Dynamo Dispatch (2024/08/26)
Issue 299 | Gatik, Opkey, Defcon AI
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 💭
💥 Dynamo portfolio company Gatik, a leader in autonomous middle-mile logistics, has received a strategic investment from NIPPON EXPRESS HOLDINGS. This partnership supports Gatik's efforts to address critical supply chain challenges like driver shortages and inefficiencies by deploying its autonomous technology across North America. Specializing in the often-overlooked routes between distribution centers and retail locations, Gatik's focus on middle-mile logistics allows for faster commercialization and deployment of its autonomous vehicles, setting it apart from long-haul solutions. Congratulations to the Gatik team!
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Supply Chain 📦
⭐ Canada Rail Workers Ordered Back On Job As Teamsters Vow to Appeal Labor Board Decision. The Canada Industrial Relations Board ordered freight trains to resume operations by early Monday morning, ending a dual work stoppage at Canadian National Railway (CN) and Canadian Pacific Kansas City (CPKC) that halted freight shipments across the country. The board's decision imposes binding arbitration on the rail companies and the 9,300 workers involved, but the Teamsters union plans to appeal the ruling in court, arguing it sets a dangerous precedent for workers' rights. The labor dispute centered on issues like rest periods, shift lengths, and worker safety, with the union accusing the companies of trying to undermine these protections. While CN and CPKC have begun preparations to resume operations, full recovery of the supply chains could take several weeks due to the phased shutdowns that began two weeks prior. Unrelated, TSMC Breaks Ground on German Fab, First European Plant.
A $2 Trillion Reckoning Looms as Ports Become Pawns in Geopolitics. Maritime ports, historically crucial for global trade and geopolitics, are now at the center of intense global competition and transformation. These ports are responsible for handling 80% of the world's $25 trillion in annual trade, now are undergoing costly upgrades in digital technology, automation, and green energy, costing an estimated €200B. Countries and companies are investing heavily to modernize these ports as geopolitical assets. This shift reflects the increasing importance of ports in global power dynamics, economic security, and the movement toward sustainable infrastructure. As for trucking, Cargo Thefts Jumped 49% in the First Half of 2024 and Paccar Downgrades Trucking Industry Sales Projections.
UPS Plans Surge Fee For All China-to-US Imports. UPS will introduce a new "Surge Fee" on US imports from China and several other countries starting September 15. The fee will be $0.50 per pound for shipments from China, Hong Kong, and Macau, and $0.25 per pound for shipments from ten other countries, with no specified end date. Experts expect FedEx to introduce a similar surcharge soon. The surcharge aims to cover the additional costs UPS incurs due to high shipping volumes, particularly from Asia-based eComm platforms like Temu and Shein, whose shipments are less profitable. Additionally, Union Pacific Railroad Joins Peers in Assessing Peak Season Surcharges for Southern California.
Clean Fuel Startups Were Supposed to Be the Next Big Thing, Now They Are Collapsing. Startups aiming to create clean fuels for planes, ships, and trucks are struggling, with several high-profile companies shutting down or scaling back due to high costs, logistical challenges, and delays in government subsidies. For example, a United Airlines-backed company that planned to turn trash into jet fuel has reportedly shut down, while Chevron, BP, and Shell are pulling back on biofuel projects. High costs, supply chain disruptions, and competition for renewable electricity are making it difficult for these startups to survive, threatening progress toward reducing emissions in critical industries like aviation and shipping. However, US SAF Projects receive $291M in Federal Funding.
