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 💭

We’re off next week for the long weekend - enjoy your week and the start of summer.

We Are Dynamo,

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

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Supply Chain 📦

The World Economy is Suddenly Running Low on Everything. As the economy is rebounding from COVID-19 businesses are furiously trying to stock up on essentials such as copper, iron, semiconductors, plastic, and cardboard as they reopen. Further exacerbating these shortages is a series of unexpected events such as the deep freeze in much of the Central and Southern US in February, the Suez Canal back up in March, and hackers infiltrating the Colonial Pipeline last week. The Logistics Managers’ Index, a measure of how expensive supply chain executives think supply chain management is, is at its second-highest level. The surge in eCommerce demand and fatter inventories are driving operating expenses up and transport costs won’t decrease until demand does. The rise in the price of consumer goods and signs of inflation are not quelling these shortages since the ability to produce what is already scarce is slow and expensive to ramp up. Things aren’t much better on the transportation side. At capacity container ships are backed up at ports all over the US, the Cass Freight Index reached a new record in April, and spot prices for truckload service are on track to rise 70% in the second quarter from a year earlier and are set to be up about 30% this year compared with 2020. The magnitude of these shortages and the fact that there is no end in sight make it, unlike anything the industry has ever seen. Related, Casper Sidesteps Product Shortage With Third-Party Manufacturers and Retailers Couldn’t Stock Hand Sanitizer Fast Enough, Now They Can’t Give It Away.

Warehouse Operators ‘In the Driver’s Seat’ as Demand and Costs Keep Rising. Warehousing costs in the US have continued to climb in the past year. According to InsightQuotes, average yearly prices for warehouse space have risen 5.59% in 2021 following a 3.3% rise last year. 61% of warehouse operators plan to raise their prices this year compared to 69% said they would last year. According to Prologis, the utilization of warehouse space was 85% in the first quarter with demand in excess of supply and that is unlikely to change in the immediate future. Prologis also suggests that warehouse rents will rise by 6.5% this year based on strong retail sales and importers building up inventories. Once in the warehouse, fees such as pallet and bin charges, carton fees, and B2C pick and pack fees have increased this year. These price increases have not raised operators’ margins, they have remained steady at 11%. In other warehouse news London Tops Hong Kong For World’s Priciest Warehouse Space and Warehouse Sprawl Prevention Bill Advances in Legislature.

Food Supply Chains Are Stretched as Americans Head Back to Restaurants. Over the past six weeks, the restaurant industry has come back faster than most suppliers have anticipated. This has left food suppliers and logistics providers scrambling to cope with shortages and increased transportation costs that come with undoing the changes that COVID-19 brought to the foodservice industry. At the peak of the pandemic, food suppliers allocated more inventory to grocery stores, and other retailers and restaurants operated on slimmed-down menus and shifted away from fresh ingredients and towards prepackaged foods better suited for delivery. Now as restaurants reopen, they have had to think on their feet and offer promotions on special items since prices of normal ingredients such as pepperoni have increased by 60%. Exacerbating this problem is the 20% increase on the spot market for refrigerated truck prices and a labor shortage in the transportation market. Many industry insiders believe that solving the labor shortage will be key to getting this market back to normal. In other restaurant supply chain news Restaurant Brands International Changes Supply Chain to Reduce Global Footprint.

No Wood: Why Is There a Lumber Shortage in the US?. Over the past year, the US has dealt with shortages of everything from toilet paper to semiconductors. Now there is a shortage of lumber which is disrupting US supply chains. Lumber has been a hot commodity for the better part of the past year. The cost of a 1K board feet of lumber is now over $1K when it previously spent years in the $200-$400 range. Experts point to the housing market making a faster than expected comeback and a pandemic-era home renovation craze as the main causes for this shortage. Once the lumber industry realized there was an excess of demand, many in the industry weren’t able to ramp up quickly as the demand was rising. While this shortage is creating supply chain bottlenecks from the construction industry to the pallet industry, it is a boon for the lumber industry which has struggled since the 2008 financial crisis. Also, the humble Pallet Continues to Be in Shortage Stock.

Wabtec: Battery-Electric Locomotive Reduces Fuel Use by 11%. Wabtec’s new battery-electric locomotive can reduce a train’s fuel consumption by 11%. The company’s FLXdrive, which Wabtec says is the world’s first 100% battery-powered, heavy-haul freight locomotive, also reduced the train’s greenhouse gas emissions, according to a three-month study on the locomotive. The company says the next step is to build a second-generation locomotive with a battery capacity of more than 6-megawatt hours. This would reduce a locomotive's fuel consumption and carbon emissions by up to 30%, more than doubling what the locomotive can do. Wabtec hopes they can commercialize the second generation locomotive in the coming years and develop a zero-emissions locomotive that would use batteries, hydrogen internal combustion engines, and hydrogen fuel cells. Elsewhere on the tracks, Learn About Voting Trusts Used in the CN/KCS Merger and Railway Infrastructure Susceptible to Greater Damages From Climate Change.

