Dynamo Dispatch. 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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We Are Dynamo,

Santosh, Ted, Barry, Jon, Katie, Rachel, and Emily

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Supply Chain 📦

Part 89 Remote ID for Drones is Effective April 21. The FAA began implementing Part 89 which could grow the market for commercial drones exponentially. Part 89 will create a regulatory environment wherein commercial drone operations can be fully implemented in US aerospace. This rule means that drone operators will be subject to a tremendous number of new regulatory requirements in order to comply with the FAA’s Remote ID. This regulation requires that all types of commercial drones broadcast remote ID messages via unlicensed radio frequencies that will be compatible with personal wireless devices. Drones manufacturers must ensure that the following are included to comply with remote ID: serial number, means of compliance, declaration of compliance, and a label that shows the drone meets the Part 89 requirements. Across the pond, UK Regulator Gives Green Light to Delivery Drone Trials.

Target is Testing a New Approach to Get Packages to Customers’ Doors Even Faster. Target is testing a new delivery system that bypasses carriers and uses its own in-house team of delivery people. Items will be picked by store employees, sent to a sortation center, and then Target will use the technology they acquired from Grand Junction, Shipt, and Deliv to group packages for the most efficient delivery route. In the past year, digital sales have grown 145% Target sees eCommerce as a key part of their future. Target believes this new strategy will help the retailer compete with the speed and efficiency of Amazon, give them more control over the customer experience, and make eCommerce more profitable. Related, Retail Supply Chains and Consumers Are at a Crossroads With Returns and Mars, PepsiCo and McCormick form Coalition to Guide Supplier Sustainability.

Air Cargo Shift to Digital Booking Accelerates Amid Freight Crunch. Global airlines are hoping that digital cargo transactions will be a financial lifeline as COVID-19 continues to devastate passenger travel revenues. This week Turkish Airlines announced a partnership to offer real-time bookings with WebCargo. The rollout will begin in Spain and India before expanding into other countries. Digitizing air cargo has accelerated during the pandemic, but it is still moving at a glacial pace. With this week’s Turkish Airlines announcement, airlines representing 22% of global air capacity will be online, up from less than 10% in 2019. McKinsey estimated that cargo accounted for 12% of industry revenue before the pandemic, before tripling in the last year, and the market is likely to stay tight in the near future. Also, on the ground, Rocketing Cargo Theft Statistics ‘A Big Wake-Up Call’ For All Supply Chain Players while on the ocean, Equipment Shortages Push Up Container Prices.

🌟Pre-ordering Is Catching On as A Solution to Fashion’s Overproduction Problem. Nearly 20B of the 100B articles of clothing produced each year go unsold. This overproduction is due to inaccurate inventory estimation, but pre-order and made-to-order sales could be a solution. Brands such as Paskho, Ultracor, and Kitri, and Khaite have all relied on pre-order models since the pandemic began and all have reduced costs and waste, achieved profitability, and boosted their DTC bonafides. Other brands such as Prabal Gurung and Antonio Berardi attribute 20-25% of their revenue in the last year to pre-order and made-to-order sales. Analysts and industry experts expect this to become more prevalent as the industry shifts to DTC.

It's Game On for Packaging Procurement as Lead Times Lengthen. Packaging customer food will play a large role in making fans from Broadway to the NFL feel safe as they come back into arenas and theaters later this year. This means that the demand for these materials is leading to longer than normal lead times for these materials. Packaging companies, some of which saw an 85% decrease in demand in April 2020, welcome this challenge and see it as a way to expand their offerings and forge new partnerships with professional sports leagues and the arts. In the meantime, they still have to contend with supply chain backups from the winter storms in Texas and the disruptions caused by the 2018 Chinese tariffs. Speaking of packaging, Amazon Plans for Packing With the Right Fit, eBay Says Buses Are for Drones Too.