Auto Parts Executive Slams China’s Alleged End Run Around US Tariffs. David Rashid, executive chairman of auto parts maker Plews and Edelmann, discovered that China-based Qingdao Sunsong Co. was allegedly evading US tariffs by transshipping goods through Thailand. Rashid used a variety of investigative methods including hiring Mossad agents to gather evidence showing that Sunsong was shipping products from China to Thailand and then directly to the US without unloading. This case has drawn attention from US officials, with Homeland Security raiding a Sunsong subsidiary in Ohio as part of a federal investigation. While Rashid advocates for stricter anti-dumping duties and legal consequences for such practices, critics argue that tariffs on Chinese goods can raise costs for US businesses and consumers. For more China news, China’s Maritime Trade Dominance Plows Through Tariff Turbulence and China-Mexico Flights Reopen Amid Manufacturers’ Latin American Push.
Mobility 🚗
⭐ Cruise’s Robotaxis are Coming to the UberAapp in 2025. Cruise has signed a multi-year partnership with Uber to introduce its robotaxis on Uber’s ride-hailing platform by 2025. This partnership comes as Cruise prepares to reintroduce its autonomous vehicles after a safety incident in 2023 that led to the suspension of its operations in California. Cruise has been gradually resuming manual testing of its robotaxis in cities like Phoenix, Dallas, and Houston, and is working closely with regulators to relaunch its services. Uber, which has already partnered with Waymo and other autonomous vehicle companies, sees this collaboration as a way to scale AV deployment by leveraging its extensive ride-hail network. Completely unrelated, UAW Threatens Potential Strike Against Stellantis Alleging Company is Going Back on Commitments.
DOE Doles out Another $50M to Support EV Manufacturing. The DOE will provide $50M to six states to support the conversion of manufacturing facilities for the EV supply chain, as part of the $2B Domestic Automotive Manufacturing Conversion Grants program. This funding aims to preserve and create union jobs at small- to mid-sized suppliers, ensuring that the automotive workforce can transition to the emerging EV industry. Additionally, the DOE announced $1.5M to support technical assistance teams that will help internal combustion engine suppliers adapt their business models to the EV sector. For more, 6 States Eligible for $50M in Funding to Strengthen US EV Manufacturing .
US Regulators Close Probe of GM’s Cruise Self-Driving System. The NHTSA has concluded its investigation into GM's Cruise autonomous-driving system after a software recall addressed hard braking concerns. The probe, initiated in December 2022, closed with no crashes or injuries from immobilization incidents reported. Despite 10 hard braking-related crashes, only four caused injuries. This marks a positive development for Cruise, which has faced regulatory scrutiny, including the suspension of its self-driving permit in California after a serious incident in San Francisco. Related, GM's Cruise Recalls Nearly 1,200 Robotaxis to Close US Probe.
Ford Slows EV plans, Delaying Pickup and Axing Three-Row SUV, to Cut Costs. Ford has revised its EV strategy, canceling a planned three-row electric SUV and delaying the next electric F-150. The company is now focusing more on hybrids and electric commercial vehicles, including a new mid-sized pickup and van. Ford is also moving some battery production to the US for IRA incentives and reducing EV capital spending from 40% to 30%. Critics still question Ford's adaptability and EV profitability. Elsewhere in Ford news, Ford Issued 6 Recalls this Month for up to 200k Vehicles.
Chinese EV Maker BYD Seeks State Incentives for New Mexico Plant Amid US Pressure: Report. BYD has narrowed down potential locations for its new manufacturing plant in Mexico to three states and is currently assessing various incentive proposals from each. The company is considering factors such as fiscal incentives, urban infrastructure, and logistics before making a final decision. The plant is expected to initially produce 150,000 units, with plans to eventually increase capacity to 400,000-500,000 units, focusing on the Mexican market without immediate plans for US market entry. Related, How China Became the Leading Car Supplier to Mexico and What it Means for the US.
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 💸
💥 Gatik Raises Strategic Funding. Gatik is a leader in autonomous middle-mile logistics. The funding will be used to accelerate the deployment of its autonomous technology across North America. The strategic funding comes from NIPPON EXPRESS HOLDINGS.
