Dynamo Dispatch (2024/07/29)
Issue 295 | Didero, Monarch Tractor, Lineage
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 💭
While the bright spot in the supply chain industry last week was certainly the IPO of the cold storage giant Lineage, there was also a string of bad news that came out across the supply chain. That includes freight layoffs, lower consumer spend, and manufacturing overcapacity overseas. Read more all about it below.
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Supply Chain 📦
⭐ Why a Cold-Storage Company Just Delivered the Year’s Hottest IPO. Cold storage giant Lineage went public with the largest US IPO of the year, raising $4.4B and valuing the company at over $18B. Founded in 2008, Lineage has become the world’s largest temperature-controlled warehouse operator, handling logistics for major clients like Kraft Heinz and Walmart. The company’s rapid growth is attributed to its acquisition strategy and technological advancements that enhance efficiency in storing and transporting perishable goods. The IPO highlights Lineage’s critical role in the US supply chain, especially as demand for cold storage surged due to the pandemic. On the other hand, More Layoffs at Freight-Related Firms: 607 Workers Cut Across Four States and UPS’s Stock Has Its Worst Day Ever After Earnings Miss As Package Volume Fell.
Cost-of-Living Crisis Hits Sales of Food, Cars, Luxury Goods. A global shift away from post-pandemic "revenge spending" is starting to affect companies' financial performance. From food producers to automakers and luxury brands, many firms are reporting lower sales and profits as consumers cut back on spending. Nestle, Unilever, Stellantis, Whirlpool, and major airlines have all lowered their financial outlooks, citing reduced consumer spending. Even the luxury sector is feeling the impact, with brands like LVMH and Burberry noting weaker sales, particularly in China. It’s a trend that could foreshadow a slowdown for the broader economy. Elsewhere, FedEx to Cut Daytime Domestic Flight Activity By 60% and UPS to Acquire Mexican Delivery Company Estafeta.
Feared in the West, China’s Manufacturers Struggle at Home. Western companies face challenges due to a surge in cheap Chinese goods, while Chinese manufacturers struggle with overcapacity and weak demand. Jiangsu Lopal Tech, a lithium iron phosphate supplier, reported significant losses due to market oversaturation and reduced domestic demand. An issue of overcapacity and weak demand is widespread in China, with many companies slashing prices and profits as Beijing focuses on boosting industrial capacity rather than stimulating consumption. Consequently, Chinese firms are increasingly relying on exports, leading to trade tensions and barriers from other countries. Related, High Ocean Demand from Asia Shows Signs of Peaking.
Rolls-Royce Boss Warns of Prolonged Supply Chain Strains. The aerospace industry is facing severe supply chain challenges that may persist for another two years, says Rolls-Royce CEO Tufan Erginbilgic. These issues include shortages of skilled labor and parts, exacerbated by the industry's rapid recovery and growing demand post-COVID. Despite the challenges, demand for air travel and new aircraft remains strong, with major orders placed by airlines such as Japan Airlines, Virgin Atlantic, and Qatar Airways. Industry leaders are now more openly acknowledging these supply chain issues and investing in improvements. On the water, Suez Canal Revenue Dropped $2B Last Year Due to Red Sea Security Crisis.
Kodiak Robotics Is Taking Self-Driving Trucks Off-Road To Reach Profitability Faster. Self-driving truck startup Kodiak Robotics discovered a new market opportunity with a $50M US DoD contract for unstructured, off-road environments. The potential for a faster path to market than highway trucking led Kodiak to partner with Atlas Energy Solutions to launch a fully driverless commercial trucking service by late 2024 or early 2025 for 24/7 sand-moving operations in Texas. Other autonomous driving startups are also exploring off-road niches to secure quicker revenue streams and military contracts. For other innovation, Port of Long Beach Breaks Ground on $1.6B ‘Green Gateway’ Rail Expansion.
Mobility 🚗
⭐ The UK Brings the ICE Phase-out Back on Track The new Labour government, under Prime Minister Sir Keir Starmer, had pledged to reinstate the 2030 deadline during their election campaign, which aligns with their commitment to an industrial strategy and the Automotive Sector Plan. The Society of Motor Manufacturers & Traders (SMMT) highlighted the industry's crucial role in achieving net zero emissions, noting that BEVs recently reached a market share of 19% in June. The decision to uphold ZEV mandates while pushing back the phase-out date of combustion engines has been criticized by carmakers, who argue it complicates the sale of EVs. For more, DfT Confirms Ban on Sale of New Fossil Fuel Cars from 2030.
Waymo Secures $5B Investment, Forges Ahead in Self-Driving Taxi Race. Waymo will receive an additional $5B investment from its parent company Alphabet, as announced by CFO Ruth Porat during the Q2 2024 earnings call. This multi-year investment reflects Alphabet's satisfaction with Waymo's progress, which includes over 2M trips and 20M fully autonomous miles on public roads. CEO Sundar Pichai highlighted that Waymo now delivers over 50K weekly paid rides, primarily in San Francisco and Phoenix, and has expanded to commercial driverless rides in Los Angeles and soon in Austin. Waymo's dominance in the self-driving taxi market was solidified after a major setback for its competitor, Cruise, following a severe incident, leading to Cruise's suspension in California and allowing Waymo to take the lead. Related, GM’s Cruise is Giving Up On Self-Driving Cars Without Steering Wheels.
