Dynamo Dispatch (2024/08/12)
Issue 297 | Lucid, Flyr, Yodel
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 📦
⭐ Trucking Industry Shows Signs of Life After Long Downturn in US. The US trucking industry is beginning to recover from a severe downturn, with demand for shipments rising by 9% year-over-year in Q2 2024. However, rates remain low due to excess capacity and high costs. Despite the industry's struggle with oversupply and rising operational expenses, including increased insurance and maintenance costs, optimism is building for rate improvements in 2025, particularly if interest rates decline. Smaller carriers, which dominate the market, have largely survived due to cash reserves from the pandemic surge, but many are exiting the industry. This is leading to predictions of tighter capacity and potential rate increases. However, the recovery is expected to be gradual, with larger carriers waiting for smaller firms to exit before making significant changes. For more, Stronger Freight Demand May be Around the Corner, Broker Survey Says.
US Ports by Volume: How Maritime Cargo Trends Are Stacking Up. Seaport volumes are a key indicator for understanding trade trends, as maritime gateways handle a significant portion of international freight. During the pandemic, US seaports saw a surge in cargo volumes, reaching over 53M twenty-foot equivalent units (TEUs) in 2021 and 2022, causing congestion and delays. By 2023, volumes at the top 12 US ports normalized to pre-pandemic levels, slightly exceeding the 2019 record with 46.67M TEUs. Related, South Korea Tops China for Shipbuilding Orders as Competition Heats Up and Trans-Atlantic Ocean Carriers Make Rare Surcharge Moves to Bolster Rates.
US Tops China as Germany's Biggest Trading Partner. In the first half of 2024, the United States surpassed China as Germany's largest trading partner, driven by Berlin's efforts to reduce reliance on Beijing and a strong US economy. German trade with the US totaled approximately €127B, compared to €122B with China. This shift follows a trend where China had been Germany's top partner for eight consecutive years until the US took the lead this year. Exports to the US increased by 3.3%, while trade with China decreased, reflecting broader geopolitical uncertainties and economic fluctuations. Completely unrelated, Food Suppliers Navigate Climate Change-Induced Crop Shortages.
Maersk Says Companies are Bringing Orders Forward on US-China trade War Threat. Retailers and manufacturers are advancing their orders due to concerns about a potential intensification of the US-China trade war under Trump, potentially exacerbating existing supply chain disruptions. Vincent Clerc, CEO of Maersk, noted that customers are ordering Christmas goods earlier than usual, driven by fears of disruption and trade tensions. Despite global supply chains only recently recovering from COVID-19 impacts and ongoing Red Sea disruptions, Maersk has raised its financial outlook for 2024 due to sustained trade growth and expects strong demand to continue. The company remains cautious about future demand resilience and is exploring acquisitions in land-based logistics to diversify beyond container shipping. Elsewhere, Amazon Develops China Seller Network to Take on Temu, Shein.
Amazon is Fumbling in India. Two years ago, a VC firm hesitated to invest in an Indian quick-commerce startup due to concerns that Amazon might dominate the market, but Amazon's decision not to enter the quick-commerce space is now seen as a significant oversight. The quick-commerce sector in India, led by firms like Blinkit, Zepto, and Swiggy's Instamart, is growing rapidly, capturing a substantial market share and generating $4.5B in annual sales, which is a quarter of Amazon India's sales. Despite the booming quick-commerce market, Amazon has failed to adapt, losing market share in India to competitors like Flipkart and Meesho, as it shifts focus to its cloud business under Andy Jassy's leadership. Analysts believe Amazon's slow response to the evolving market and regulatory challenges has hindered its growth in India's dynamic eCommerce landscape. Also, Amazon India Head Mnish Tiwary Resigns.
