Dynamo Dispatch. A 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 💭

Well, we are back in Chattanooga after spending a few days in New York City with our portfolio companies. We’re thrilled we were able to see all of our founders (in-person might we add) and hope everyone was able to find valuable insight from the programming.

In other event news, Founders Camp applications are now live! If you know of any interesting startups in the supply chain space, spread the word and have them apply.

We Are Dynamo,

Clay, Santosh, Jon, and the rest of the Dynamo team

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Supply Chain 📦

🌟Mexico-Based Suppliers Gaining Ground In Global Manufacturing. “From 2020 to 2021, there has been a drop in sourcing from Asia-Pacific by ~30% and an increase in Latin America by ~150%, which is pretty significant.” The move to Mexico was fueled by high transportation costs and longer waiting times. On top of those two critical factors, COVID lockdowns in China led to even more shipping delays and route adjustments. As the demand from the US continues to grow, analysts highlight increasing concerns surrounding the limiting capacity of Mexico’s network of warehouses. For more news on nearshoring, see Mexico’s Border Bonanza Shows U.S. Importers Looking Outside China and Gap Inc To Scale Central America Sourcing.

Logistics Labor: Bringing Over Talent. With a labor crunch in full swing, employers across all sectors are facing steep challenges. A recent “Talent and Labor Study” from Modern Materials Handling found that 81% of warehouses and DCs want to fill open positions within the next 12 months. More specifically, warehouse workers (61%), transportation and logistics managers (45%), and warehouse managers and supervisors (42%) have the biggest demand. However, only 32% of survey respondents say that their companies are “highly prepared” to handle their workloads with current staff, while 62% state they’re “somewhat prepared.” In other news on labor across the logistics industry, Importers Ask White House To Engage On West Coast Contract Talks and Amazon’s Consumer Chief Dave Clark Joins Flexport As CEO.

Uber Eats To Deliver Across The Country. The food delivery arm of Uber is launching a new product that will allow customers across the US to get specialty food delivered from select merchants in NYC, MIA, and LA. This new feature comes a couple of weeks after Uber announced a slew of products aimed at targeting new users and offering as many services as possible to existing customers. Uber Freight will not be a part of this new product as nationwide shipping is made possible via a partnership with FedEx which has different plans following the announcement of a Partnership With Waymo Via For The Long Haul. On other news surrounding autonomous delivery trucks, see Gatik’s Plans To Deliver To Sam's Club Stores.

Reduced Orders To Test Asia-US Rate Strength. The coming two months are expected to reveal how much US importers are pulling back on orders from Asia and the degree to which container lines can adjust capacity as easing vessel space on some trades pulls down spot rates. Most recently, the number of orders for Asian imports to the US and Canada has been steadily rising since February, with orders to China in May jumping to ~150K, the highest monthly volume of new orders since November 2021, However, the spot rate from Shanghai to LA remains 46% higher than June 2021 at $8.7K per TEU. While forwarders expect a bump in spot rates in the coming weeks, the scale of the rate increase and length of the peak season is unclear as some shippers are pulling back or even canceling orders. In other port-related news, MSC Expedites Fleet Digitalisation and Biden Urges Shipping Reform During Port Of LA Visit.

iOS 16 Makes It Easier to Track Packages. Previously, users would need to download a third-party app from the App Store to track their parcels. With ‌iOS 16‌, Apple is building a tracker directly within the Wallet app for Apple Pay transactions. The tech giant says Apple Wallet order tracking will be available from millions of merchants through eComm platforms, starting with Shopify and expanding over time. The new integration will let merchants and couriers provide users with precise tracking information and notification. Other developments across technologies providing security, visibility, and tracking within supply chains include A Partnership Within KlearNow And Project44 and GXO Deployment Of Warehousing Robots And Drones From Asylon.

Target Warns Profit To Drop Due To High Inventory Levels. Target has warned its profit would drop because it needs to cancel orders with vendors and offer discounts to clear out unwanted goods, the latest sign of the sudden mismatch between supply and demand inside America’s stores. Big retailers benefited over the past two years from the pandemic rush to buy patio furniture, laptops, and home décor to name a few, as shoppers were buoyed by savings and government stimulus checks. Now many of those same stores are grappling with a swift reversal of buying behavior, with consumers spending less on goods in favor of services and necessities such as food and fuel. In response to current inventory management challenges, Target Plans To Build Five DCs while Walgreens Opens Inventory Visibility.

Air Cargo Volumes Sink As Ukraine War And China Lockdowns Hit Demand. The downturn in global air cargo demand intensified during April and is outpacing the slowdown in overall international trade in goods. More specifically, shipment volumes contracted 11.2% m/m in April, down 1% y/y from what was already a weak year for the air cargo sector. The drop follows a 5.2% m/m fall in March when seasonally adjusted volumes reached a 16-month low. Moving forward, The World Trade Organization revised its original projection for merchandise trade growth from 4.7% to 3% and 3.4% in 2023. The increasingly gloomy environment for the air cargo industry has carriers discovering alternatives to keep business alive, with Cathay Pacific Using Boats To Move Cargo Faster and CMA CGM And Maersk Expanding Air Cargo Capabilities.

