Dynamo Dispatch. Weekly update from Dynamo Ventures covering the latest and greatest in supply chain, mobility, and building venture-scale businesses.

💥 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.

Weekly Commentary 💭

ICYMI, check out Founders Camp 2021 in November. A cost-free program for Seed and Series A startups looking to get sales introductions to our network of corporate executives. Apply now!

We Are Dynamo,

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

Note: please add “[email protected]” to your email client, so you don’t miss future issues due to aggressive spam filters.

Supply Chain 📦

Meat Buyers Scramble After Cyberattack Hobbles JBS. Meat buyer JBS, which is the world’s largest meat company by sales and processes nearly one-quarter of the meat and pork in the US, was hit by a ransomware attack that took a large part of its US beef and pork processing offline and left buyers scrambling to find alternatives. The attack hit some of the company’s IT systems but didn’t hit its backup servers--which would have meant more severe impacts. The attack halted operations at plants across the Midwest, Texas, Canada, and as far away as Australia. By Wednesday JBS said the majority of its plants would be operational again. JBS told the Biden administration that they believed the attack likely came from a criminal group based in Russia. Meat market analysts expect that this attack could lead to higher consumer prices and could further disrupt food supply chains. Related, Cyber-Attack on Major Shipper Adds to Food Supply Chain Woes and No One Knows How Much US Meat Costs After Cyberattack Jams Report. 

How the World Ran Out of Everything. The “Just-In-Time” manufacturing that Toyota pioneered has been the supply chain standard for the past half-century, but it has left manufacturers vulnerable over the past year. This strategy, in which parts are delivered to factories right as they are required, has been the force behind the world running out of everything from semiconductors to PPE. Executives began to implement this strategy in the 1980s as a way to save money, but it went too far.  From 1981-2000 Just-In-Time manufacturing meant that American companies reduced their inventory by 2% each year. This is linked to reduced inventories and increased profits which lead to an increase in stock buybacks. The Just-In-Time strategy was designed to help Toyota recover from World War II and relied on Toyota’s suppliers being close to home. Toyota didn’t want to rely on warehousing and needed to make the most out of limited materials. Global trade has meant that suppliers can be an ocean away and management struggled to adapt to changing incentives. COVID-19 was not the first disaster to disrupt the supply chains, but it has been the first that has sparked a movement away from lean supply chains to resilient ones that no longer rely on a decades-old model to lead supply chains and manufacturing into the future. In other inventory news, US Retailers Rush to Secure Holiday Season Stock and Modest Inventory Bump Not Likely to Slow Freight’s Flow Anytime Soon.     

April Air Cargo Uptick May Have Signalled 'False Dawn' for Recovery as May Dips. In May air cargo saw a 4% dip in demand while the month saw a dynamic load factor of 69%, up 7% from 2019 – based on volume and weight of cargo flown and capacity available – it represented falls of 2% and 4% versus April and March this year. On top of this, capacity was down 21% in 2019, showing available uplift is decreasing again. Capacity was also down 14% and 18% in March and April, respectively, compared with the same period. Industry analysts see cause for concern in May’s price dips. Particularly in the 9% decline in air cargo volumes ex-Europe versus May 2019. Many see continued market uncertainties and the month’s extended public holidays as the main reasons for the drop and wonder if April’s high air cargo numbers weren’t the best barometer for the future. In totally unrelated airplane news, The Great Private Jet Shortage? and United Plans to Buy 15 Supersonic Planes.  

For DoorDash and Uber Eats, the Future Is Everything in About an Hour. Both Uber Eats and Door Dash believe that “next-hour commerce”, the delivery of everything from alcohol to pet food in an hour or less, will be key to both growth and profitability. Food delivery apps are looking for ways to hold on to customers that they acquired during the pandemic and executives are betting that a wider range of more profitable services will be key to achieving that. In Q1 DoorDash’s non-restaurant business grew by 40% and Uber Eats’s non-restaurant orders grew by 70%.  Retailers such as Macy’s and Petco began using last-mile delivery services during the pandemic and used them since they are a cheaper option since the company doesn’t have to spend on marketing or discounts to drive orders. Other retailers such as Walgreens are impressed by the platform’s ability to carry all of their items rather than the select handful that others carry. GoPuff, the “next-hour commerce” pioneer, is even teaming up with Uber Eats in an attempt to fend off DoorDash. Elsewhere in the last-mile delivery space, Instacart Bets on Robots to Shrink Ranks of 500K Gig Shoppers and Inside Uber’s Plan To Take Over City Life. 