Mobility 🚗
⭐ Tracking US Auto Sales by Month. In early 2024, auto sales were impacted by persistent inflation, causing consumers to prioritize affordability, which has slowed the transition to EVs due to high manufacturing costs. While sales of EVs, especially hybrids, have seen double-digit growth, their volumes are still too small to significantly impact automakers' profits. Some automakers, like Subaru and Mazda, reported increases in July sales, while others, like Volvo and Kia, experienced declines, though with notable growth in their hybrid and EV segments. Ford saw a slight decrease in overall sales, with its internal combustion engine (ICE) vehicles still dominating, despite growing interest in its electric and hybrid models.
China Files WTO Complaint Against EU Over Tariffs on Electric Vehicles. China has filed a complaint with the WTO against the EU over tariffs imposed on Chinese-made EVs, which the EU claims benefit unfairly from government subsidies. China argues that its support for the EV industry complies with WTO rules and that the EU tariffs undermine global cooperation on climate change. The two parties have until early November to resolve the dispute before the provisional tariffs become official. In response, China has initiated investigations into French cognac and European pork exports, raising concerns about a potential trade war between China and the EU. Completely unrelated, US Auto Regulator Opens Probe into Over 330,000 Hyundai SUVs Over Seat Belts.
Rivian Lost $1.46B in Q2 as it Drives Toward a VW-Linked Future. Rivian reported a financial loss of $1.46B in Q2 2024, slightly higher than its Q1 loss and significantly worse than the same period last year. The company’s cash reserves stood at $5.76B, partly bolstered by an initial $1B from a potential $5B deal with Volkswagen. Rivian has begun shipping more cost-efficient versions of its R1 vehicles, which it hopes will help achieve positive gross profit by the end of 2024, but it is banking on the success of its upcoming R2 SUV, expected in 2026, to establish long-term sustainability. The partnership with VW, set to finalize later this year, will also play a crucial role as Rivian’s technology will be integrated into VW’s EVs and potentially other automakers' vehicles. Related, Rivian Sees Supply Chain Tailwinds from VW Deal and Rivian Already Sees Tailwinds from VW Partnership.
China’s Sales of EVs, Hybrids Surpass Conventional Cars in July. In July, sales of EVs and hybrids in China exceeded those of ICE cars for the first time, accounting for 51.1% of all passenger vehicle sales. Despite an overall decline in car sales, EVs and hybrids saw a 37% increase from the previous year, while conventional car sales dropped by 26%. The growth in new-energy vehicles is attributed to China's advanced EV technology and enhanced government incentives aimed at encouraging car replacements. Although overall consumer sentiment remained weak, the industry anticipates stability in the auto market in August with continued strong demand for car replacements. Elsewhere in electric transport, This New Charger Lets All EVs Plug In Without an Adapter and Ola Electric Jumps by 20% After Biggest India IPO in Two Years.
Robotaxi Dreams Hitting Wall of Reluctance and Delays. The optimistic vision for the robotaxi market faces significant skepticism as industry experts question whether driverless taxis will become a major transportation solution or remain a niche market. Despite predictions of rapid market growth, from $400M in 2023 to $45.7B by 2030, major challenges such as regulatory hurdles, safety concerns, and technological limitations persist. While companies like Tesla, Waymo, and others are investing heavily in the technology, the slow pace of regulatory approval and public acceptance suggests a more gradual market development. Completely unrelated, Testing the BMW iX5 Hydrogen: It Works – But is it Convincing?
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 💸
Chaiz Raises $3.7M in Seed Funding. Chaiz is a comparison marketplace for extended car warranties. The funding will be used for product development and expanding coverage beyond vehicles to items such as RVs, motorsports, and home appliances. The round was led by ResilienceVC. Anker Capital, Automotive Ventures, Everywhere Ventures, FJ Labs, Monte Carlo Capital, Never Lift Ventures, RedBlue Capital, and Springtime Ventures also participated.
Agrizy Raises $9.8M in Series A Funding. Agrizy provides an online marketplace for agricultural products to connect farmers directly with buyers. The round will be used for product and market expansion. Accion and Omnivore led the round and were joined by Capria Ventures, Thai Wah Ventures, and existing investor Ankur Capital.
