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 💭

We’d like to take a moment now to thank all of you who subscribe to this newsletter and frequent our podcast - our community’s support for our Fund II announcement this week was amazing and exciting to see. If you want a recap of this past week’s news: WSJ, Freightwaves, Journal of Commerce, Our Blog, and Our Press Release.

For founders, we’d direct you to our latest podcast where Jon and Santosh breakdown Fund II and some of the opportunities they’re both contemplating across the supply chain.

Additionally, we want to thank Rachel and Emily who finish their Fellowship at Dynamo this week. We’ve thoroughly enjoyed our time with them the last six month and are excited for their next steps.

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 📦

Mounting Evidence That Container Crunch Will Persist Until 2022. In the middle of the pandemic, many believed that once Americans began spending more on services instead of goods demand for goods would normalize and container rates would return to normal. Yet this demand for goods has not waned even though Americans have spent more on services in the past six months and there are no signs of that relenting anytime soon. Ongoing congestion at ports, low inventories, and continued strength among consumers is expected to keep container logistics stressed into 2022. We are cautious of the economic stress the sector could cause if consumers (the largest portion of GDP) are unable to receive the goods they desire/have the intention to purchase. In other container news, DOT Meets With Container Lines, Retailers on US Port Congestion and Carrier Service is Still Poor, Despite Containers Rates Being High.

US Business Logistics Costs Fall 4% in Pandemic Year of Chaos. US businesses spent 4% less on business logistics costs due to the pandemic. This $1.56T spent on business logistics costs represents an all-time low of 7.4% of GDP. The pandemic chaos is the culprit for this decline. COVID-19 caused many supply chains to suddenly stop only to get back up and running in a sporadically efficient manner due to supply shortages, price increases, and other unexpected bottlenecks. Despite the decrease in dollars spent, the logistics sector was very efficient and recovered well compared to other parts of the economy due to the K-shaped recovery where sectors such as last mile delivery and eCommerce boomed while tourism declined. Additionally, transportation costs only rose 0.8% in 2020 compared to 4.8% in 2019, and motor carriage, ocean freight, and rail were down considerably compared to 2019. Most interestingly, the pandemic-induced push to digitize industries also cut costs due to the efficiency that technology can bring to industries. Many changes from this chaos aren’t going anywhere and the industry must continue to adapt. Related, State of Logistics: A Tale of Two Different Years and Fresh Covid-19 Outbreaks in Asia Disrupt Global Shipping, Chip Supply Chain.

US June Manufacturing Index at Record High, Services Dip. The IHS Market Flash Index, a measure of US manufacturing activity, expanded at its fastest rate since June 2007. This expansion is fueled by relaxed pandemic restrictions and a strengthening economy. While those in manufacturing are happy to see an increased demand for their services, factories are still struggling with supplier delays, high costs for materials, and an industry-wide labor shortage. This index also takes into account manufacturers’ output price which is at its highest level since 2007. The increase in both of these measures is doing nothing to quell fears about inflation. In other manufacturing news, American Manufacturing Is Back—Almost and US Manufacturing Activity in Mid-Atlantic Picks up in June.

UPS Raises Large Parcel and Domestic Surcharges to Prep For Peak. UPS has announced increased surcharges on many domestic shipments since logistics demand has increased. Beginning on July 4 the company will raise handling surcharges from $3 to $3.50/package and for large packages, the surcharge will increase from $31.45 to $40. Starting on October 3, these charges will rise from $6 for additional handling and $60 for large parcels. On October 31 surcharges for air residential, ground residential, and SurePost will go up and new prices will apply for those who shipped more than 25K parcels during any week of February 2020. The new price range for these services will be $1.15-$6.15 per package which is higher than the $1-$4 last year. UPS is not the only company raising prices as FedEx also began increasing prices for air and ground parcels this week. While the prices have angered some shippers to the point that they want to find an alternative carrier, UPS insists that these surcharges are essential to keep up service during a period of unprecedented demand. In related carrier news, Regional Parcel Carrier LSO Expanding Coverage Area, FedEx Sinks on Higher Spending, Labor Costs Amid Parcel Boom, and Amazon to Collaborate With AV Startup Plus.