How Supply Chains Contend With Severe Weather and Climate Disasters. Fires, floods, deep freezes, and hurricanes are occurring at a greater frequency and can wreak havoc on supply chains. As these climate-related threats evolve the industry has to evolve with them.  In the wake of Superstorm Sandy, ports in the New York City area invested in new ship-to-shore gantry cranes with elevated motors. The recent deep freeze in Texas has forced the trucking industry to update its routing technology and tackle infrastructure-related problems. With increasingly intense fire seasons in California, logistics managers have had to rethink contingency planning for when fires clog and cut off freight arteries, creating choke points for inventory traveling via truck and rail. One way to do this is to seasonally move inventory or buffer stock away from the areas during high-risk times. Trucking companies are looking into better communication tools to keep drivers out of harm's way as yet another above-average hurricane season is on the horizon. AVs even have to adapt to climate change. As severe weather becomes more prevalent throughout the country, AV companies are developing more advanced lidar and radar technologies as well as collecting more data so AVs can develop a human instinct for how to deal with severe weather. As the climate changes, the industry must as well. Since this week marked the first official day of Hurricane Season, Hurricane Season Could Cause More Shortages and Disruptions in the Nation's Supply Lines.

The Southwest Is America’s New Factory Hub. ‘Cranes Everywhere’. The American Southwest is using its open land, local tax breaks, and tech-savvy workforce to lure manufacturers to the region. According to the Bureau of Labor Statistics, Arizona, Nevada, New Mexico, Oklahoma, and Texas have added more than 100K manufacturing jobs from January 2017 to January 2020. This represents 30% of US job growth in that sector and at roughly triple the national growth rate. Some of the Southwest’s growth has come at the expense of California. In 2019, nearly 2.7K manufacturing workers in Nevada, 2K manufacturing workers in Texas and 1.3K manufacturing workers in Arizona arrived from California. The proximity to the West Coast, especially the Port of Los Angeles, is a huge driver to the Southwest compared to other states such as North Carolina. The cost of living is another driver.  The average employee earns around $17/hour in the manufacturing sector and that gets them much further in Nevada where rent is less than $1K per month than in parts of California where it is more than $2K per month. These states are also putting a huge emphasis on workforce development. Arizona State University opened up a new school devoted to manufacturing and has doubled the number of students enrolled in its engineering program. In the realm of manufacturing, TSMC Has Begun Construction at its Arizona Chip Factory Site and Will Push to Revive Domestic Semiconductor Industry Leave Oregon Behind?

Supply Chains Pressured in China as Ships Avoid Virus-Hit Port. Global shipping lines are avoiding the Port of Yantian in China due to a COVID-19 outbreak. The outbreak has spurred tightened health and safety checks that have caused congestion at the port and cancelations of calls there. The port also stopped accepting export-bound shipments and suspended three births in order to contain a COVID-19 cluster in the community. Ships skipping Yantian has led to increased congestion at neighboring ports in the country such as Shanghai, Ningbo and Xiamen. While Yantian is just beginning to accept containers again, many industry experts believe that there will be an additional 7-10 days of delays. These delays and bottlenecks will likely inflict further pain on exporters who are already dealing with exorbitant shipping costs from China, pent up consumer demand, and a surge in eCommerce. Also, Weary Seafarers Come Ashore in US for J&J One-Dose Shots and Oakland, Seattle-Tacoma Act on Mounting Vessel Congestion. 

US Manufacturing Gains Steam; Raw Material, Labor Shortages Mounting. US manufacturing climbed in May, but some work went unfinished due to labor and raw material shortages. According to the Institute for Supply Management, manufacturers continue to struggle to meet increasing levels of demand," noting that "record-long lead times, wide-scale shortages of critical basic materials, rising commodities prices and difficulties in transporting products are continuing to affect all segments of the industry. The ISM’s index for national factory activity climbed to 61.2 last month which was up from 60.7 in April (a reading over 50 indicates for manufacturing expansion). 16 manufacturing industries reported growth in May. Only printing and related support activities saw a contraction. On the labor front, measures of employment in factories dropped to a 6 month low. This is in spite of an overwhelming majority of companies hiring and these companies are struggling to fill positions even with more than 10M Americans unemployed. This labor shortage on top of a raw material shortage has created bottlenecks and the slowest factory deliveries since 1974. This shortage is keeping prices elevated and could create even more inventory and manufacturing shortages. ICYMI, There’s a Mismatch Between Jobs That Are Open and Workers Searching and US April Factory Orders -0.6% vs -0.2% Expected. 