Datch Raises $10M in Series A Funding. Datch is building voice assistants for workers on the factory floor. The funding will be used to grow operations and further develop the software. Blackhorn Ventures led the round.
H3X Raises $20M in Series A Funding. H3X develops power-dense, compact electric motors for aerospace and marine applications. The funding will enable scaling of production and operations to deliver on contracts in the pipeline. The round was led by Infinite Capital with participation from Hanwha Asset Management, Cubit Capital, Origin Ventures, Industrious Ventures, Venn10 Capital, and follow-on investors Lockheed Martin Ventures, Metaplanet, Liquid 2 Ventures, and TechNexus.
3V Infrastructures Raises $40M in Funding. 3V Infrastructures provides EV charging infrastructure particularly in long-dwell properties like multifamily housing and hotels. The funding will be used to expand Level 2 charging. Greenbacker Capital Management led the round.
Octane Raises $50M in Series E Funding. Octane provides financing options for purchasing vehicles such as motorcycles and ATVs. The round will enable the company’s market expansion. Valar Ventures led the round and was joined by Upper90.
Seeq Raises $50M in Series D Funding. Seeq develops advanced analytics software for industrial process manufacturing to optimize operations. The round was led by Sixth Street Growth with participation from existing investors Insight Partners, Altira Group, Second Avenue Partners, and Saudi Aramco Energy Ventures.
Placer.ai Raises $75M in Funding. Placer.ai is a location analytics and foot traffic data platform. The capital will be used for business development and to add more datasets to the platform. New investors were not disclosed, but the round included existing investors such as MMC Technology Ventures, Fifth Wall Ventures, Array Ventures, and others.
Yodel Raises £85M in Funding. Yodel is a UK delivery firm that competes in the eComm parcel market. The capital will be used to automate operations, modernize infrastructure, and capitalize on the surging demand for out-of-home deliveries. Investors include PayPoint and Independent Growth Finance.
Flyr Raises $225M in Series D Funding. Flyr is a modern airline retail company whose AI-powered platform helps airlines offer dynamic pricing, personalized offers, and other digital products. The capital will be used for growth and scaling. WestCap led the round and was joined by BlackRock, Streamlined Ventures and the airline Avianca. This comes alongside debt financing from Vista Credit Partners.
Lucid Raises $1.5B in Funding. Lucid is a luxury EV maker. The cash infusion will fuel capital expenditures and working capital. The funding comes from existing backer Ayar Third Investment Co.
FleetPulse Raises Undisclosed Amount in Venture Funding. FleetPulse is a trailer telematics developer. The funding will be used to enhance its development of products and expedite product commercialization. Investors include NFI Ventures and Ironspring Ventures.
Exicom Acquires Tritium for $30M. Exicom is an Indian EV charger manufacturer. Tritium designs and manufacturers proprietary hardware for DC fast charging. As Tritium has sold 13,000 fast chargers across 47 countries, the acquisition will expand Exicom’s global reach beyond Asia, Africa, and the Middle East, unlocking meaningful long-term growth.
GrubMarket Acquires Good Eggs. GrubMarket is an eCommerce company offering produce and grocery logistics for the US’ food supply chain industry. Good Eggs is a fresh food delivery startup. The acquisition is intended to strengthen GrubMarket’s eCommerce capabilities and expand its footprint in the consumer market.
Korber Supply Chain Software Acquires MercuryGate. Korber Supply Chain Software is a Germany-based joint venture between strategic management holding company Korber AG and KKR with a portfolio of solutions across all supply chain execution operations. MercuryGate is TMS provider known for its capabilities in multimodal optimization and execution. Korber wants to focus on seamless integration between OMS, WMS, and TMS capabilities.
Who's Hiring? 👩💻
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
Customer Success Manager at Factored Quality in New York, NY.
Backend Developer at Rouvia in Berlin, Germany.
People Operations Generalist at Stord in Union City, GA.