US Needs 330M ft² of Warehouse Space to Keep up With eCommerce. The US will need to add 330M ft² of warehouse space to keep up with demand by 2025 according to a new report from CBRE. This increase will be driven by an expected 26% rise in eCommerce sales that the US will see in the next four years. This uptick in both warehouse space and eCommerce volume is not limited to the US alone. The report expects there to be a 1.5B ft² increase globally, to keep up with a $1.B in new global eCommerce sales. Currently, vacancy rates in the US and other nations have been low and some warehousing companies have seen a 25% cost increase in warehouse construction since December that’s been passed along in rent increases. Consider that the first-year warehouse rental rates from January 1-May 31 2021 have increased by 9.7% compared to that time last year. Across the pond, Online Shopping Boom in Pandemic Drives Demand for UK Warehouse Space and Amazon Warehouse Destroying Items on Video Prompts Action in the UK.

Port Congestion and Rising Demand Forces Carriers Into Schedule Adjustments. Increased demand and port congestion is forcing carriers to temporarily adjust their linear service networks. With extended wait times for berths on the US west coast and at many European ports, attempts by shipping lines to recover a vessel’s schedule are being thwarted. Companies agree that the causes for these bottlenecks are the pandemic and the rapid increase in demand over the past few months. The overall accumulation in delays is topping seven days on some shipping routes and that will cause issues for shippers all over the globe. On top of this, linear schedule reliability is at record lows and many carriers are arguing that the recent surge in demand for reliability is unfair. Across the Pacific, Chinese Port Difficulties Amid a COVID-19 Outbreak Further Snarl Global Trade and across the Atlantic Carriers Cut North Europe Hubs as Port Bottlenecks Grow.

Moderna Plans to Expand Production to Make COVID-19 Vaccine Boosters, Supply More Countries. This week Moderna announced plans to expand the production of the COVID-19 vaccine in order to produce more vaccine doses and booster shots. The company hopes that this expansion will serve as a supply to countries that have vaccinated their population at a slower rate than in the US. Much of this increased manufacturing effort is designed to shore up the vaccine supply chain outside of the US with a goal to triple the 1B vaccines that the company has manufactured this year. If Moderna is able to produce 3B vaccines, it will be a feat of supply chain management. Currently the company is exploring ways to procure additional plastics bags, tubes, and filters that will be essential for the production of the vaccine. The company then has to secure the appropriate manufacturing space and firm up relationships with potential material vendors and supply chain partners. Since December, Moderna has produced more than 200M vaccine doses in the US and wants this investment in production to substantially increase the 40M-50M vaccine doses that the company produces in a month. Totally unrelated, What’s The Value of FreightTech Patents? For Omnitracs, Maybe Nothing.

Mobility 🚗

Bird and Spin Release New EVs Amid Pressure to Catch up to Lime. This week Bird released a new eBike and Spin released a new, more rugged eScooter. Industry experts see these new vehicles as a way to catch up to Lime and its 200M riders. Bird has always flirted with the idea of eBikes and told investors as it was merging with an SPAC last year that it would produce eBikes in the near future. The new eBikes have a speed of 15.5 mph, a range of 56 mi, diagnostic capabilities to identify potential problems, and will be available in select North American and European cities. Spin’s new eScooter the S-100T has the industry’s first stop brake and can endure extreme heat, extreme cold, and extreme humidity. Spin also announced that the new eScooters will have North America’s first swappable eScooter battery to create a more sustainable charging procedure. All of the top micromobility providers agree that the expansion of their product offerings will not only increase competition, but transform urban mobility, create 15 min cities, and drastically reduce emissions which benefits their bottom lines and the planet. Elsewhere in the micromobility space micromobility news, eScooters as a New Micromobility Service and Where eBike Ridership Grew in the US.

