Dynamo Dispatch. Weekly update from Dynamo Ventures covering the latest and greatest in supply chain, mobility, and building venture-scale businesses.💥 Seen any interesting startups or have any tips for the Dispatch? Shoot us a note.❤️ We would love your support. Please forward to friends and share on social media.🗞️ If you were forwarded this and found it interesting, please sign up.🎙 Check out Dynamo's podcast series, The Future of Supply Chain.

Weekly Commentary 💭

UPS announced strong earnings this week but what was most interesting to us was the long-awaited disclosure that Amazon accounts for over 10% of total sales. To be more specific, Abney noted that Amazon was the largest customer account for 11.6% of the $74B in 2019 revenues as Bezos & Co “broke up” with FedEx partway through 2019.

11.6% or $8.6B in sales, that’s a big number. Some executives we’ve spoken with love it and don’t see an issue, others actively manage their exposure, and then a third group is avoiding them altogether and serving the rest of the retail and eCommerce opportunity. Amazon continues to be a customer and a competitor to the industry. That said, Walmart has long had a robust supply chain competency and has a reputation for forcing certain technologies (RFID) and operations (OTIF) on to its suppliers. In recent years, it’s been able to take a back seat to Amazon but continues to build it’s supply chain chops in surface transportation, warehousing and fulfillment, and last mile.

When looking at startups enabling retail and eCommerce supply chain, there tends to be a knee-jerk reaction of comparing them to Amazon but the reality is there’s plenty of opportunity in the $26T retail market (of which eCommerce only has a 14% share). In the last 12 months, we’ve seen this supported by strategic activity (consider Shopify’s Fulfillment Network) as well as the founders we’ve had the good fortune of speaking with and our amazing portfolio that we get to work with. We’re headed to RILA LINK2020 in Dallas later this month and if you’re building an industry-defining startup in retail logistics, let us know by saying hello!

We Are Dynamo,

Santosh, Ted, Barry, and Jon

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Supply Chain 📦

🌟A Profile of Tony Blevins, Apple’s Chief Supply Chain Officer. Despite being renowned for its design and brand above all else, Apple has found a central figure in Belivns. His strategies have helped Apple gain nail down big margins on the iPhone and will enable the company to smoothly transition to a services-driven future. However, some say his techniques can also strain supplier relationships, and Apple has had several high-profile skirmishes with big suppliers in recent years.

CH Robinson Earnings Fall 45% On Narrowest Brokerage Margins In A Decade. In Q4 CH Robinson was forced to choose between letting volumes deteriorate and repricing its contractual business aggressively to maintain market share. In choosing the latter, the company’s net income dropped 47%. Now the company will have to choose between trying to reclaim margins in its bread-and-butter brokerage business and its investments in new innovations.

📊McKinsey on Supply Chain Risk Management. The number of noneconomic shocks to the supply chain has doubled since 1980. The recovery time of any single one of these events can be in excess of several months. Companies that have dedicated supply chain risk management teams are far more successful at creating resilience in their supply chains and proactively mitigating both low- and high-impact risk.

Swiss Post’s No Packaging Same-Day Delivery Trial. Swiss Post is launching a same-day delivery trial in Zurich. The company will deliver individual orders from online retailer Digitec Galaxus in their original packaging — without an address label, box, and filler material. According to a company survey, 80% of eCommerce shoppers consider environmentally friendly packaging and filling material to be important. In the US, the USPS Inspector General Doesn’t Find Same Day Delivery to be A Threat and UPS Set to Focus on Speed as It Targets More E-Commerce Business.

UPS Going Big on EVs, Testing AVs. UPS joins Amazon in aggressively expanding its electric capabilities with an order of 10,000 electric delivery vans. Additionally, it plans to begin testing Waymo AVs in a 6-month trial starting next month. UPS will pay Waymo to shuttle packages from its Phoenix stores to a nearby sorting center multiple times a day, starting with one route.

Grocery Delivery Goes Small With Micro-Fulfillment Centers. Grocers are focusing on automating and miniaturizing their logistics to accelerate online orders while keeping costs in check. Supermarkets have a big stake in the new fulfillment strategies because eCommerce sales make up the fastest-growing segment of the classically low-margin business and their often-perishable items leave little wiggle room for delivery delays. Speaking of fulfillment, Amazon Nabs More Space in Staten Island.

McCormick to Spend $350M on Transition to SAP ERP. McCormick has more than doubled in size since its last ERP upgrade in the early 2000s. The new ERP system went through the planning and building phases last year and will be run in pilot implementations throughout 2020 with full deployment slotted for 2021 and 2022.

