Dynamo Dispatch (2024/09/30)
Issue 303 | GenLogs, Bot Auto, Crisp
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 💭
Our hearts and thoughts go out to all those impacted by the damages from Hurricane Helene. While there are undoubtedly supply chain disruptions to discuss later, our focus is first and foremost on the safety and recovery of all those in the affected area.
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Madelyn, Derrek, and the rest of the Dynamo team
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Supply Chain 📦
⭐ US East Coast Port Strike Set to Start Tuesday, Says Union. The International Longshoremen’s Association announced that a port strike is set to begin on Tuesday at US East Coast and Gulf Coast ports due to unresolved wage and automation disputes with the United States Maritime Alliance. This would be the first coast-wide ILA strike since 1977, impacting 36 ports and threatening to disrupt supply chains and harm the US economy by halting the flow of essential goods. While President Biden has stated he does not plan to intervene under the Taft-Hartley Act, business leaders are urging both sides to reach an agreement to avoid significant economic damage. The strike, if it proceeds, could exacerbate inflation and economic challenges weeks before the US presidential election. For more, Port Poker and the East Coast Dock Strike and Beneath the Potential Strike at US Ports: Tensions Over Innovation.
Clothes Piling Up in Your Closet? A Landmark CA Bill Would Mandate Brands Recycle Them. California’s new Responsible Textile Recovery Act aims to tackle fashion and textile waste by shifting the responsibility of recycling from consumers to producers. If passed, the bill will require clothing and textile manufacturers to fund and implement a statewide system for recycling and reusing apparel, household textiles, and other materials, potentially starting in 2028. The law, supported by companies like Ikea and Goodwill, is expected to foster a circular economy, reduce landfill waste, and create green jobs, with minimal cost increases to consumers. Similar laws exist in France and the Netherlands, where they have already improved textile recycling rates, setting a precedent for California’s approach. In other possible regulation, Trump Threatens 200% Tariff If John Deere Moves Production to Mexico.
The Magic Behind Shein’s Rise Comes Under Threat: Duty-Free Shipping. Shein, known for its low-cost, fast fashion and reliance on China’s de minimis shipping exemption, is facing increasing challenges globally. The Biden administration plans to close loopholes allowing duty-free imports and similar regulatory actions are emerging in countries like South Africa, Turkey, and the EU. Shein now has to boost its compliance efforts and spend over $50M to ensure adherence to global regulations. Additionally, Shein is diversifying its supply chain and bolstering its lobbying efforts, but these challenges, combined with environmental and labor concerns, threaten to slow the company’s rapid growth. For another eComm giant, Amazon Logistics Under Investigation for Alleged Labor Violations.
US and Taiwan Seek to Strengthen Drone Supply Chain to Keep Out China. Taiwan and the US are strengthening cooperation between their drone industries to build supply chains independent of China, driven by U.S.-China competition and security concerns over Chinese products. A US delegation of 26 drone and anti-drone system manufacturers, alongside government officials, will meet with Taiwanese industry representatives to explore partnerships. Taiwan's drone sector, though smaller than China's, is gaining traction, especially after Russia's invasion of Ukraine prompted efforts to develop autonomous platforms and expand the country's defense capabilities. This collaboration aims to integrate Taiwanese companies into US supply chains, providing them with the scale needed to meet military demands. Also in Asia manufacturing, Singapore Factory Output Beats Forecasts with 21% Rise in August.
Delivery Robot Knocked Over Pedestrian, Company Offered ‘Promo Codes’ to Apologize. At Arizona State University, a delivery robot operated by Starship Technologies collided with a university employee, causing her to fall and sustain injuries. The robot "abruptly changed direction" and hit the employee twice, causing a 4-inch cut on her arm and back pain. Starship Technologies offered insurance information and promo codes to the injured employee. Video footage confirmed the employee’s account, but the company was not charged or cited. In a separate incident, two students took a robot into their dorm, leading to felony charges for the students. These cases highlight challenges related to the integration of semi-autonomous robots in public spaces. In other innovation missteps, Shipping Off Track to Meet 5% Zero-Emission Fuel Target By 2030 and Digital Freight Broker Next Trucking Furloughs Workers After Losing Key Customers.
Mobility 🚗
⭐ Volkswagen Squares Off With Union Over German Plant Closures. Volkswagen and unions have started contentious negotiations over potential cost-cutting measures, including factory closures in Germany, after the company scrapped long-standing job protections. The IG Metall union has strongly opposed these plans, threatening strikes that could severely impact production. CEO Oliver Blume faces pressure as VW struggles with high costs in Germany, declining sales, and increasing competition from Chinese manufacturers, particularly in electric vehicles. The union is pushing for a 7% wage increase, while VW considers closing several plants, which could lead to significant job cuts despite resistance from labor leaders and political stakeholders. Also in union news, UAW Urges Stellantis Workers to Approve Strike Amid High Inventory and Job Concerns.
Fed Rate Cut Unlikely to Boost US Auto Sales in Q4. Despite the Federal Reserve's recent interest rate cut, US new vehicle demand is expected to remain stable in the short term. Experts anticipate significant changes in auto sales won't occur until 2025, as financial conditions ease gradually and lenders prioritize credit quality. While current interest rate reductions have minimal immediate impact on sales, future cuts could improve affordability, especially if coupled with better employment and savings rates. The long-term outlook for vehicle affordability remains positive, with projections of price drops and lower payments by 2025. Related, US New Vehicle Sales Dip in Q3 Amid Economic Uncertainty and High Prices.