US Infrastructure Deal Would Fund eBuses, Charging Stations. This week President Biden endorsed a bipartisan infrastructure plan that would include billions of dollars for investment in EVs and EV infrastructure such as charging stations. The $1.2T plan would include $15B for EV charging stations, $25B for eBuses, and $20B for eSchool Buses. The Biden administration said in a statement that the bipartisan legislation would “build 500,000 EV charging stations across the country and electrify thousands of busses and school busses.” This multi-billion dollar investment may not encompass all of the spending that the Biden administration plans to do on EVs this year. Democrats in Congress are pushing to pass another plan that would provide an additional $100B on EV rebates. Two of the biggest EV manufacturers in the nation GM and Tesla no longer qualify for $7.5K EV tax credits. In other US eBus news, DC Metro Plans to Transform its Bus Fleet to Electric by 2045 and Atlanta Gets $5.4M to Buy its First eBuses.

European Auto Industry Braces for Tougher CO2 Emissions Targets by 2030. The EU will release the “Fit for 55” proposal on July 14 which aims to drastically reduce auto emissions. The proposals that are under discussion reportedly include a 60% emissions cut by 2030 and a 100% emissions cut by 2035. This would mean that automakers can’t sell combustion engines in the EU by 2035. Many European automakers are enthusiastic about EVs and have announced plans to speed up the production of EVs, but think this rumored plan is too drastic since it would essentially force automakers to stop selling combustion engines in the next 10-15 years. The German VDA issues a statement saying such a drastic and rapid cut would be harmful because it would not give any consideration whatsoever to consumers. Others in Europe see this proposal as a good thing. At the G7 the UK announced plans to stop selling combustion engine cars by 2030 and Volvo announced its ambition to stop selling combustion engine cars by 2030. Elsewhere in Europe, Battery Deficit Risks UK Driving Electric Jalopy and Brussels Region to Ban Diesel Cars by 2030, Petrol Cars by 2035.

Gigafactories: Europe Tools up Against US and Asia as a Car Battery Force. European countries are laying the foundation to manufacture millions of EV batteries at gigafactories all over the continent as EV adoption accelerates. Many in the industry are impressed by the continent building up an industry that hasn’t existed at this scale before. The batteries that these gigafactories produce won’t just power passenger cars, but trucks, busses, and other two and three wheeled EVs. This has the power to make Europe the foundation of the EV industry and that has created a gold rush like atmosphere in some countries such as Sweden where Northvolt will be setting up its gigafactories. European automakers hope this investment will help wean the continent off of diesel-powered vehicles, but also help them compete with Asian automakers who have already built gigafactories in Europe. They will face steep competition from international automakers, but the European automakers hope that their close ties with universities, ability to attract top talent across the continent and the continent-wide push to EVs will prove to be their competitive advantage against international automakers. Related Volvo and Northvolt to Team up on New Battery Gigafactory and UK in Talks to Build Battery ‘Gigafactories’ for EVs

Why Bacteria Could be the Key to Recycling EV Batteries. How to handle used EV batteries is one of the most pressing questions as EV adoption becomes more widespread. EV batteries have a life of 8-10 years and their current supply chains are geographically isolated in geopolitically fraught countries such as China. This has led many to explore how to make recycling EV batteries a more viable option and bacteria could be one way to do that. The practice of bioleaching, where microbes can oxidize metal as a part of their metabolism, has been used to refurbish other metals and could do the same for EV batteries. The bacteria in bioleaching can recover battery metals without the need for toxic chemicals or high temperatures. The resultant metals constitute chemical elements so they can be reused in other supply chains and potentially other EVs. Bioleaching also has a much smaller carbon footprint than typical battery recycling so the process would not emit the carbon that EVs tend to take out of the air. Related, Recycling EV Batteries: An Overview.