Inventory Accuracy is a Must-Have to Cut Waste in Supply Chains. Eliminating food shrinkage, or wasted inventory in the grocery industry will be a key in addressing climate and food insecurity goals. Grocery stores waste more than 80B pounds of food--about 40% of our food supply-- due to administrative mistakes, spoilage, and other losses, and annually it costs the grocery industry $50B in lost profits. The US Department of Agriculture found that the environmental cost of wasted food equates to 30M acres of cropland and 4.2T gallons of which sits in a landfill contributing to greenhouse gas emissions. This means that organizations will not be able to meet their climate goals without a zero shrink initiative alongside their zero-emissions goals. Zero shrinkage goals can be achieved through tracking technology which can perfect inventory accuracy and by shifting unsold inventory towards people who need it instead of landfills. Combining zero shrink and zero emissions goals is a win-win situation that will help grocers meet emissions goals faster, improve their bottom lines, and help feed people in need Related Can Ocado Deliver Kroger From Clutter? and On Food Waste: Smart Discounts on a Deadline.

Retailers Accelerate Last-Mile Investments, Expand Carrier Networks. A new Convey study found that 57% of retailers have expanded their carrier network over the past year and that 81% are focused on investing in more complex last-mile initiatives in the next 12 months. On-time package delivery has also increased since the start of the pandemic. In April 2020, only 77% of packages were delivered on-time compared to April 2021 where 82% of packages were delivered on time. On-time delivery hasn’t reached April 2019 levels because FedEx, which maintains the largest share of the market, is operating at 71% on-time performance compared to 88% for UPS and 90% for USPS. Carrier market share has held steady among the leading carriers over the past three months, with FedEx at 36%, UPS 28%, USPS 9%, DHL 10%, and regional carriers at 16%. Related, Walmart Testing Branded EVs for Last-Mile Deliveries and Echoing Amazon: Walmart, Target Try Local Package Delivery.

Manna Gets IAA Approval for Drone Deliveries. Dynamo portfolio company Manna Aero got the first IAA LUC (light uncrewed aircraft operator) certificate. The certificate, which is recognized by all EU member states, gives drone operators certain privileges such as self-authorizing operations without applying for additional authorizing.

This level of recognition also shows a level of maturity for Manna which has been conducting trials in the West of Ireland and has secured delivery partnerships with Just Eat and Tesco. Manna CEO Bobby Healy said the following about this historic achievement “This achievement marks the culmination of our two-year engagement with the IAA and is a strong endorsement for Manna, the nascent European drone delivery industry, and Ireland as a tech epicentre for drone technology.” Congrats to the Manna team on this milestone! Manna drones are emission free like Daimler Trucks’ Ambition with CATL for Zero-Emission Trucking.

Mobility 🚗

This is Ford’s First Electric Pickup Truck, the F-150 Lightning. On Wednesday, Ford released its battery-electric F-150 pickup truck that will go on sale in 2022. The eTruck, fitted with an extended-range battery, can accelerate to 60mph in 4 seconds. The F-150 Lightning comes with a SuperCrew four-door body style with a 5.5-ft bed and a dual-motor, all-wheel-drive powertrain. The vehicle is also equipped with Intelligent Power Backup which could power your house in the event of an outage by turning a DC power feed into an AC power feed. An Electric F-150 could transform the EV market in the US since the F-150 has been the best-selling vehicle in the US for over 30 years. Ford is not targeting higher-end consumers with the F-150 Lightning. The automaker will sell basic models for $39,974 before tax credits and the F-150 XTL model will sell for $52,974 before tax credits. How did we get to this moment in EV history? Related, A Profile of Alexandra Ford English, the first female member of the Ford BoD.

Ford Is Going to Make Its Batteries in the US. After unveiling the electric F-150 Lightning, Ford announced a new venture with SK Innovation to build its automotive batteries in the United States. Ford wants to make its EVs affordable and that means building a close-to-home, scalable supply chain that can provide an estimated 240GwH of global demand for its batteries by 2030. By moving to build its own gigafactories, Ford is following VW's announcement that it's going to zigzag Europe with battery plants. VW is a good comparison since it's also aiming for the same GwH of output. This plan will require further approvals before it is official, but this week Ford cemented BEV future. In other battery news, BASF, Canada in Early Talks on EV Battery Production and Could 3D Printed EV Batteries Solve A Whole Bunch Of Problems?

