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 💭

If you haven’t already, check out Founders Camp! We’re seeing applications from around the world and across the supply chain. It’s going to be a great event in November. Special thanks to our sponsors, Chick-fil-a, Lineage Logistics, Schneider National, Freightwaves, EPB, and Market Street Partners!

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Santosh, Jon, Barry, Ted, Katie, Skyler, and Clay

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Supply Chain 📦

FASB Appears Ready to Require Supplier Financing Disclosure. The Financial Accounting Standards Board (FASB) will be ready to implement this new standard that would require that companies disclose any supplier financing in regards to size and key terms. These types of financing can often be lumped under the accounts payable portion of the balance sheet and can leave some liquidity risk in the dark for investors. This is a rare interest although in 2018 the Bankruptcy of Carillion, a UK Construction Management Firm resulted in the abandonment of $2B of debt to suppliers. Also related, Trends in Trade Receivables Finance.

Container Ship Prices Skyrocket as Rush to Move Goods Picks Up. Ocean rates are hitting historic highs as a consequence of tight capacity and high consumer demand. A container traveling from Asia to the US West Coast is costing nearly $12,000, while the global average is sitting right below $8,500. Don’t expect this trend to dissipate anytime soon. Industry analysts are predicting these steep costs could carry into Q1 of 2022. In other container news, LA Port Hits Milestone for Processing Containers and Ever Given Finally Released From Custody in Egypt.

Kearney and CSCMP: State of Logistics 2021. This annual industry report is performed by the Council of Supply Chain Management Professionals (CSCMP), Kearney, and Penske Logistics. Some of these findings are that as we emerge from the pandemic logistics makes up 7.4% of GDP, intermodal rail freight is competing with trucking and various institutions begin recognizing climate change as the need for sustainable logistics practices is growing. Furthermore, overall logistics cost within the US decreased by 4%, of this holding cost with a decrease of 15% being the largest contributor. Other news in the industry, Real Pressure on Supply Chains': How Major Players are Balancing Costs, Speed and a New Retail World.

Air Freight Rates: ‘A Small Imbalance of Supply and Demand Can Have a Large Impact’. Recent research from Clive Data Services has indicated that when aircraft utilization reaches 80%, rates increase. Once rates increase, the pricing power dynamic swings in favor of the seller (and vice versa). Understanding how load factors affect rates can help shippers determine whether or not they should consider a short or long-term contract. In other related news, Air Cargo Market Confident of Strong Demand and a Peak Season This Year and Strong Demand, Rising Costs Affect Packaging Strategies.

Volvo, Daimler and Traton Plan European Electric Charging Network. Europe’s three largest truckmakers have begun discussing plans to expand the fast-charging network in Europe. In total, over $590 million will be invested to expand the existing network to 1,700 chargers. To put this into perspective, haulage experts estimate Europe will need approximately 50,000 chargers by 2030. Currently, only 10 charging stations exist across the continent. In other infrastructure news, Amazon, UPS Say Hydrogen is Further Down the Road than Electric and Business Groups, Unions Join Together on Infrastructure Plan.

‘Just In Time’ Planning Has to Give Way to ‘Just In Case’. The consequences of an extremely efficient supply chain are the rigid parameters that they must operate on, wherein a normal environment are great. Although, not the most resilient when experiencing global bottlenecks and new disruptions. Transparency and understanding of where and the owning the rights to receive specific items such as medical supplies, food, and other precious resources remain a priority for many government entities. In other supply chain efficiency news, Amazon Has Spent Billions to Get Within a 1-hour Delivery Distance of Many US Customers and Mobile automation tasked to alleviate supply chain pressures.

SKU Rationalization Helps Bed Bath & Beyond Achieve 95% In-Stock Level. Retailers across the country have seen inventory levels decrease due to the number of issues slamming the retail supply chain. But that’s not the case with Bed Bath & Beyond. According to company executives, the reduction in inventory is a result of cutting SKUs and focusing on products that are in demand. Additionally, Bed Bath and Beyond is purposely reducing the number of store locations in efforts to optimize company performance. The retailer has also selected Oracle to serve as its ERP provider, which will enhance inventory management. In other retail supply chain news, Your New Couch is Ready, but It Could Take Weeks to Arrive and Retail Cargo Imports Continue to Surge; Supply Chain Disruptions Ongoing.