Daimler Set to Bring Fossil Fuel Exit Forward. Daimler is planning to eliminate its reliance on fossil fuels earlier than expected due to new potential regulations from the EU. A number of the automaker’s 2024/2025 models are now set to be released a model year earlier and more than half of the current model year cars will only have electric drives in the new version. The automaker is also said to be pondering EV battery production which is something that it has rejected until now. Daimler officially announced its plans to phase out combustion engines by 2039, but is now on an accelerated time table. The company has been looking at releasing its S-class models as plug-in hybrids or EVs by 2028, but is now realizing that it must act sooner due to political considerations. The European Commission could announce plans to ban combustion engines by 2030 and the German Green Party which is poised to do well in the upcoming federal election also wants to ban the combustion engine by 2030. Other German automakers such as Audi and BMW have taken drastic steps to phase out the combustion engine and Daimler could be following in their footsteps. Elsewhere in Deutschland, Audi Will Release Final Petrol and Diesel Cars in 2026 and Porsche Plans to Make EV Batteries for Racing.

EV Charging Providers to Allow Roaming Across Their Networks. In a move that could accelerate EV adoption, a handful EV charging companies have announced that they will allow roaming across their charging stations. The initiative led by Greenlots and Chargepoint will allow EVs to be charged on any station regardless of the automaker that produced the EV. Currently, most EV drivers can only charge their vehicle where they have set up an account. This new move would eliminate the politics around EV charging and make it more accessible for EV drivers. The exception is Tesla. Since 2012 Tesla has relied on their proprietary network to charge their EVs and the consumer would be billed on the backend. This new roaming plan does not include Tesla, but it seeks to offer consumers the same level of convenience that Tesla does. The confusion over and lack of EV charging infrastructure is one of the largest hurdles towards widespread adoption. Changes such as this one could do a lot to quell consumer fears over EVs and be the impetus that they need to make the switch from a combustion engine vehicle to an EV. In related charging news, Biden's EV Charging Push Could Boost Automakers Taking on Tesla and New York City Installs First Curbside Electric-Vehicle Charging Station.

Fundraises and M&A 💸

Electra Vehicles Raises $3.6M Led by LIFTT. Electra Vehicles is a Boston-based battery optimization startup. The startup helps OEMS strategically manage their battery-package software which can be up to 20% of a vehicle's cost. The new round of capital will be invested in further research and scaling the business.

Joyride Raises $3.7M Led by Proeza Ventures and Urban Innovation Fund. Joyride is a Canadian startup that provides white-label apps, back-end analytics, and multimodal fleet management services for micromobility companies. The startup operates in more than 160 markets in every continent but Antarctica and has been able to generate enough revenue since its founding in 2014 to support the business. The fresh capital will be invested in doubling down on its ability to help local operators finance a profitable micromobility fleet.

Caura Raises $4.2M Led by TwinFocus Capital Partners. Caura is a London-based vehicle management platform. The startup gives users a platform to upload their vehicle’s registration number to automatically set up payment services such as charges, tolls, taxes, and M&T insurance. The new round of capital will be invested in expanding its product line.

Phylum Raises $4.5M Led by First. Phylum is a startup that creates software for supply chain security. The startup helps companies defend their supply chain by identifying risks across their supply chain so they can stay ahead of potential cyberattacks. The new funds will be invested in scaling the business.

Ubco Raises $10M Co-Led Seven Peak Ventures, Nuance Capital and TPK Holdings. Ubco is a New Zealand-based eBike utility startup. The startup’s main product is an all-wheel drive electric motorbike that looks like a dirt bike but rides like a moped

The new round of capital will be used to fund global expansion and scale up its commercial subscription services.

Reibus Raises $20M Led by Canaan and Nosara Capital. Reibus is a b2b marketplace for industrial supplies. The marketplace aims to help companies tackle supply chain constraints by connecting buyers and sellers that would otherwise never transact. The fresh funds will be invested in adding new materials to the marketplace, adding new financial and logistics products, as well as opening up the marketplace to Canada and Mexico.

Safe AI Raises $21M Led by Builders VC. Safe AI is a startup that builds autonomous equipment for mining and trucking. The startup’s technology enables the transformation of mining and construction sites and helps companies deal with chronic labor shortages. The new capital will be invested in further research and development.

Electric Hydrogen Raises $24M Led by Breakthrough Energy Ventures. Electric Hydrogen is an energy company that creates technology to help the world decarbonize. The company produces hydrogen gas which could be critical in helping the industrial cycle decarbonize. The latest funding round will be invested in product development and further expansion.