📊Supply Chain Disruption Report. Factory fires, mergers & acquisitions, business sales, factory disruptions, and human health ranked as the top 5 supply chain disruptions as ranked by Resilinc. While human health, which includes COVID-19, ranked fifth on the list, the disruption caused by the pandemic was more damaging than any other event and the government policies enacted in response to it, created deeper global impacts, leading Resilinc to designate the event as “severe.” Since the start of 2020, Resilinc sent out 6,192 alerts of potential supply chain disruptions which is a 67% increase over 2019 Of these disruptions 60% were deemed serious and that is up 80% y/y. North America experienced the most disruptions (2,935), followed by Asia (1,323), and Europe (1,210). Related Game-Changing Aid Could Result in a Rethink of How a UK Warehouse Operates.

Deutsche Post DHL Expands Electric Fleets in Germany. DHL has released more details on how it will decarbonize. The German postal service announced that it will expand its electric fleet from 15K to 21.5K in the coming year. This new electric fleet will also include micromobility vehicles. By 2025 the company also wants to procure another 5,000 eTrikes. Currently, around 8,000 eBikes and 9,000 eTrikes are in use in Germany. DHL also wants to triple the number of shipments that are transported by rail between distribution centers.

Snarled Supply Chain Trips Up Small Businesses. The supply chain disruptions rippling across the business world are taking a heavy toll on small US companies which have fewer resources to push back against high prices and less leverage to pass the price back on to customers. An estimated 44% of small businesses have had to deal with temporary shortages and supply chain issues in the past year and backups in the Suez Canal and California ports have only exacerbated these issues. Transportation backlogs are also adding to these supply chain disruptions. It has taken five days to get items that are two hours away which further increases the strain on small businesses. Related, Procter & Gamble Will Raise Prices in September and Supermarkets’ Revival Skips the Top Store-Brand Supplier

Mobility 🚗

The eScooters Loved by Silicon Valley Roll Into New York. This past week New York City selected Bird, Lime, and VeoRide for its coveted eScooter pilot. The journey to get there was more tumultuous than in other cities. It took a once-in-a-century pandemic for Governor Cuomo to drop his imperious, years-long opposition to eBikes and eScooters and sign a bill that would permit their use. In July 2020 New York’s City Council mandated a pilot program for an eScooter sharing pilot, which led to competition from Bird, Lime, and other micromobility upstarts who wanted in on the lucrative NYC market. This week the city announced the winners of the pilot program will deploy a one-year pilot in the Bronx with the option to add more eScooters in the second year of the pilot. eBikes and eScooters will remain illegal in Manhattan, but the city could eventually overrule that provision. Related Car-Free Sundays May be Introduced in Denmark and Seoul Suffers eScooter Parking Problem.

US EV Sales Jump Up 81% in the First Quarter of 2021. A new study from Cox Automotive and Kelly Blue Book revealed that EVs now make up 7.8% of the total US market up from 4.8% in 2020. Sales of battery-only EVs jumped up by 44.8% y/y reaching a record-breaking 100K in Q1. Hybrid sales outpaced both the market and EVs doubling to more than 200K in Q1. The EV market is dominated by Tesla which sold an estimated 69.3K vehicles in the quarter. The EV-only automaker accounted for 71% of sales in Q1 down from 83% in Q1 2020. The overall automobile market increased by 11.4% in Q1. Related Washington State Could Be the First State to Ban Gasoline-Powered Cars by 2030and VanMoof Announces Powerbank for eBikes.

🌟A Chipmaker’s Advice to the Auto Industry. Mike Hogan, the head of automotive at Global Foundries, doesn’t think the first wave of help for the automotive chip shortage will come until Q3 because of the diversity of the semiconductors that automakers need and the lack of control that the industry has over them. He believes that this moment could be an inflection point for the auto industry. This shortage has demonstrated the value in designing chips in-house and having tight control over everything that goes into a car. Hogan hopes that this will be the start of a direct relationship between automakers and semiconductor makers and that more chips would be produced in the US. Why this matters, Ford Prolongs Shutdowns at Several U.S. Plants Due to Chip Shortage and Nissan Will Furlough 800 UK Workers as Chip Shortage Cuts Production.