Careful Carrier Selection Provides Pathway for Shippers to Reduce Carbon Footprint. In recent years, the push for sustainability has been gaining traction as governments and corporations turn their gaze towards reducing the global supply chain’s carbon footprint. A recent DHL Supply Chain survey showed that about 60% of the company’s carriers have made sustainability a strategic priority while over 30% indicated that the topic has been gaining attention. One way shippers can clean up their carbon footprints is through target carrier selection. The EPA SmartWay program is a tool that allows carriers, shippers, and 3PLs a way to analyze where they stand in the search for sustainability, without neglecting the revenue. In other related news, Asset Owners Managing $6 Trln Call for Global Carbon Price and Carbon Offsets Help Cancel Out “Last-Mile” Pollution.

Big Tech Executives Find New Frontier in FreightTech. The supply chain industry is beginning to call upon Big Tech executives to lead the way as the industry fully embraces the move toward digitization. These leaders, including Mark Okerstrom, president and COO of Convoy and Mark Hoyt, the new CFO of Loadsmart, possess the experience that will allow the industry to smoothly integrate more technology in order to optimize global operations. They also have a proven track record of building creative teams that excel at solving problems, something our industry would definitely benefit from. In other related news, New Flexport and Convoy Logistics Partnership Set to Blaze a Hi-Tech Trail and Using a New Supplier Can Be Risky. Traceability Can Help.

Mobility 🚗

The Future of EV Batteries Could Be Found Under the Sea. The transition from internal combustion engines vehicles (ICE) to EVs is well underway and demand for electric mobility is steadily on the rise. The Metals Company has invented a solution that paves the way for EVs to sustainably scale: a sea vacuum. One of the largest polymetallic nodule deposits is located in the middle of the Pacific Ocean and now, with the help of this oceanic vehicle, materials can be removed without harming the ancient ecosystem. The Metals Company has planned for pilot production to begin in 2024. In other battery news, Stellantis Nearing Deal to Build Major EV Battery Plant in Italy and How GM's Ultium Battery Will Help It Commit to an Electric Future.

Low Vehicle Inventory Pushes Up Prices in US. The global semiconductor shortage has plagued vehicle production resulting in severe inventory shortages. In 2020, 3.5M fewer vehicles were produced than in 2019. This year the automotive industry is on track to produce 1.5M fewer than in 2020. In some cases, vehicles are purchased before hitting the lot, leaving dealerships with a thin selection to offer to customers. To top all of this off, the average transaction price of purchases for both new and used cars has risen while sales incentives have fallen. In other production news, Ford Limits Production at Multiple Factories Through July Due to Semiconductor Shortages. Renault CEO Warns Semiconductor Crunch will Ripple Through 2022, and China Car Sales Fall With Chips in Short Supply.

BMW Unveils its Crazy, Futuristic 75 mph Electric Scooter. This isn’t your typical moped. With a sleek design and a 42 hp electric motor, the BMW CE 04 allows urban commuters to travel up to 81 miles before recharging. The automaker designed the scooter with a helmet compartment for easy storage as well as a displayed navigation system and control center. With the announcement of the CE 04, BMW AG CEO Oliver Zipse also shared that all future BMW Motorrad models for urban commuting will be pure electric. In related news, Stellantis to Electrify 14 Vehicle Brands and Look Out Tesla Cybertruck, RAM Has a 500-Mile Pickup Truck Too.