RoadSync Raises $30M Led by Tiger Global Management. RoadSync is a point of sale system that automates routine business transactions for logistics companies. This “Square for logistics” aims to make the industry more efficient by automating invoices, payments, and other features. The fresh funds will be used to expand the team and invest in strategic partnerships.

Sendle Raises $35M Led by AP Ventures. Sendle is an Australian startup that offers flat rate shipping for small businesses in the eCommerce space. Sendle offers local and national shipping rates, but unlike other providers shippers pay flat rates based on weight. The new round of funding will be invested in building and scaling the company’s US operations.

Vehicle Tracking Solutions Raises $70M Led by LLR Partners. Vehicle Tracking Solutions (VTS) is a company that helps fleet organizations transform how they make business decisions. The company is a pioneer in telematics and fleet management and has differentiated itself as a business through its client-first approach. The capital infusion will be used to accelerate growth.

ShipHero Raises $50M Led by Riverwood Capital. ShipHero is an eCommerce fulfillment and outsourced logistics platform. The company provides best-in-class warehouse management as a service and next-generation fulfillment for DTC brands. The fresh round of funding will be used to accelerate growth and capitalize on new opportunities.

WeRide Raises $310M. WeRide is a Chinese startup that aims to produce level 4 AVs. This fundraise is the second time that Nissan has invested in the Chinese startup and the automaker sees this investment as crucial to the future of mobility, The capital infusion will be invested in further research, development, and testing.

LendBuzz Raises $360M Led by Wellington Management. LendBuzz is a Boston-based auto finance platform. The company works to modernize the auto finance industry by offering its services to customers with little to no credit history and partners with potential dealers who would sell them cars. The new round of capital will be used to support the company’s rapid growth.

Full Truck Alliance Raises $1.57B in IPO. Full Truck Alliance is a Chinese trucking company that connects shippers and truckers and it made its debut on the NYSE this week. The company’s stock rose more than 18% in its debut giving it a valuation of $24B making it the biggest US stock market listing this year. Full Truck Alliance’s stock was priced in the top of its $17-$19 range. Many Chinese startups have tapped into US markets so they can access the deepest pool of capital in the world and avoid the regulatory scrutiny of Asian exchanges such as Hong Kong.

SPAC Radar 📡

Quanergy Systems in a $1.4B Deal with CITIC Capital Acquisition Corp. Quanergy System is a company that develops solid-state silicon lidar sensors. The company, which has had a rocky road so far, has more than 350 partnerships and 40 partnerships globally. The deal is expected to close in the second half of 2021 and will include $278M in pro forma cash and $40M in PIPE.

Embark Trucks in a $5.2B Deal with Northern Genesis Acquisition Group. Embark Trucks is a company that produces self-driving car software that partners with shippers to bring down carrier costs and make roads safer. The company has partnerships with many trucking and brands such as Anheuser-Busch. The deal will close in the second half of 2021 and generate $615M in cash as well as a PIPE whose amount was not disclosed.

Hyzon Motors in Deal with Decarbonization Plus Acquisition Corp. Hyzon Motors is a company that produces hydrogen fuel cells for heavy-powered vehicles. The two year old company sees the SPAC route as the best way to finance their further research, development, and expansion instead of a traditional IPO or other means of financing. Terms of the deal were not disclosed.

Company Building 🛠️

Designing for Flow. How Superhuman designs for flow to turn something mundane and boring into something that’s playful and fun.

The Hogan Assessment - Dark Side. Santosh is hot off his Kauffman Fellows module where he was introduced to Hogan Assessment’s Dark Side survey that shines a light on the qualities an individual might exhibit under duress/stress. It could be an interesting tool in leadership development for many organizations given that the traits that give us strength can equally drive our weaknesses when left unchecked.

The 25 Micro-Habits of High Impact Managers. No summary will do this justice - just read it.

Who's Hiring? 👩‍💻

AE at Nextmv in Philadelphia, PA (remote ok).

Implementations Manager at Stord in Atlanta, GA (remote ok).

Technical Onboarding Manager at Milk Moovement in St, John’s, Halifax (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.