Building Better Electric Batteries for EVs. According to McKinsey, the Chinese BEV market has been growing by 80% annually since 2014. This accounts for 1.1M BEV sales compared to only 800K in Europe, the next biggest market. In addition to being the global sales leader, China is largely self-sufficient when it comes to BEV production. The country’s local supplier ecosystem can produce all tier-1 and tier-2 parts, such as battery cells, battery-pack components, and drivetrain modules. China is able to offer competitive cost-to-range ratios because it has been able to take advantage of leaps in battery technology. As early as 2017, Chinese OEMs were using LFP and NMC technology while Western OEMs were still experimenting with them. In other battery news, SK Battery Materials Unit Sees Shortage of Key EV Component and An API that can tell your EV when it’s the optimal time to charge.

Biden Pledges to Cut US Greenhouse Gases by Half. This week during a climate summit with world leaders President Biden pledged to cut US greenhouse gases by 52% by 2030. The Biden administration outlined a goal for a prosperous clean-energy powered the US where factories create cutting-edge batteries and EVs for export, line workers re-lay an efficient national electrical grid, and crews cap abandoned oil and gas rigs and coal mines. Other countries announced ambitious climate goals at the summit. Japan announced a 46% emissions reduction target, Canada announced a 40% cut in fossil fuel pollution, and South Korea announced that it would stop the public financing of coal-fired power plants. Related Lawmakers Unveil $25B to convert US School Buses to Electric, Biden Administration Moves to Unwind Trump Auto-Emissions Policy and US Seeks $15B for EV Charging Stations.

A Two-Wheeled Revolution. Global two-wheeler sales--mopeds, motorcycles, and scooters--have held up better than passenger vehicle sales throughout the pandemic and this market segment is going electric faster than any other segment of road transport. Around 74M two-wheelers were sold compared to 70M cars and the sales of electric two-wheelers make up 35% of global electric sales while EVs make up 5% of those sales. The market for these two-wheelers is rapidly growing in Asia. China represents 70% of all new sales, 14% of all two-wheeler sales in Vietnam are electric, and the electric two-wheeler sales have doubled in India have more than doubled in the past two years. In other micromobility news, Beijing Decides to Cap Shared Bikes at 800K in Urban Districts and City Of Pittsburgh To Add Hundreds Of Miles Of New Bike Lanes To Existing Network.

Honda Pledges to End Sale of Petrol and Diesel Cars by 2040. Honda’s new CEO announced that the automaker will ban the sales of petrol and diesel cars by 2040. This shift will be powered by Honda’s existing partnership with GM that accelerates the transition to hydrogen and electric technology in the US. Under Honda’s ambitious plan, electric and fuel cell vehicles will make up 40% of new car sales in China and North America by 2030 and 80% by 2035. Honda did not release numbers for Europe but anticipates that the transition will be even faster due to tougher emission rules. In Japan, the automaker anticipates 80% hybrid and 20% battery or hydrogen vehicles by 2030. Even more EV news Electrified Toyota Pickup Trucks Are Coming by 2025and Lightning & REV Announce eAmbulance Corporation.

Tesla Will Drive With No One in the Driver's Seat. A new Consumer Reports study showed that the Tesla Model Y can enter autopilot without anyone in the driver's seat. The vehicle steered along painted lines, but it did not send out a warning or indicate that the driver’s seat was empty. This study indicates that Tesla could be falling behind other automakers like GM and Ford that have advanced driver assist systems. Consumer reports suggest that Tesla can improve this system by using camera-based systems that GM, Ford, and others use which track the head movement of the passenger in the driver's seat and can slow down or stop if the driver is ignoring warnings or is not attentive. In other AV news How Electric, Self-Driving Cars and Ride-Hailing Will Transform the Car Industry and Two US Senators Make New Push to Advance AVs.