BMW Expects Sales to be 50% Electric by 2030. BMW announced its intention to remove 200M tons of carbon dioxide by 2030. An important component in getting there is what vehicles the automaker has on the market. According to their current projections, at least 50% of its global sales will consist of fully electric vehicles by 2030 which means that 10M EVs will be on the road in 2030. To make this happen BMW reduced its offering of combustion engine vehicles and that about half of today’s drive models will no longer exist by 2025. Another way for BMW to reach these ambitious goals is to reduce the amount of material that goes into producing cars and to include recycling in the design of future vehicles. Also, Europe Leads in EV Sales, but for How Long? and Global EV Sales Accelerating, But Government Help Needed.

Japan Is Getting Back Into the Driving Seat. Before COVID-19, 10M people relied upon Tokyo’s 13 subway lines for transportation. Now the pandemic has changed attitudes about vehicle ownership in Tokyo where 85% of residents have said that the pandemic has shown them the importance of owning their own vehicle. This has led to Japan issuing an increased number of driver licenses for the first time in eight years. These new drivers are mostly in their 20s and 30s and these first-time car owners have the potential to change Japan’s domestic car market. PwC is forecasting first-time vehicle ownership in Japan to spike. Toyota is expecting Japanese sales to spike and other Japanese automakers such as Honda and Nissan hope that once this generation gets in the driver's seat they can entice them to stay there.

Bosch: Chip Supply Could Remain Tight till 2022. The auto industry has been hit hard by a semiconductor shortage and there is no end in sight. This week Bosch CEO said that the supply of semiconductors could remain tight until 2022. Their CEO believes that "There are difficult months ahead of us, and the situation could remain tense until 2022." Earlier this year, the company said that the company is in crisis mode dealing with the shortage and the company believes that the impact of the shortage would hit their profits in the second quarter. Elsewhere, Some Relief in the Bike Supply Chain.

A Brief Look at EVs From the Dawn of the Automobile Age. In 1895 the first-ever EV patent went to Philadelphia-based Pedro Salom and Henry Morris’s Electroboat. The Electroboat was an 800 lb car that had a 350 lb battery that could go 15 mph for 25 miles. The turn of the 20th century brought even more EV innovation. The 1901 Waverly Electric could go 40 miles on a charge and the 1909 Baker Victoria Roadster could allegedly go 244 miles on a single charge due to its Edison nickel-iron batteries. As the 20th century progressed most motorists preferred combustion engine vehicles. EVs from Studebaker, Waverly, Milburn, Detroit Electrics, and VW could all tout EV battery, range, and speed improvements, but all of the EV models failed due to lack of demand, acts of God, or corporate mismanagement. EVs have been the car of the future for nearly as long as we have had cars. At this moment in history, the science and the economics of EVs have intersected in a way that they didn’t 100 years ago which could be what finally makes EVs the car of the present and gasoline-powered vehicles a thing of the past.

Lamborghini Maps a Cautious Course Toward Electrification. Lamborghini plans to invest $1.5B to produce an entirely gas-electric hybrid lineup by 2024, but its first fully electric model will not appear until after 2025. A key part of this plan is to shift its current models - the Huracan and Aventador sports cars and the Urus sport utility - to hybrid, gasoline-electric powertrains by the end of 2024. Getting rid of combustion engines is a technical challenge for sports cars because lithium-ion batteries cannot operate for long at top speed on a track which is a hallmark of their brand. This timetable would keep Lamborghini behind other luxury car makers such as Ferari, but would keep it on pace with government deadlines to phase out gas-powered combustion engines. Related, Lexus Sells 2M EVs: New EV to Debut Next Year and UK Has ‘No Clear Plan’ to Reach EV Targets.

London’s eScooter Trials Kick Off June 7th. London’s much-awaited eScooter pilot program will kick off on June 7. The city’s transit authority announced private eScooter use will still be illegal and Dott, Lime, and Tier are companies selected for the pilot. The eScooter pilot will begin in six of London’s boroughs Ealing, Hammersmith and Fulham, Kensington and Chelsea, Richmond upon Thames, the City of London, and Canary Wharf) with plans to include other areas as the pilot progresses. The UK has been slow to allow the use of sScooters, but the pandemic has changed that. UK officials now see eScooters as a more environmentally friendly way to get around and a way to avoid crowded public transport. eScooter speeds will be capped at 12.5 miles per hour, will include geofencing to ensure that the eScooters are parked correctly, and riders must be 16 or older and have at least a provisional car, motorcycle, or moped license to ride. In the US, Chicago Releases Data from eScooter Trials.