Operations, Trade Flows Halt as Coronavirus Spreads. All terminals at The Port of Wuhan ceased operations as the result of the quarantine​ the Chinese government placed on the region. China is forecasted to see 5.9% GDP growth this year but the outbreak could slash that by a whole percent.

Mobility 🚗

📊McKinsey: The Road Ahead for e-mobility. Despite a slowdown in the overall automobile market, tallying another 4.5% shrinkage in 2019, EVs stand out with 41% market share growth over the last 3 years. Both traditional and modern OEMs are looking to compensate here, with plans to roll out 400 new BEV models by 2025. Consumer concerns around charger availability and charger speeds remain the biggest hurdles, but purchase consideration has increased by about ~20% since 2016.

🌟GM Commits $3B to Build Electric and Autonomous Vehicles in Michigan. GM is upgrading its supplier tooling and Detroit assembly plant to produce all-electric trucks, SUVs, and the Cruise Origin. The investment follows the recent announcement of GM’s $2.3B joint-venture with LG Chem to mass-produce batteries for the OEMs upcoming EVs. Elsewhere in the EV space, Lincoln to Partner With Rivian to Make Electric Vehicles and Nissan and Uber Sign 2,000 Vehicle Nissan Leaf Deal.

US Department of Energy Invests $300M Into Sustainable Transportation R&D. The investment will fall into three separate buckets: $133M will go towards research for battery technologies and lightweight vehicle materials, $64M is earmarked for hydrogen-focused R&D, and the rest will be dedicated to biofuel and waste resource research.

"Peak Car" May Be Past, Bosch CEO Says. “It could well be that we passed the peak in global automotive production.” CEO Volkmar Denner added that Bosch foresees this low level of production to be the new norm for the foreseeable future. The company’s earnings halved last year, as they look to focus on electronics and software in the coming year to avoid further decimation.

Uber Tests Letting California Drivers Set Their Own Prices. Uber is experimenting with allowing drivers in the markets of Santa Barbara, Sacramento, and Palm Springs to set their own fares. The new feature allows drivers to increase fares to up to 5x more than Uber’s original price. The move will give drivers more independence and hopefully, Uber thinks, will allow the company to continue to classify drivers as contractors. In other Uber news, Uber’s Self-Driving Cars Are a Key to Its Path to Profitability.

Somewhere Between a Shared Cab and a Private Jet, It’s the Commuter Helicopter. The news of Kobe Bryant’s tragic death last week has turned a spotlight on the world of private helicopters. Kobe and many other high-profile individuals use helicopters the way others use cars, especially to avoid the gridlocked streets of LA and NYC. It will be interesting to see how people’s opinions on the mode evolve with the expansion of Uber Copter’s and Uber Elevate’s services in the coming years.

📊CB Insights: How Bikes And Scooters Are Shaking Up Urban Transport Worldwide. In the US alone, the micromobility market is expected to be worth between $200-300B. Surprisingly, despite the loud minority of Luddites, the vast majority of citizens actually view eScooters positively, netting support from over ⅔ of citizens among most major cities. Still, urban infrastructure, regulations, and durability poise conspicuous threats to the industry. More on micromobility, Scooter Startups Take Steps to Curb Inefficiencies, Address Safety Concerns and Bird deploys the Bird Two scooter in San Francisco.

Fundraises, M&A, Talent 💸

Shipamax Raises $7M Led by Mosaic Ventures. Dynamo portfolio company Shipamax, a London-based provider of back-office automation to freight forwarders, raised $7 million last week. Mosaic Ventures led, and was joined by Crane Venture Partners and Y Combinator.

Miovision Raises $91M Led by Atlantica Ventures. Ontario-based Miovision creates software that converts video of vehicle traffic into data. The company has more than 500 customers in 50 countries, namely the transportation departments of several US states.

Bird Acquires German Scooter Startup Circ & Adds $75M To Series D. Berlin-based Circ has operations in 43 cities across 12 countries and previously raised more than $60M in funding. With this deal, Bird will add over 300 employees to its EU operations and further its expansion in the region.

Bizongo Raises $30M Led by Schroder Adveq. Bizongo is an India-based B2B marketplace for businesses to identify, buy, and sell material packing solutions. The Series C nets the total raised to date at about $56M. Return backers B Capital, Accel, Chiratae Ventures, and IFC also participated  

Sendy Raises $20M Led by Atlantica Ventures. Sendy is a Kenyan on-demand delivery platform that connects clients to drivers and vehicles for cargo transport. The company currently has offices in Kenya, Tanzania, and Uganda, with 5,000 vehicles on its platform that move a wide array of goods.