Mobility 🚗

Apple Relaunches Project Titan, With an Aim to Build a Real Car. Project Titan, Apple’s top secret car project, is showing signs of life after a potential partnership with Hyuandi fizzled out. The project may be more ambitious than previously imagined. Apple will be focusing the project on building an actual car rather than simply selling AV software to another automaker such as Hyuandi or Kia. Apple watchers and industry experts don’t think Apple will embrace the industrial mass production of their cars like Tesla does. Many believe that they will instead outsource the production--like they do with iPads, computers, and iPhones--to a company that they trust such as Foxconn or Magna. Some estimates have Apple releasing a fully-electric AV in 2024 or 2027 and many industry experts believe that we will see the fruits of Project Titan before the decade is done. Testing of this so-called mattress car is believed to have restarted and the number of autonomous miles that the cars have driven may have jumped from 7.5K in 2019 to over 18K last year. Big week for Apple Car news as Apple Loses Third Manager From 'Apple Car' in Six Months and Apple’s Massive Success with CarPlay Paves the Way for Automotive Ambitions. 

China Hones Control Over Manganese, a Rising Star in Battery Metals. China produces more than 90% of the world’s manganese which is an essential ingredient in the production of EV batteries. Manganese ore is relatively abundant throughout the world, but nearly all of it is refined in China. China’s tight grip on this metal could spell trouble for the auto industry since three-quarters of the lithium-ion batteries and EVs are produced in China. Since last October Chinese manganese processors have joined a state-run “manganese innovation alliance” which has set production goals, such as centralizing control over key products, coordinating prices, and stockpiling, and networks for mutual financial assistance, that others in the industry are calling a cartel. This squeeze has sent prices of the metal soaring worldwide and has led automakers such as Nissan to diversify risks by establishing supplies from multiple origins. China’s cartel-like behavior has spurred new non-Chinese projects to refine the metals needed for EVs, but industry analysts believe it could be years before these projects are production-ready. In other news, Australia's Wyloo Bid for Canada's Noront Shows Battery Metal Scramble and Global EV Battery Sales Surge as Demand for Clean Cars Booms.

The 1% Milestone. Sometime this month the total number of passenger EVs on the road will reach 12M and this represents 1% of cars on the road globally.  About 70% of those EVs have been sold in the past three years and the number of passenger EVs sold has been doubling every 18 months. Over 44% of those EVs are on the road in China, about 35% are in Europe, about 17% are in North America, and the rest are spread out in other markets such as Japan and South Korea. About 70% are battery electric vehicles and the rest are plug-in hybrids. While these numbers are impressive, they are barely a dent in the overall market and the race to cut carbon emissions. Even if battery electric vehicles represent 50% of all vehicles sold in 2030, they will only make up about 15% of the overall number of vehicles on the road. This is due to the sheer number of combustion engine vehicles currently on the road which will take a while to be replaced by EVs. There are still reasons to be optimistic. Combustion engine sales likely peaked in 2017 and automakers’ strategies have shifted to the production of EVs which will mean that the next EV milestones will be easier to reach than the 1% milestone. In other EV milestones, The UK Registered 125% More EVs in 2020 Than 2019, and China: Plug-In Cars Grab 10% Market Share In April 2021.

Purchasing Departments Mostly Score Higher With Suppliers. In the face of uncertainty, supplier relationships matter more than ever, according to the recent  North American Automotive OEM-Supplier Working Relations Index Study by Plante Moran. The study also found that six of the US market’s major automakers continue to operate in two tiers of supplier relations. Despite a year of supply chain troubles from pandemic shutdowns and microchip shortages, Toyota, Honda, and General Motors each saw higher grades for their supply chain management, as did the lower-tier Nissan, while Ford and Stellantis lost ground in this year’s study. The higher grades were mostly due to strong supplier-customer relationships which made certain automakers the “customer of choice.” One way GM was able to increase its score and achieve “customer of choice” status was through its enhanced effort to communicate effectively with its suppliers in a year of unprecedented tumult. Related, GM to Increase Vehicle Deliveries to Dealers: 'Help Is On The Way' and Are We There Yet? Automotive Suppliers Taking Different Routes To All-Electric Future.  