ADAS Sensors Create a Cleaning Nightmare. Advanced-Driver Assistance System (ADAS), a part of the autonomous driving feature, is hitting a new roadblock as keeping the system's sensors clear of obstructions does not have a clear solution. Obstruction of these sensors can include rain, snow, mud, bugs or other debris. Some believe that having multiple sensors could provide no dependencies on one lone sensor. Others believe that the sensor needs to have a further subsystem designed to keep the sensors clear completely. While physical wipers and cleaning fluids seem to prevent an initial solution, questions of wiper obstruction being greater than the original cause of the issue. This leads to the general consensus that a type of liquid spray and jet dry are likely the best solution. In other AV development news, ADAS and Wheel Alignment and Tesla Model 3 Get Safety Recommendation Back After Ditching Radar.

Startup Halo Will Bring Driverless Car Service to Las Vegas Later this Year on T-Mobile 5G. Halo will test the new capabilities of modern 5G and LTE networks as they begin to perform hailing services for Sin City with their fleet of autonomous vehicles. Halo currently is testing with “safety drivers” but hopes to soon operate autonomously with the utilization of employed remote drivers as needed. While this is not Vegas’s only autonomous hailing service in testing, Lyft and Motional also testing new services. Halo’s difference is they utilize remote drivers as well as the implementation of an “advanced safe stop” which will completely stop the car if a hazard is detected. In other transportation service news, Taxi Cabs See Increased Ridership as Uber, Lyft Prices Surge and Didi Ride-Hailing Service Pulled From App Stores in China.

Opel Goes Fully Electric. The German carmaker Opel, owned by General Motors has announced that they will be manufacturing exclusively electric vehicles by 2028. Opel was able to generate roughly $19.5B in 2020, for comparison the global auto market is estimated to be $2.2T. This move by Opel aligns with their sister brand Vauxhall who announced they would be 100% electric by 2024. Opel also plans to enter the Chinese markets with the reintroduction of the zero-emission Opel Manta. Also, Germany's Biggest Automakers Fined €875M For Emissions Collusion.

Hertz Celebrates Chapter 11 Exit, Looks Forward - Rental Operations. With the completion of the Chapter 11 restructuring, Hertz has been able to reduce its corporate debt by roughly 80%. From an operational standpoint, Hertz has focused on the correct allocation of assets at each location in an effort to reduce operating costs. They have also refocused efforts on neighborhood rentals to be a complementary revenue stream to airport rentals. It has been roughly over a year since Hertz declared bankruptcy in May 2020.

Elon Musk Realizing How Difficult AVs Are to Build. Tesla is behind schedule from their leaders' promises delivered in 2018 related to updated versions of software that would allow full autonomy for Tesla vehicles. Musk’s emphasis on the issue's difficulty rather than any direct problem at hand suggests that fully autonomous updates might be further out than consumers have hoped. Questions if Tesla’s camera only system is a contributing factor as other AV brands such as Waymo use a combination of cameras, sensors and radar. In unrelated news, July Fourth Rental Prices Hit Above $400 Per Day.

Fundraises and M&A 💸

Locad Raises $4.9M Led by Sequoia Capital India Surge. Locad the Southeast Asia-based startup is seeking to provide an end to end solution for multinational eCommerce companies by providing a cloud-based software platform to provide live dashboards about customers’ products. Locad currently utilizes 7 warehouses across Southeast Asia that are operated by facility partners, and intends to increase operational capacity and build out more data analytic capabilities with the new funding.

Coast Raises $6M Led by Better Tomorrow Ventures. Coast’s seed round is aligning them to release a new credit card and finance platform. They seek to allow fleet managers to better understand and control driver spending. Initially, it will only support fuel transactions but will soon allow customization regarding time, work schedules, and restrict budgets.

Nowports Raises $16 Led by Mouro Capital. Nowports operates out of Monterrey Mexico, where they seek to expand logistics and financial services from Asia to the Americas. The capital they have newly acquired will allow them to continue digitizing these services and expand their teams in China.

Juni Raises $21.5M Led by Felix Capital, Cherry Ventures, DST Global. Juni, based in Gothenburg, Sweden is developing fintech for eCommerce entrepreneurs that seek to integrate channels and provide financing services. The influx of capital will be applied to further develop product features and recruiting.