Elon Musk Says Plans for Mexico Production Will Depend on US Election. Elon Musk announced that Tesla will halt further investment in its planned Mexico factory until after the US election, citing political risks from Donald Trump's tariff pledges. This marks one of the first times Musk has made business decisions explicitly based on US presidential race outcomes, particularly concerning potential tariffs on Mexico-made goods. The decision underscores the political uncertainties facing Mexico, which is eager to benefit from President Biden's nearshoring policies, and raises concerns about the future growth of the EV industry supported by the Inflation Reduction Act. Musk's endorsement of Trump and his potential financial contributions to Trump's campaign add another layer of political influence on Tesla's business strategy. In more Tesla news, Tesla’s Auto Woes Crash Elon Musk’s AI Dreams.
Ford Stock Tumbles Following Profit Miss; No Improvement to Full-Year Guidance. Ford's stock dropped over 11% in after-hours trading following its second-quarter profit miss and failure to raise full-year profit guidance. The company reported revenue of $47.8B, surpassing estimates, but fell short on adjusted EPS and EBIT expectations, posting $0.47 and $2.8B, respectively. Ford maintained its full-year adjusted EBIT guidance of $10B to $12B but increased its adjusted free cash flow forecast by $1B. The commercial unit, Ford Pro, showed strong profitability, while the EV division, Model e, continued to incur significant losses, highlighting the mixed performance across different segments of the business.
China's BYD Widens EV Lead over Tesla in Singapore, Southeast Asia, Data Shows. In the first half of this year, China's BYD widened its sales lead over Tesla in Singapore, highlighting the growing competition Tesla faces from Chinese EV makers. BYD's aggressive expansion in Southeast Asia, including significant marketing efforts and new store openings, contrasts with Tesla's challenges. BYD's EV sales in Singapore surged 83%, reaching 2,587 units, while Tesla sold 969 units, just 28 more than last year. Despite similar pricing, BYD's strong performance in Singapore and other Southeast Asian markets underscores its ambition to dominate the region, where Tesla's market share has declined. Related, Chinese EV Startups are Spending More on Research than Tesla Is.
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 💸
FreshX Raises $2.7M in Pre-Seed Funding. FreshX is a cold-chain logistics pricing and scheduling startup. The capital will be used to address the reefer LTL space. Investors include Valor Equity Partners, Caruso Ventures, LongJump, OCA Ventures, Origin Ventures, and others.
Terrantic Raises $3.5M in Seed Funding. Terrantic is an agtech startup helping food growers, packers, and processors improve the quality and yield with a centralized data platform. The capital will be used to fuel the development of its software platform. Supply Change Capital led the round, with participation from York IE, Vitalize Venture Capital, and Array Ventures.
Didero Raises $7M in Seed Funding. Didero is using AI to solve supply chain management at mid-market companies. The company will use the funds to expand operations and development efforts. The round was led by First Round Capital with participation from Construct Capital, AI Grant, Box Group, Company Ventures, and Conviction.
Sojo Industries Raises $10M in Series A Funding. Sojo Industries uses robotics and automation to lower costs and track food in the food and beverage manufacturing process. The funding will be used for product development and expanding operational capabilities. The funding comes from Schreiber Ventures and Tech Council Ventures. The round was led by Greenoaks.
The Bouqs Company Raises $23M in Venture Funding. The Bouqs Company is a DTC floral delivery company. The capital will be used to accelerate its retail growth and other new initiatives. CrowdOut Capital led the round.
Addionics Raises $39M in Series B. Addionics is the developer of cost-efficient EV batteries. The funding will be used to boost manufacturing capacity. The round was co-led by GM Ventures and Deep Insight, with participation from Scania.
Mytra Raises $78M in Series B Funding. Mytra offers 3D robots and a software platform optimizes bot routes, manages inventory, and continuously learns and improves to automate moving and storing material.
Monarch Tractor Raises $133M in Series C Funding. Monarch Tractor produces electric, autonomous tractors. The funding will enable the company to produce more tractors, support customers through sales and service, and expand into additional states. The round was co-led by Astanor and HH-CTBC Partnership.
Applied Intuition Raises $300M in Secondary Deal. Applied Intuition in a vehicle software maker. The secondary allows shareholders and employees to sell shares at a $6B valuation. Fidelity Management, General Catalyst, Lux Capital, and Bond all participated in the deal.
Lineage Raises $4.4B in IPO. Lineage is the largest cold-storage company in the world by capacity. After the IPO, the stock price climbed as much as 5% at a valuation of about $20B. Morgan Stanley had the lead role on the listing.
Apollo Acquires Evri £2.7B. Apollo is a US investment and private equity firm. Evri is a UK parcel delivery company and a key rival to the Royal Mail. Evri stands out as well positioned with its technology and infrastructure that’s purpose-built for reliable, lower emissions delivery in the fast-growing eComm market.
Who's Hiring? 👩💻
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
QA Intern at Plus One Robotics in Boulder, CO.
Operations Agent at Skydropx in Bogota, Colombia.
Risk & Compliance Specialist at Sennder in Madrid, Spain.