SUV and Pickup Purchases Soar — But Who’s Buying. Americans purchased a record number of SUVs and pickup trucks last month. The 13.8M units sold is a new record up 6% from the previous record set in January 2021. That figure also represents a 10% increase over the previous 45-year high in July 2005 which was considered an anomaly due to major automakers offering discounts at the same time. The data collected on the type of customer that has recently purchased an SUV shows that they are typically white, republican, suburban-dwelling, relatively wealthy, and men tend to buy pickup trucks while women tend to buy SUVs. Across the Atlantic, Plug-in EVs Now Dominate Purchases in Europe.

Fundraises and M&A 💸

Home Delivery Service Raises $3M Led by Bob DiRumualdo. Home Delivery Services is a startup that plans to sell groceries and general merchandise online using a massive, automated system to power the fulfillment and logistics. The company aims to provide a set of infrastructure that can be a viable alternative and supply chain to Amazon. The fresh capital will be used to scale the business.

Ottopia Raises $9M Led by Hyundai Motor Group. Ottopia is a startup that provides human supervision for AVs. The startup’s first product is a universal teleoperations platform that allows a human operator to monitor and control any type of vehicle from thousands of miles away. The new capital will be used to double the team and expand into international markets.

Holoride Raises $12M Led by Terranet AB. Holoride is a company that creates an immersive XR in-vehicle media platform. The startup’s ADAS technology has two parts. The first is the localization software, that takes data points from the car and performs real-time synchronization. The second part is the Elastic Software Development Kit where content creators can build content specific to your travel. Holoride will use the fresh funds to expand its team and expand internationally in advance of its summer 2022 launch for private passenger cars.

Orca AI Raises $13M Led by OCV Partners. Orca AI is a Tel Aviv-based startup that retrofits computer vision technology to cargo ships and can be used to improve navigation and collision avoidance. The startup hopes its AI-powered navigation system could introduce autonomous guidance to vessels already at sea. The Series A funds will be used to further develop their technology and expand their team.

Candex Raises $20M Led by Altos Ventures. Candex is a payment processing startup that acts as the “master vendor” for small suppliers allowing large companies to pay Candex directly and then Candex remits payments to the suppliers. The company said they saw its revenue grow 35% m/m in 2020. The new capital will be used to expand into other countries and improve its product.

Tortuga AgTech Raises $20M Led by Lewis and Clark AgriFood. Tortuga AgTech is a startup that creates robots that can harvest food. The company was initially launched to work on high-value crops such as strawberries, but now has built-in flexibility that can handle other produce such as grapes and tomatoes. The fresh capital will be used to strengthen its operating model, expand its team, and produce hundreds of robots that will be deployed in 2022.

Universal Hydrogen Raises $20.5M Led by Playground Global. Universal Hydrogen is a Los Angeles-based startup aiming to develop hydrogen storage solutions and conversion kits for commercial aircraft. The company’s first product will be modular capsules to transport “green hydrogen". The capsules will be available in different sizes for aircraft ranging from VTOL air taxis to long-distance, single-aisle planes. The Series A funds will be used to grow its team and expand its product offerings.

Virta Raises €30M Led by Jolt Capital. Vitra is a Finnish charging infrastructure company. The startup’s platform is used by almost 1K B2B customers in 30 countries. The fresh capital will be used to expand its team and grow its business.

ZincFive Raises $33M. ZincFive is a company that makes rechargeable nickel-zinc battery systems that provide emergency backup power. The equity fundraise will be used to further expand its business.

GoSharing Raises $60M Led by Opportunity Partners. GoSharing is a Dutch startup that provides on-demand access to eMopeds. The startup has a fleet of 5K mopeds across 30 cities in the Netherlands, Austria, and Belgium. The fresh capital will be used to expand its footprint for e-mopeds; add electric cars and e-bikes to its app; and continue building out their technology.

Shipper Raises $63M Led by DST Global Partners and Sequoia Capital India. Shipper is an Indonesian company that provides fulfillment and delivery services through its digitally managed network of fulfillment centers, delivery partners, and retail points, and eCommerce businesses. The fresh capital will be used for the organic expansion of its operations

Deliverect Raises $65M Co-Led by Redpoint Ventures and DST Global. Deliverect is a platform that streamlines online and offline food orders for restaurants. The platform has 10K customers that range from KFC to local chains and even dark kitchens. The funds will be used to further expand the business.