MaxAB Raises $40M Led by RMBV. Cairo-based MaxAB connects food and grocery retailers to suppliers in order to allocate adequate inventory to some of the most underserved geographies in Egypt. This capital will be used to expand into roughly one new city across the Middle East and Northern Africa per month.

Alto Raises $45M Led by Tuesday Capital & Goff Capital. The ride-hailing startup has already been operating in Dallas, Houston, and Los Angeles with the use of their company-owned fleet and W-2 employees. Alto will use this capital to stride towards its goal of operating an exclusively EV fleet by 2023 and tripling its geographic footprint.

Licious Raises $192M Led by Temasek. Bangalore-based Licious, the six-year-old fresh meat and seafood eCommerce startup, has raised to date $285M at a $650M valuation. Licious is currently operating in 12 of India’s cities and will deploy new capital to expand geographically and strengthen its supply chain network.

Zipline Raises $250M Led by Baillie Gifford, Katalyst.Ventures & Temasek Holdings. Zipline raises this series E financing round as they provide medical delivery to anywhere via drones. Beyond this financing round, Zipline has also announced partnerships with Walmart and Toyota. The new capital will be used to scale up the drone fleet and delivery efforts in Rwanda and the United States.

Silk Logistics Raises $70M in IPO. This Melbourne-based company performs port-to-customer logistics across Australia. Through port logistics, warehousing, and distribution Silk Logistics is able to first provide a single layer of visibility and secondly capture comprehensive data to enable insights for their customer. The funds will provide development for analytical capabilities further upstream.

VW Shifts Ownership of Bugatti to Porsche and Rimac. Although financial details are not disclosed, Rimac, a design, and engineering company that has performed projects for major carmakers will own 55% of the regal auto brand. The remaining 45% of this joint venture will be owned by Porsche, an arm of Volkswagen. Bugatti has a history of financial loss and will allow Volkswagen to focus on higher priority projects such as shifting to electric vehicles and the auto giant's ongoing issues regarding emission scandals.

Knight-Swift Acquires AAA Cooper for $1.35B. Through this acquisition, Knight-Swift will be able to enter the LTL space through the Alabama-based AAA Cooper who will remain operating independently. Knight-Swift was able to perform this acquisition through a mix of debt, cash, and stock.

SPAC Radar 📡

Polestar in SPAC Merger Talks with Gores Guggenheim. Polestar electric vehicle maker who is in hopes to rival Tesla and Lucid Motors is in discussion with Gores Guggenheim Inc. Polestar, which is controlled by Volvo Car AB and Zhejiang Geely Holding Group CO., declined to comment, although it has been known that Polestar has been seeking public options since March. $25 billion is the rumored transaction value of the combined company, although nothing has been announced by either organization.

Sattellogic in $850M deal with CF Acquisition Corp. Satellogic operates 17 satellites in orbit currently providing data capture abilities for the earth's surface for a variety of industries in effort to track and understand environmental changes. Sattellogic will utilize the capital to expand the constellation to over 300 satellites and expand AI development. The SPAC Deal values the company at $850M, including a PIPE worth $100M.

Company Building 🛠️

Net Revenue Retention and Market Cap. Santosh can’t help himself as a public markets analyst when he comes across analyses relevant to both private and public valuations. Consider that Net Revenue Retention accounts for roughly half of the variation in valuations on an EV/Sales basis for SaaS companies.

Starting a Company In a Space You’re Not an Expert In. “When you’re looking to build a company, you start with a really wide aperture, and then as you walk down the path, you have to further narrow that aperture both against the idea and the ultimate business you want to build.”

On Managing Technical Teams as a First-Time Manager. We’d guide folks to minute 5:15 on the first 90 days, minute 13:05 on remote work, and minute 23:05 regarding an engineering manager’s desire to still write code.

Who's Hiring? 👩‍💻

Content Manager at Vizion in Atlanta, GA (remote ok).

QA Engineer at SVT Robotics in Norfolk, VA.

AE at Backbone AI in New York, NY (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.