7-Eleven to Install 500 EV Charging Ports by the End of 2022. Convenience stores sell the vast majority of the gas purchased by consumers in the US, but they will need to adapt as EVs become more prevalent. 7-Eleven is looking to capitalize on this change. The convenience giant announced that they will be installing 500 direct-current fast ports at 250 locations across North America by the end of 2022. This is in addition to the retailer’s existing network of 22 charging stations which are located at 14 stores across 4 states. These DC chargers, which will be owned by 7-Eleven, offer faster charging times than Level 2 chargers. This is a boon to 7-Eleven because they can offer consumers a similar in-and-out experience that they are accustomed to having when they fill up their tank. The lack of charging infrastructure is an impediment to EV sales. Corporations such as 7-Eleven offering charging stations that are as ubiquitous as gas pumps could help reduce consumer hesitancy over EVs. In other charging news,  Russia to Invest $10B in BEV & FCEV Technology by 2030 and  Ford F-150 Lightning Reservations Reach 70K In One Week. 

BMW Gets Serious With 3 New EVs. BMW has announced the release of 3 new EVs including the iX xDrive 50 which is the company’s first eSUV.  The iX will have 516 horsepower, fully electric all-wheel drive, a range of 300 miles,  and will retail for $88,200. The eSUV also enables DC fast charging at up to 200 kW which means the EV can go from a 10% to 90%charge in 10 minutes if enough power is available. The automaker also announced the i4 eDrive40 and the i4 M50. Both sedans will have a range of 300 and 250 miles respectively and will retail for $55,400 and $65,900 respectively. Power for these vehicles comes from BMW’s fifth-generation eDrive technology, which locates the motor, power electronics, and transmission in one housing. With these new offerings, BMW is giving consumers a choice between performance and range, but the automaker still has a way to go on affordability. Elsewhere in Deutschland, Volkswagen Considers an IPO for Their Battery Division and Porsche Might Launch a Smaller, More Affordable eSedan. 

The Pandemic Was The Bloodiest Year for Driving in Over a Decade. The NHTSA estimates that 38,6080 people died in car accidents last year, a 7.2% y/y jump. Fatalities were up in every category with passenger vehicle deaths up 5%, motorcycle deaths up 9%, and bicycle deaths up 5%. This 13 year high in fatalities is in spite of a 13% drop in the number of cars on the road due to work from home and stay at home orders. This increase in fatalities is likely due to those who were driving, were more likely to engage in reckless behaviors such as drunk or distracted driving. Another culprit for these deaths could be wide roads. Wide roads were designed to alleviate traffic congestion when roads are at full capacity, but when they are empty they can encourage reckless driving due to the lack of cars.  These numbers don’t include deaths in parking lots, private roads, or those who died up to 30 days after an accident. If those are included the National Safety Council estimates that there were 42,060 deaths. Many in the industry are eager to see what the DOT could do to reduce traffic deaths, but they caution that designing new transportation systems is like “turning a battleship.” Related, US Drivers Voice Top Concerns Before Hitting The Road This Summer and The US Infrastructure Imperative: Making Our Cities Smarter. 

Musk Says Tesla Prices Increasing Due to Supply Chain Pressure. The price of Teslas will be rising in the coming months. In a response to a complaint from @Ryanth3nerd on Twitter, Elon Musk said that supply chain disruptions and the rising price of raw materials are to blame for the price increases. This is not the first time the EV maker has raised prices in the past year. In May, Tesla incrementally increased the price of its Model 3 and Model Y for the fifth time in a few months. In an April earnings call Musk said that the company had faced some of the most “difficult supply chain challenges” due to the chip shortage that has walloped the entire automotive industry, but Musk also said that the automaker is “mostly out of that particular problem.” Totally unrelated, Candela’s P-12 Electric Hydrofoil Water Taxi Unveiled, Costs 85% Less Than Gas Boats to Run and Hyundai's Hydrogen Truck Is Coming To America. 

Fundraises and M&A 💸

💥sennder Raises $80M Led by Baillie Gifford. Dynamo-portfolio company sennder has seen rapid organic growth in the past few years and is beginning to make acquisitions to scale up. The fresh capital, which makes sennder one of the best-funded digital freight brokers and the team plans to invest in expanding their European footprint, maturing their software offerings, and making more strategic acquisitions.  