Fundraises and M&A 💸

Secai Marche Raises $1.4M Led by Rakuten Ventures and Beyond Next Ventures. Secai Marche is a Japanese startup that helps farmers and food businesses deal with fragmented supply chains. The startup uses AI and analytics to streamline agricultural logistics making fulfillment more cost-efficient and enabling food businesses to bundle products from different farmers into the same order. The new funds will be invested in expanding its fulfillment infrastructure and its team.

Forager Raises $4M Led by Duncan Saville. Forager is a startup that connects local farmers to grocery stores that source local food. The company has seen 4X growth since 2018 and nearly 200K local products have been sourced on its platform to date. The fresh capital will be used to expand the company’s sales outreach and product development.

Bosta Raises $6.7M Led by Silicon Badia. Bosta is an Egyptian startup that is helping small businesses with logistics and last mile delivery. Bain & Co projects eCommerce to become a $28.5B industry in MENA by 2022 and most of these transactions come from small businesses who sell on social media and need a logistics provider like Bosta to provide essential last mile delivery services. The company, which has delivered 4M packages since 2017, will use the new round of capital to expand across Africa, MENA, and the GCC.

Moxion Power Raises $10M Led by Energy Impact Partners. Moxion Power is a startup that manufacturers vertically integrated mobile energy storage systems. The startup is replacing inefficient fossil-fuel-burning generators with its proprietary mobile energy storage technology and all-electric equipment rental solutions, helping customers reduce the costs of temporary power and decarbonize their operations. The fresh funds capital will be invested in expansion of their product and their customer base.

WeaveGrid Raises $15M Led by Coatue. WeaveGrid is a startup that develops sustainable software solutions for the deployment of EVs on the electric grid. The startup aims to fill the gap between the adoption of EVs in the US and the lack of infrastructure which can support said adoption. The new funds will be invested in scaling their business and product offerings.

FreightWaves Raises $16M Led by Triangle Peak Partners. FreightWaves is a Chattanooga-based provider of supply chain market information. The company saw an 80% growth in revenue in Q1 of this year and their media business saw 130% increase in revenue compared to the same period last year. The new round of funding will be used to fund product expansion and go-to-market activities for FreightWaves Carbon Intelligence (FCI), the company’s new sustainability platform built on FreightWaves SONAR.

Portside Raises $17M Led by Tiger Global Management. Portside is a startup that provides a single software solution for business aviation companies to manage everything from flight operations to maintenance, crew and staff scheduling, expense management for crew members and staff, and financial data. The startup still saw 300% growth in the past year despite the COVID-19 pandemic. The new infusion of capital will be used to accelerate product innovation, support further engagement with large enterprise customers, and grow the team.

Twaice Raises $26M Led by Energize Ventures. Twaice is a German-battery analytics software company. The startup gives manufacturers an affordable way to understand EV battery health once the battery is in an EV. By understanding the health of the battery, Twaice can offer manufacturers forecasts and simulations about how the battery could be used in the future. The fresh round of capital will be invested in expanding its geographic footprint and to expand its use cases.

Jerry Raises $28M Led by Goodwater Capital. Jerry is an AI-powered car insurance comparison startup. The startup differs from other auto-related marketplaces since it aims to help consumers with every aspect of car ownership (from repair to maintenance to insurance to warranties), rather than just one. Customers who use Jerry can save $800 a year on car insurance. The capital infusion will be used to grow the team and expand their product offerings.

Goldbelly Raises $100M Led by Spectrum Equity. Goldbelly is a startup that empowers chefs to deliver food from their restaurants nationwide. The startup has seen massive growth over the past year. It has 850 restaurants on the platform in all 50 states, seen a 300% increase in growth, and has added 1M new customers in one year. The fresh capital will be invested in scaling the technology and operations of the platform as well as accelerating the onboarding of new chef and restaurant partners.

Virtuo Raises $96M Led by AXA Venture Partners. Virtuo is a Paris-based startup that wants to disrupt car rentals. The startup wants to provide rentals for non-car owners who want access to a car for either a few months or a few days without having to own a car or rent a car on an hour-by-hour basis. The capital infusion will be used to invest in its tech, to expand to more markets beyond France, to add in a tier for business users, and to add more vehicles into the mix.