Mobility 🚗

Elon Musk’s Regulatory Woes Mount. The National Highway Traffic Safety Administration said it would expand a probe to look into 830K Tesla cars. The probe is looking into how autopilot might negatively impact driver decision-making. This came after the agency looked at a collection of accidents that revealed patterns in the autopilot function potentially creating dangerous situations. In other news, consider reading Hyundai's Self-Driving Taxis Roll Out On The Streets Of South Korea and Lawmakers Stall Over Self-Driving Cars.

GM Dangles $6K Discount to Stay in the Electric Car Race. GM made an interesting move this week by slashing the price of some of its electric models while competitors’ sticker prices are rising due to the various crunches in the supply chain. Despite not having supply to match demand for the vehicles, GM is likely trying to corner the market while pushing the development of its newer models. Before the cut, the Bolt EUV sold for $33,500. In other news, GM to Resume Bolt Production As Fix Found For Battery Fires.

Airlines Cancel Hundreds Of Flights Before Summer Travel Season Because Of Pilot Shortage. As a culmination of all of the labor problems airlines have been facing the past couple of months, they are going to be unable to meet much of the heavy summer demand. For context, Delta said it was canceling 100 daily flights from July 1 through August 7. US airlines have been reportedly trying to hire at least 12K pilots combined this year. In related news, check out ALPA Releases Data Showing Nearly 8K New Pilots Produced in Past 12 Months and Airline CEO Tells Staff To Push Through Fatigue.

Scoop: Democrats Meet With Ford Executive To Juice Talks On Electric Vehicles. Bill Ford Jr, executive chairman of Ford, met with Senate Democrats to advocate for legislative support for American manufacturing of EVs. This is good news for EV manufacturers as the possibility of increased investment trends upwards. There seems to be potential interest from both sides of the aisle to invest in domestic manufacturing at various points of the EV supply chain. In related news, check out VW Plans To Sell First EV In India In 2023 and Onshoring Semiconductor Capacity Is Crucial To National Security.

Global Automakers Face Electric Shock In China. Outside of Tesla, electric automakers will have problems selling into the Chinese market. This is emphasized by the fact that there were no foreign brands amongst the top ten automakers in the new energy vehicle segment of the country this year outside of Tesla. All the rest are Chinese brands well in position to take advantage of the spike in EV demand we’re seeing globally this year. The biggest complaint from Chinese consumers seems to be a lack of smart tech integration with many foreign EVs. This emphasizes the fact that many of Tesla’s American competitors are still well behind when it comes to smart technology within the car, furthering the gap between Tesla and the rest of the pack. In other news, consider reading EU Parliament Backs 2035 End Date For Combustion Engine Cars and UK: Plug-In Car Sales Growth Stalled In May 2022.

Low Inventory Is Warping The New And Used Car Markets, And It’s Starting To Drive Up Inflation. To no one’s surprise, the chip and metal shortage has been putting a serious hamper on vehicle supply. The cost of a new car has risen 12.6% since last year due to the combination of the various supply crunches and continuously increasing demand. The rising prices have caused consumers to sit out of the car buying process, leading to several automakers posting real decreases in sales compared to last year. Used car prices have also seen a huge spike, rising 16% over the past year, and in many cases competing with new cars of the same model. In other news, The Pandemic Has Pushed Car Buying Online. It’s Expected to Stick.

Lyft Plans To Build A Hybrid Network Of Autonomous And Driver Vehicles, Co-Founder Says. As a bridge to a fully autonomous fleet, Lyft's president says that they will employ a hybrid network. The initial split will see the standard rideshare driver used ~95% of the time while the remaining 5% being autonomous. This split will be useful in areas that see a driver shortage and give Lyft a lot more flexibility if proven successful. In other news, look at Soaring Gas Prices Are Forcing Some Uber, Lyft Drivers Off The Road and Uber’s CEO Says Company Is ‘Recession Resistant,’ Sees No Job Cuts.

Fundraises and M&A 💸

Inauro Raises $2.1M Led By SafetyCulture. Inauro was created to realize the value of IoT technology across industrial applications and improve everyday operations. It has built a customer base spanning logistics, agriculture, manufacturing, and construction. The funds will be used to expand into new markets.

AI Build Raises $3.2M Led By ACT Venture Partners. AI Build is an additive manufacturing software platform. It enables companies in the aerospace, automotive, construction, marine, and energy verticals to fully automate the additive manufacturing process from plan to print. The funds will be used to further develop its technology stack.

Trendi Raises $4.8M Led By WGG Capital Canada And Vestech Partners. Trendi is a robotics startup dedicated to rescuing and upcycling food waste into valuable products. It was founded in 2019 and was recently named a semi-finalist in the Government of Canada's Food Waste Reduction Challenge. It has since built a substantial team of scientists, engineers, innovators, marketers, and food waste heroes to spearhead several projects and initiatives for the company.