AfterShip Raises $66M Led by Tiger Global. Aftership is a Hong Kong-based platform that helps online sellers track packages across different carriers. The company has also built a suite of data analytics tools covering almost every step of the shopping experience, from email marketing to customer retention. The fresh capital will be used for international hiring for sales and customer support, launching new products, and further expansion into the US, where about 70% of the company’s customers are located.

Dott Raises $85M Led by Sofina. Dott is an Amsterdam-based eScooter and micro mobility startup. The company operates a fleet of 30K eScooters across Europe and is known for its capital efficiency and sustainability. The fresh funds will be used to expand into other European cities and into the eBike market.

Ornikar Raises $120M Led by KKR. Ornikaris a French startup that is bringing a new approach to driver education, safety, and insurance. The startup makes the driving education process faster and can save the customer about 40%. The new capital will be used to expand its business into other European countries.

SES Raises $139M Led by General Motors. SES is a startup that offers a complete lithium-metal solution for EVs. GM’s investment follows Volkswagen, Ford, Huandi and BMW’s investment in companies that develop EV batteries. The funds will be used for further R&D as well as to increase the company’s algorithmic capabilities to monitor and manage cells.

BlaBlaCar Raises $155M Led by VNV Global. BlaBlaCar is a french long distance carpooling and bus marketplace. In 2020 the startup had 50M customers across 22 markets in spite of the lockdowns across Europe. The new capital will be used to continue its growth and expand into the train market in late 2021 or early 2022.

Misfit Markets Raises $200M Led by Accel. Misfit Markets is a startup that sells “ugly” produce DTC at discount prices. The startup saw its customer base and order volume grow by 5X last year when it shipped 77 million pounds of food to more than 400,000 customers. The Series C funds will be used to expand into new grocery categories and new geographies.

Affirm Acquires Returnly for $300M.Affirm, a buy now and pay later company, acquired Returnly, a company that deals with returns and post-purchase payments. The acquisition will help Returnly offer its services to even more businesses. The deal will close in the fiscal quarter ending June 30, 2021.

Panasonic Acquires Blue Yonder for $7.1B. Panasonic, a Japanese conglomerate best known for its consumer electronics, has acquired Blue Yonder, a top provider of supply chain software. This acquisition comes as Panasonic has been focusing on building parts and supplying services for other businesses such as batteries for Tesla’s EVs. This acquisition is the largest for Panasonic in a decade and it comes after it bought a 20% stake in Blue Yonder last year.

SPAC Radar 📡

Lion Electric SPAC Wins Shareholder Approval. On Friday Lion Electric, a Canadian manufacturer of commercial vehicles, announced its plans to go public through an SPAC merger in November. Once the transaction is complete, the company will trade on the New York and Toronto Stock Exchanges. The company expects to raise $500M in the transaction.

Company Building 🛠️

Run Your Data Team Like a Product Team. “Data teams aim to help the people in their organization make better decisions. Many data teams aren’t doing this as well as they could and are missing out on a huge opportunity, both for the organization and the team. This gap is due to teams not being set up for success, which undermines trust in the data and the insights the team generates. There is a better way to build and run a data organization: run it as if you were building a Data Product and all of your colleagues are your customers. We believe this has the ability to transform your organization and help teams reach their true potential.”

Calculating Leader Leverage. An approach to quantifying the trust and respect senior leaders have in an organization. Worth the watch - especially for companies entering scale-out mode.

Choosing, Refining, Tracking Product Metrics. A visual crash course in picking and improving your product metrics, overtime. Very timely as we finished Friday with a similar conversation with one of our portcos.

Who's Hiring? 👩‍💻

Operational Excellence Manager at Gatik in Dallas/Ft. Worth, TX.

SDR at Vizion in Atlanta, GA (remote ok).

Product Designer at Backbone AI in New York, NY.

Check out other jobs at Dynamo portfolio companies.💥 Have you seen any interesting startups recently? Introduce us.❤️ 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.