Tingit Raises €500K in Pre-Seed Funding. Tingit is repairs marketplace to help people repair and restore used their used clothing. The funding will be used to scale the business into other markets in Europe beyond Lithuania. Firstpick led the round, with participation from BADideas.fund, PurposeTech, and Heartfelt Capital.
Gimbal Space Raises $1.2M in Pre-Seed Funding. Gimbal Space is a component manufacturing and supply chain startup focused on spacecraft components. The funding will be used towards growing the team and building out manufacturing capabilities. AUM Ventures led the round, with participation from Shakti VC, Z21 Ventures, and others.
Enteligent Raises $6M in Seed Funding. Enteligent is the developer of a solar-powered DC-to-DC bi-directional EV chargers. The funding will be used to scale commercialization. Taronga Ventures led the round.
PostEx Raises $7.3M in Seed Funding. PostEx offers financial and logistics services to online markets. The funding will be used to expand beyond Saudi Arabia and stretch to the UAE. Conjunction Capital led the round, with participation from Dash Ventures, Sanabil, and existing investors.
Root Global Raises €8M in Seed Funding. Root Global helps food and beverage companies collect primary emissions data on their agricultural supply chains. The funding will help as it expands beyond its current footprint in german-speaking DACH and some Eastern European markets. Point Nine led the round, with participation from Project A, HelloWorld, Arc Investors, and others.
Clarium Raises $10.5M in Funding. Clarium enables hospitals to manage their supply chains by connecting data across healthcare systems and suppliers. The round was led by General Catalyst, with participation from Kaiser Permanente Ventures, Texas Medical Center Venture Fund, Yale New Haven Health, as well as existing investors AlleyCorp, 1984 Ventures, Alumni Ventures, and others.
Foundation Raises $11M in Pre-Seed Funding. Foundation is a humanoid robotics startup for complex environments to address labor shortages. Tribe Capital led the round, with participation from other angels.
Power to Hydrogen Raises $18M in Series A Funding. Power to Hydrogen specializes in advanced electrolysis technologies. The funding will be used to grow its team, expand its manufacturing and supply chain, and expand internationally by launching new offices in Belgium. Rev1 Ventures and Worthington Enterprises led the round, with participation from Finindus, JERA, Asahi Kasei, and several others.
Redo Raises $24M in Series A Funding. Redo is a eComm platform that manages key aspects of the customer experience, including returns, order protection, and package tracking. The funding will be used to Pelion Venture Partners led the round, with participation from Cervin Ventures, Epic Ventures, Kickstart Fund, and Aglaé Ventures.
The Rounds Raises $24M in Series B Funding. The Rounds offers a household restocking delivery service. The funding will enable the company’s expansion into new markets as well as product development and hiring. The was led by Moderne Ventures, with participation from Construct Capital, First Round Capital, FJ Labs and Redpoint Ventures.
Defcon AI Raises $44M in Seed Funding. Defcon AI is a supply chain and mobility modeling, simulation, and analysis platform for military operations. The funding will be used to grow the team, enhance its R&D program, and extend core capabilities across an array of missions. Bessemer Venture Partners led the round, with participation from Fifth Growth Fund, Red Cell Partners, and others.
Opkey Raises $47M in Series B Funding. Opkey offers an AI platform for organizations to test ERP software. The funding will enable Opkey to accelerate technological advancements and expand R&D teams in Noida and Bangalore. PeakSpan led the round and was joined by UST Global, Verica, Vertical and India’s YouNest.
Freightos Acquires Shipsta for $6M. Freightos is a publically traded logistics software vendor primarily focused on the spot market. Shipsta is a freight procurement platform mainly focused on tender, contract rates, and negotiation. The acquisition gives Freightos access to Shipsta’s shipper and forwarder customers as well as deeper reach into enterprise shippers.
Who's Hiring? 👩💻
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
Project Manager at PaintJet in Wroclaw, Poland.
Customer Success Manager at Factored Quality in New York, NY.
Parcel Analyst at Stord in Atlanta, GA.