growth fund Woven Capital led the round, with participation from Meritz Securities, Investwith, Industrial Bank of Korea, Hyundai Motor Group Zer01ne, Elohim Partners, and New Main Capital.
NuEnergy Raises $30M in Series A Funding. NuEnergy offers lithium-ion battery direct recycling. The funding will support the companyâs first standalone, full-scale facility. Samsung Venture Investment Corporation and Helium-3 co-led the round.
Finaloop Raises $35M in Series A Funding. Finaloop offers an accounting software for eComm businesses. The funding will be invested in the companyâs automation, its inventory management capabilities, and to expand go-to-market strategies. The round was led by Lightspeed Venture Partners with participation from Vesey Ventures, Commerce Ventures, plus existing backers Accel and Aleph.
GrayMatter Raises $45M in Series B Funding. GrayMatter is an AI-powered robotic startup focused on some of the hardest problems in manufacturing with âphysics-informed AIâ. The funding will be used to scale its LA team and create next-gen AI robotic cells targeting more use cases. Wellington Management led the round.
TIER IV Raises $54M in Series B Funding. TIER IV is a Tokyo-based provider of an open source software for autonomous driving systems. The funding will be used to launch the production of Level 4 autonomous driving systems.
Vecna Robotics Raises $100M in Series C Funding. Vecna Robotics is a provider of flexible material handling automation solutions. The funding will be used to expand ground-to-ground and low-lift workflow capabilities and development of new robots. Investors include Tiger Global, Proficio Capital Partners, and IMPULSE.
Waabi Raises $200M in Series B Funding. Waabi is developing autonomous trucking. The round will enable deployment of autonomous trucks in 2025. The round was led by Uber and Khosla Ventures along with strategic investors Nvidia, Volvo Group Venture Capital, Porsche Automobil Holding SE, Scania Invest, Ingka Investments and more.
Zepto Raises $665M in Series F Funding. Zepto is a Mumbai-based quick commerce, 10-minute delivery startup. The funding will support its target of expanding its network of dark stores to over 700 by March 2025. Glade Brook, Nexus, and StepStone Group co-led the round, with participation from Avenir, Lightspeed, Avra, Goodwater, Lachy Groom, and Contrary.
Antin Infrastructure Partners Acquires Majority Stake in GTL Leasing for $100M. Antin Infrastructure Partners is a PE fund that invests in infrastructure and natural resources. GTL Leasing provides specially designed truck trailers, tanks, and compressors to transport and store hydrogen and other industrial gases. The funding will be used to help GTL expand its offering of cryogenic tanks used to keep compressed hydrogen in liquid state at very low temperatures, easing transportation.
RXO Acquires Coyote Logistics for $1B. RXO Logistics is a leading provider of asset-light transportation solutions including tech-enabled truck brokerage services. Coyote Logistics is a tech-enabled freight brokerage business previously owned by UPS. The acquisition will diversify RXOâs customer base vertical mix as well as consolidate volume of shared customers.
Who's Hiring? đ©âđ»
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
Director of Supply Chain and Procurement at Gatik in Mountain View, CA.
IT Intern at Plus One Robotics in San Antonio, TX.
Account Executive at Zeelo in Boston, MA.