Teleo Raises $12M Series A. Teleo turns construction and mining equipment into semi-autonomous robots. Investors include UP. Partners, F-Prime Capital, K9 Ventures, and Y Combinator. Along with the funding, the company is officially partnering with RDO Equipment Co., a construction equipment and technology supplier and one of John Deere’s largest dealerships.

Trunkrs Raises €15M Led By Korys. Dutch startup Trunkrs is on a mission to improve same-day and next-day delivery offerings for the growing eComm sector. The company is one of the Netherlands’ leading delivery partners to premium eComm players, and, in 2021 expanded to Flanders. The funds will be used to scale its platform.

Swoop Aero Raises $16M Led By Main Sequence. Swoop Aero is an Australia-based drone delivery company. It has completed over 2 years of continuous drone delivery of medical supplies across Africa and delivered over 800K items by drone. The funds will enable the company to enter into new markets, scale its integrated logistics networks, and expand Australian manufacturing capabilities.

Toters Raises $18M Led By World Bank Group’s International Finance Corporation. Toters is a Lebanese super app that offers food delivery, grocery delivery, payment services, and courier services. The funds will be used to expand into Iraq.

Onfleet Raises $23M Led By Kanye Partners. Onfleet develops last-mile delivery software. The company claims its software facilitates millions of deliveries per week for thousands of businesses. The funds will be used for product development, expanding Onfleet’s product and engineering capabilities, and enhancing its enterprise offering.

Quantum Systems Raises $32M Led By Bayern Kapital. Quantum Systems build eVTOL drones. The drones made by the company serve a variety of use cases both in the defense and security sector, as well as for the geospatial industry. The funds will be used to scale production and R&D.

Vayyar Raises $108M Led By Koch Disruptive Technologies. Vayyar is a radar-imaging sensor technology company. Additional investors include GLy Capital Management, Atreides Management LP, Battery Ventures, Bessemer Ventures, More VC, Regal Four, and Claltech. The funds will be used to fuel expansion.

Minieye Raises $120M Led By Cathay Capital. Minieye is a China-based AV company. Minieye joins several AV companies including May Mobility, Momenta, Wayve, and 42dot that have attracted significant investment in recent months. The funds will be used to further develop its technology stack.

Alpega Acquires Road Heroes. Alpega, a European SaaS logistics company has acquired Road Heroes, a truck driver job search platform. The acquisition enables Alpega to provide a European-wide platform for hiring truck drivers. The transaction is expected to close in June with the availability of Road Heroes by Alpega targeted for July.

Porsche Acquires Fazua. Porsche acquires Fazua, an eBike manufacturing company. The acquisition enables Porsche to double down on the fast-growing micromobility market. After buying into the company with a 20% stake in January, Porsche now acquires all of Fazua’s shares.

Schneider Acquires deBoer Transportation. Schneider, a provider of transportation, intermodal, and logistics services has acquired Wisconsin-based carrier deBoer Transportation. As part of the acquisition, Schneider will assume ownership of approximately 160 tractors and 660 trailers from deBoer. The terms of the deal were not disclosed.

Descartes Systems To Acquire XPS For $140M. Descartes, a multinational logistics software company is acquiring XPS, a cloud-based parcel shipping service for eComm shippers. The acquisition of XPS complements Descartes’ investments in eComm fulfillment and shipping. Descartes has also agreed to pay up to an additional $75M in performance-based consideration related to revenue-based targets in each of the first two years post-acquisition.

Business Building 🛠️

You Really Have to Love Your VPs. “I’m no recruiter, but over the past years I’ve “placed” probably 50 folks I know in promising SaaS start-ups as VPs or Directors. The key here is I look not just for the necessary experience (at same ACV, ability to hire a team), but also, a good personality match. People that would work well together.”

The Market Correction is Coming at Seed and Series A. Dynamo LP, Cendana Capital shares market observations they have across a portfolio of seed funds that are complemented by close Series A relationships. Put succinctly, Series As are no longer $20M for a $120M post-money but instead $10M for a $50M post-money. Further, quality Series A funds are pushing for strong revenue growth with sales clocking in at $1.5M-2M depending on the business. Seed rounds are also adjusting to a $4M at a $16M post-money type of a norm (~25% giveaway). Related, Coatue and JPM Weigh Structured Equity Fund as a sign of the times.

Tactical Guide to Work with EAs. “When leveraged correctly, an EA can be one of the most important tools in a startup team’s arsenal — freeing up space to focus on the thorniest challenges facing the business. But there isn’t all that much tactical information out there on how to specifically work with EAs — often, it’s just something leaders are expected to know how to do.”

Who's Hiring? 👩‍💻

Sales Engineer - AI - SaaS at Vector AI in Chicago, IL.

Senior Software Engineer at Token Transit in San Francisco, CA (remote ok).

Head of People at Solvento in Mexico City, Mexico (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.