Advano Raises $18.5M Co-Led by Innovation Fund, Future Shape, and PeopleFund. New Orleans-based Advando develops solutions for improving the battery life of rechargeable batteries. Thiel Capital, DCVC, and YC also participated. Fadell claims Advano’s silicon-based Li-Ion batteries are the holy grail, able to solve four key issues all at once: material expansion, cycle-life, cost, and drop-in manufacturing scalability. 

Roambee Raises $15.2M Co-Led by Anchor Group and Comcraft. Roambee, a Santa Clara-based on-demand shipment monitoring platform, said the Series B will fuel the expansion of operations and acceleration of sales globally.

Bond Raises $15M Led by Lightspeed Venture Partners. New York-based Bond provides fulfillment using electric tricycles for last-mile delivery. The company manages delivery and storage for more than 30 brands in NYC from six distribution centers in scattered throughout Manhattan and Brooklyn.

CloudTrucks Raises $6.1M Led by Craft Ventures. CloudTrucks provides what it dubs "business in a box" for truckers, all the necessary technology to operate more efficiently. The startup is taking on a few customers on a case-by-case basis while it refines its cloud-based platform. The company is catering to the highly fragmented trucking market — about 91% of fleets comprise less than 6 trucks.

Baton Trucking Raises $3.3M Led by 8VC. Baton is trying to solve detention times by opening up drop yards just outside urban areas, allowing drivers to drop trailers and quickly return to the road. The company will then manage delivery of those trailers to their final destinations. The company expects to launch its drop-zone solution in Ontario, California, and Dallas by the end of Q1.

Axle Raises $1.4M Led by Trucks. Axle is an NYC-based factoring platform that provides small businesses with the cash flows required to pitch, win and service competitive contracts. Plug and Play, 37 Angels, Fontinalis Partners, and Techstars also participated.

Techstars Detroit Accelerator Is Shutting Down. We received word this week that Techstars Detroit (aka Techstars Mobility) will close its doors after five years. Ted Serbinski and the team did a great job rallying early-stage transportation startups and, no doubt, will continue to be a key partner to the founders of tomorrow.

CH Robinson to Acquire Prime Distribution Services. CH Robinson intends to purchase Prime for approximately $225 million in cash. Prime produced $108.7M in revenue last year.

BorgWarner to Buy Delphi Technologies. BorgWarner agreed to buy Delphi in an all-stock transaction that values Delphi at about $3.3B. The deal, combining the two major auto-parts makers, will split ownership 84/16.

Volkswagen Unit Makes Unsolicited Bid for Navistar. VW has offered to fully take over Navistar in an all-cash transaction valued at roughly $2.9B. Navistar responded Thursday that it would carefully review and evaluate the proposal.

Warehouse Exchange Hires ex-eHarmony CEO as New CEO. Warehouse space sharing startup Warehouse Exchange named former dating app eHarmony CEO Grant Langston as its new head of command. From one marketplace to another for Langston.

Company Building 🛠️

AI Will Change Pricing Models. “While it may be too early to dictate exactly how pricing for AI software should be set, I’d urge vendors to experiment with value-derived, volume-based models which don’t restrict usage. Regardless of exactly which model they land on, I believe the most successful players will start to hop off of the per-seat ship before it sinks them.”

📊Standing on the Shoulders of Giants. Ben Evans’ annual presentation that explores the challenges and dynamics associated with having the majority of the world connected and online. Evans ultimately concludes that technology will come under increasing regulatory scrutiny as software has permeated every major industry. 

You Can’t Fire Your Investor. Earlier this week, Josh Kopelman noted that First Round’s time to a “yes” went from 90 days in 2004 to 9 days. While speed and efficiency are great, Fred Wilson (and many others) caution against such shotgun marriages in what is a game of long-term “greed.”

Who's Hiring? 👩‍💻

Marketing Manager at Plus One Robotics in San Antonio, TX.

Frontend Engineer at Mobikit in Columbus, OH.

Regional Sales Manager at Zeelo in London, England.

Check out other jobs at Dynamo portfolio companies.💥 Seen any interesting startups or have any tips for the Dispatch? Shoot us a note.❤️ We would love your support. Please forward to friends and share on social media.🗞️ If you were forwarded this and found it interesting, please sign up.🎙 Check out Dynamo's podcast series, The Future of Supply Chain.