Optiyol Raises $810K. Optiyol is a Turkish startup that optimizes routes for logistics providers. Founded in 2018, the startup specializes in digitizing last mile and long haul logistics operations with algorithms specially designed for direct deliveries to customers. The seed capital will be used to expand its presence in the US, European, and Middle Eastern markets

Faction Raises $4.3M Led by Trucks VC. Faction is a startup that creates 3-wheeled vehicles for driverless delivery. The startup builds 3-wheeled vehicles, which cost $30K, that can deliver cargo through a combination of autonomy and a remote worker using teleoperations to assist. The fresh funds will be used to expand their partnerships and scale their operational fleets. 

Realtime Robotics Raises $31.4M. Realtime Robotics is a startup that helps companies deploy robots with limited programing and offers adaptable controls that work for multiple systems at once. The startup’s technology can perform a variety of tasks such as pick and place machines, packaging and palletizing boxes. The new capital will be used to accelerate product development and expand into global markets. 

Hungryroot Raise $40M Led by L Catterton. Hungryroot is a NYC-based AI-powered personalized grocery service. The startup uses machine learning to build customers carts with fresh grocery recipes and assist with meal planning and at home delivery. The fresh capital will be used to expand the number of grocery offerings, grow their team, and invest in more technology development. 

Locus Raises $50M Led by Singapore’s Sovereign Wealth Fund. Locus is a startup that uses AI to help businesses map out their logistics. Their core technology automates logistics workloads such as planning, organizing, transporting and tracking of inventories, and finding the best path to reach a destination. The capital infusion will be used to expand into additional markets and grow their team. 

Shippo Raises $50M Led by Bessemer Venture Partners. Shippo is a startup that provides software solutions to eCommerce businesses and online marketplaces. The startup recently reached 100K customers and works with clients such as Bombas and Aesop. The fresh capital will be used to further scale the business. 

Flash Group Raises $150M. Flash Group is a Thai logistics startup. The startup is hoping to capitalize on the strong growth of eCommerce and online retail in Thailand. The capital infusion, which makes Flash Thailand’s first unicorn, will be used to expand elsewhere in Southeast Asia. 

Project44 Raises $202M Led by Goldman Sachs. Project44 is a Chicago-based company whose API serves as the “connective tissue” between transportation providers, 3PLs, shippers and their supply chain systems. The company announced that they crossed $50M ARR which is up 100% y/y and has more than 600 customers including Amazon, Walmart, and Unilever. The fresh capital will be used to continue its global expansion. 

Flink Raises $240M Co-Led by Prosus, BOND, and Mubadala Capital. Flink is a 6-month-old German grocery delivery startup that delivers an assortment of goods in 10 minutes or less. The startup currently operates in 24 cities across Germany, France, and the Netherlands and targets younger customers and those with smaller fridges. The fresh funds will be invested in further scaling of the business. 

Delhivery Raises $277M Led by Fidelity. Delhivery is India’s largest independent eCommerce logistics startup. The startup is among a handful of startups aiming to digitize the demand and supply system of logistics through a freight exchange platform. The new round of funding, which values the start up at more than $3B, will be used to expand its fleet size and to meet growing eCommerce demand.

Getir Raises $550M. Getir is an Istanbul-based grocery delivery app that delivers conviene items to customers in 10 minutes. In Turkey  the company operates 500 dark stores in 30 cities and is planning to expand their warehouse offerings and deliver hot meals. The capital infusion will be used for expansion into the US. 

FlixMobility Raises $650M. FlixMobility is a German transportation company that is best known for its FlixBus intercity buses. The company had to cut services during the pandemic, but due to their close ties with partners will allow them to ramp up quickly as the West returns to normal. The fresh capital will be used for further expansion in Europe and the US. 

SPAC Radar 📡

Wejo in $800M Deal with Virtuoso Acquisition Corp. Wejo is a connected vehicle data startup. Wejo works with Tier 1 suppliers to connect data in real time from sensors integrated in vehicles. The deal raises $330M in proceeds for Wejo, which includes $230M in cash and $100M in "PIPE."  The transaction will close in Q3 and Wejo will be listed on the Nasdaq public exchange. 

Who's Hiring? 👩‍💻

Senior Tender Manager at sennder in Berlin, Germany.

Product Designer at Backbone in New York, NY (remote ok).

SDR at Vizion API in Atlanta, GA (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.