Chinese Automaker BYD Seeks Further Easing of Mexico EV Tariffs. BYD is seeking an extension of tariff relief for EV imports into Mexico as it plans to build a plant in the country. A decree exempting EVs from a 15%-20% tariff is set to expire at the end of the month, and BYD is proposing that the Mexican government extend the relief in exchange for its investment in local manufacturing. The company, which launched sales in Mexico last year, aims to produce up to 500K cars annually and is awaiting a response from the government, including from the incoming administration under Claudia Sheinbaum. Elsewhere in BYD news, BYD Recalls Nearly 100,000 EVs Over Fire Risk and BYD and Hyundai Team Up to Export Cars.
UK Car Manufacturing Falls Sharply Amid Factory Transitions for EVs. UK car manufacturing dropped 8.4% in August due to factory retooling for new electric models, with production for both export and domestic markets declining. Electrified vehicle production fell by 25.9%, although the industry expects a recovery as new models are introduced. Despite this downturn, overall production for the U.K. market has risen 12.3% year-to-date, and the sector remains optimistic about future growth, supported by record investment. Related, Buying an Electric Car in the UK? There Are Now Almost 100 Options.
California Governor Again Spikes Driverless Truck Ban. California Governor Gavin Newsom vetoed Assembly Bill 2286 which would have required human operators in autonomous trucks over 10,000 pounds, citing the need to balance worker protection with technological innovation. Newsom emphasized that his office had proposed amendments for compromise, but they were not accepted. Safety advocates and businesses argued that the bill would have hindered California's regulatory process, stifled autonomous trucking innovation, and delayed potential economic and safety benefits, while similar technologies are being embraced in other states.
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 💸
ShipTop Raises $500K in Seed Funding. ShipTop is a Vancouver based eComm fulfillment provider. The funding will be used to enhance its tech platform, expand service offerings, and reach a broader market eComm merchants. Co-founders of DV Trading Company, a Chicago-based trading firm, led the round.
Cariqa Raises €1M in Pre-Seed Funding. Cariqa is a consumer-facing EV charging marketplace with clear pricing. The funding will be used to develop its marketplace and initiate rollout across Europe. Investors include Anthemis, Vento Ventures, Hatcher+, Techstars, Golden Egg Check, and Plug and Play.
GenLogs Raises $6M in Seed Funding. GenLogs is a provider of roadside sensors collecting data on truck movements. The funding will be used to expand its sensor network and a suite of computer vision models. Autotech Ventures and Steel Atlas led the round, with participation from Venture53, TitletownTech, Plug and Play Ventures, BBQ Capital, ASC Ventures, and JHH Ventures.
Outgo Raises $15M in Funding. Outgo sells banking services such as invoice processing and payment collection to freight carriers. The funding comes alongside a $50M credit facility. Gradient Ventures and Construct Capital co-led the round.
Bot Auto Raises $20M in Pre-Series A Funding. Bot Auto is an autonomous trucking company. The resources will power the company’s technology development. The funding comes from Brightway Future Venture, Cherubic Venture, EnvisionX Venture, First Star Venture, Linear Capital, M31 Capital, Taihill Venture, and Uphonest Venture.
Pyka Raises $40M in Series B Funding. Pyka is an autonomous electric aviation startup focused on crop-dusting, cargo plane lines, and now defense. Obvious Ventures led the round, with participation from Piva Capital, Prelude Ventures, Metaplanet Holdings, and YC.
VELA Raises €40M in Funding. VELA aims to revolutionize wind-powered maritime transport. The capital will enable the company to launch the building of its first vessel with the Australian shipyard, Austral, as well as strengthen its teams in France and the US. Credit Mutuel Impact, 11th Hour Raicing, and BPI provided the funding.
Cyclic Materials Raises $53M in Series B Funding. Cyclic Materials aims to create a circular supply chain for rare earth elements by recycling the raw materials from end-of-life EV motors, wind turbines, MRI machines, and more. The round was led by ArcTern Ventures and joined by new investors BDC Capital’s Climate Tech Fund, Hitachi Ventures, and Microsoft’s Climate Innovation Fund, as well as existing investors like Fifth Wall, BMW i Ventures, Energy Impact Partners, and Planetary Technologies.
Crisp Raises $72M in Series B Funding. Crisp provides real-time supply chain insights for retailers, brands, and distributors. The round will enable the company to add new features and functionality, fuel new data partnerships, and add strategic hires. The round was led by Wellington Management with participation from Prologis Ventures, FirstMark, Toshiba Corporation, DNX Ventures, and Cox.
Distribusion Raises $80M in Series C Funding. Distribusion is a B2B ground transportation marketplace. The round will enable the company’s global expansion and investment in technology. TQ Ventures led the round and was joined by Lightrock.
Who's Hiring? 👩💻
Be sure to check out the Dynamo website for more job opportunities at our portfolio companies!
Operations Manager (Commercial Paint) at PaintJet in Phoenix, AZ.
Ground Operations Support at Manna in Dublin, Ireland.
Founding Software Engineer at Importal in Austin, TX.