Moglix Raises $120M Led by Falcon Edge Capital and Harvard Management Capital. Moglix is an Indian industrial business-to-business marketplace. The marketplace serves over 500K small, medium-sized businesses on the platform and has established 3K manufacturing plants across India, Singapore, the UK, and the UAE. Moglix also operates a supply chain network of 16K suppliers and over 35 warehouses. The new round of capital will be invested in further scaling of the business.

Cognite Raises $150M Led by TCV. Cognite is a startup that digitizes industrial services such as oil, gas, power, and manufacturing. The startup’s core product, DataOps, contextualizes data, AI, machine learning, and algorithms so companies can enable the creation of apps at scale. These apps help customers see relationships in data that they couldn’t have imagined before which accelerates the digital transformation of the industrial sector. The capital infusion will be invested in scaling the business.

Beta Raises $368M Led by Fidelity and Amazon’s Climate Fund.Beta Technologies is a startup that develops fully-electric vertical take off and landing aircraft and a related charging network. Beta has agreed to sell its aircraft to UPS, Blade Air Mobility, the US Air Force, and United Therapeutics. The new round of funding, which values the business at over $1B, will be invested in scaling their zero-emissions aviation business.

JD Logistics Raises $3.4B in IPO. JD Logistics is the logistics arm of JD, a Chinese eCommerce company. The company is looking to raise as much as $3.4B in a Hong Kong IPO and this could value JD Logistics Inc. at $34B. JD relies on JD Logistics to store and quickly deliver everything from groceries to gadgets all over China which helps JD compete with Alibaba. Overall revenue for JD Logistics was $11.4B and that is a 47% increase over the previous year. The logistics company is planning to offer 609.19M shares at a range of 39.36 to 43.36 Hong Kong dollars each.

Blackstone Acquires St. Mowden for £1.2B. Private equity giant Blackstone has acquired St. Mowden a British property logistics developer. In recent years, St. Modwen has shifted its focus toward logistics development and investment which now accounts for 49% of the company’s portfolio. Blackstone paid 21% above the market price of St. Mowden the day before the offer was launched, highlighting the value it sees in the property logistics space.

Gojek and Tokopedia Merge to Form GoTo Group. Gojek, an Indonesian ride-hailing company, has merged with Tokopedia, an Indonesian marketplace, to form GoTo group, the largest technology group in Indonesia. The new company is preparing for a dual listing in New York and Jakarta later this year and the proposed valuation of the new company is $18B. The two companies began working together in 2015 to accelerate eCommerce delivery using Gojek’s local network of drivers.

Siemens Acquires Supplyframe for $700M. Industrial giant Siemens has acquired Supplyframe, a sourcing intelligence platform. Siemens believes that Supplyframe’s ecosystem and marketplace intelligence will strengthen the services that Siemens can offer for small and medium businesses.

Accel-KKR Acquires GPS Insight. Accel-KKR, a leading tech-focused private equity firm, has acquired GPS Insight, a fleet management software leader for class 3-6 fleets in the US and Canada. Both parties believe the acquisition will help GPS Insight accelerate its growth while providing best-in-class service. Terms of the deal were not disclosed.

SPAC Radar 📡

Bright Machines in $1.6B Deal with SCVX Corp. Bright Machines is a platform that uses AI to automate routine tasks in manufacturing such as assembly and inspection. Several other advanced manufacturing and 3D printing companies have gone public via SPAC in the past few months including Velo3D and Desktop Metal. The company, which has 25 customers, is expected to generate $435M in cash proceeds from the roughly $230M held by the SPAC and $205M from the PIPE.

Company Building 🛠️

Product Culture at Stripe. “Shaping is the process of creating a rough solution to a concrete user problem — it fills the space between the broad strategy and the detailed product specification, or the PRD.”

Customer Segmentation 101. This might seem like a “scale up” company exercise but we notice how founders can often struggle to identify THE customer that matters at seed stage. This is important because one wants to ID a beachhead “just big enough” and double/triple down on product and sales within this segment. A worthwhile exercise to support efforts to drive P/M fit.

VCs Not Leading the Unicorn Parade This Year. Leading investors this year is Tiger Global who has 45 unicorns in 2021, leading Insight at 22 and Accel, with 19. There are interesting implications for the broader VC ecosystem but that feels like fodder for a podcast.

Who's Hiring? 👩‍💻

Senior Product Marketing Manager at Nextmv in Philadelphia, PA (remote ok).

BDR at Milk Moovement in St. John’s, Halifax (remote ok).

Senior Developer Evangelist at Tangram Vision in San Francisco, CA (remote ok).💥 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.