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 💭

Trying something new out this week. If you have a recommendation for guests on our podcast, send them over! Our only ask is to focus on investors, relevant corporate leaders, and founders of startups at the Seed stage or beyond.

We Are Dynamo,

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

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Supply Chain 📦

Instacart and Walmart Lead the Pack In Grocery Delivery Sales. When stay-at-home mandates were put in place, D2C grocery delivery rose 62%. A wide variety of competitors have emerged over the past year but as we begin to enter into the post-pandemic era, Walmart Groceries and Instacart are ahead by a landslide, making up 93% of the monthly sales generated by the industry’s top 5 grocery deliverers. Instacart surpassed competitors in California while Walmart Groceries led the way in Texas. Interestingly enough, FreshDirect recorded the highest sales per customer but this is largely attributed to the higher prices in NY. In related Instacart news, Instacart to Build Warehouses in Partnership with Retailers and Instacart Taps Fabric’s Automation for Next-Gen Fulfillment Initiative.

US Rail Regulators Target Container Demurrage Billing. US regulators are stepping up their efforts to address detention and demurrage charges that railways and container lines are implementing on shippers. Considering the state of the nation’s supply chain industry, US Surface Transportation Board (STB) chairman Martin Oberman has questioned the use of demurrage billing since it doesn’t add constructive incentive and could ultimately exceed the value of the shipment. The STB sent all seven of the Class 1 railroads letters requesting explanations of their charging policies just 2 days after the Federal Maritime Commission informed the top nine container lines operating in US tradelanes that it would immediately begin auditing billing policies. Check out Surface Transportation Board: How Are Railroads Addressing Intermodal Congestion? and More 'Gentle Arm-Twisting' by Carriers, as Shipping Costs Continue to Spike for more on ocean shipping. 

Carriers Bracing for Rebound From Historically Low Inventory-to-Sales Ratios. Every few months, the Census Department releases inventory-to-sales ratios that essentially show the number of months of inventory on hand in relation to monthly sales. In April, the latest month reported, the ratio was 1.07. This trend of one-to-one ratios is a direct cause of all the labor and supply shortages disrupting supply chains everywhere. Inventory replenishment would be warmly welcomed by carriers, but Pitt Ohio President Chuck Hammel believes that, with all the strains that supply chains have experienced in the past year, nothing is set in stone. In other news, A Congested Freight Environment Shows No Signs of Improvement for Peak and Overburdened US Logistics Infrastructure Sets Off-Peak Season Alarms.

Supply Chain Executives See Long Road Ahead for Diversity Efforts. It has been roughly one year since the brutality of George Floyd, an event that while tragic has forced many to look internally and commit to a change for the better. Many whales in the logistics space such as UPS, Union Pacific, Norfolk Southern, C.H. Robinson have committed themselves to work to better proportions of equity in terms of gender and race in their workforce and at the executive level. Currently, in North America and Europe 30% of the supply chain workforce identify as BIPOC while in the executive levels only 9%. Supply chain organizations will have to navigate this needed change as imperative for success as they seek to provide inclusion and equal opportunities. 

Supply Chain 'Stretched' for Cardboard Boxes, Wood Pallets. High consumer demand deriving from eCommerce has tightened the supply of wooden pallets and shipping supplies such as cardboard boxes. To add some perspective, the United Fresh Produce Association reported that pallet costs increased by nearly 400% in May due to the increase in lumber costs. Some suppliers are so desperate that they’re scavenging the streets looking for spare pallets. Other shortages, Taco Bell is Facing a Food Shortage and Major Delays on Furniture Shipping Amid Foam Shortage.

Salesforce Projects Retailers Will Pay $223B Extra for Goods in the Second Half. Of that projection, 73% of the capital expenditure will be spent on logistics costs while the remaining 37% will be spent on suppliers and wage expenses. Consumers should expect higher prices this holiday due to the increase in the cost of goods sold that retailers are having to pay thanks to supply chain disruptions.  Salesforce also predicted that the retail industry will experience a labor shortage of 350,000 workers heading into November. For more on current labor issues, check out ChineseSuppliers to Apple, Nike Shun Xinjiang Workers as US Forced-Labor Ban Looms and Shortage of Railroad Workers Threatens Recovery.

Inside P&Gs Robot Ambitions. The adoption of automation has been driven heavily over the last year, firstly by the need to keep workers separated due to COVID-19. Next to shave costs as freight prices soared and now due to the lack of workforce. While humans still have a competitive advantage over many robots, P&G has doubled its automation over the last decade. The increase in vision, flexibility, and adaptability has been the largest contributor to this growth as the robots can move around new obstacles and become more dynamic rather than the previous fixed tracks. Related, Dynamo-portfolio company, Tangram Vision Launches Depth Sensor Comparison Tool. 

McKinsey: How to Master the Omnichannel Supply Chain. Shopping multiple brands on one digital platform will continue to grow in a post-pandemic world. Online marketplaces compete by providing the most offerings or services to their customers. Mckinsey has outlined 3 areas that guide success for omnichannel retailers with the first being to have a customer-centric omnichannel which supports customer needs across all channels. The second area is supply chain strategy, the elements include digitization and automation. This allows retailers to leverage information and their partners’ assets to maximize capabilities. The final area regards supply chain processes, advising to secure enough capacity to enable fluid product flow. Additionally, enabling information to flow from either direction of your supply chain to you allow for quick response. Speaking of retail supply chains, listen to Ikea’s CEO from Climate Week 2019.

Mobility 🚗

Tesla Self Driving Beta Lacks Safeguards. After several delays, Tesla’s Autopilot is being released in Beta. Initial reports however show that the release lacks safeguards and experts are concerned about the safety implications of this open road experiment. The Beta users are not made aware of the level of attention they still need to have behind the wheel, as the system is NOT fully autonomous. Also of concern is the potential negative backlash and public outcry accidents could have that would potentially slow down future developments in autonomous driving systems testing. Also, Tesla Hardware Package 3 Upgrade Pricing Has Been Announced.

Ford & Argo AI Launch Self Driving Vehicles on Lyft Network. In a big step for AVs, Ford and Argo will start piloting self-driving vehicles on the Lyft ride-hailing platform. The initial two rollout cities are Miami and Austin, Texas. This partnership brings the two companies closer together with Lyft receiving a 2.5% stake in Argo as part of this deal. Unrelated but noteworthy, America’s Most Dangerous Streets for Pedestrians. 

Tesla Plans to Open Up It’s Charging Network Later This Year. In a big step towards providing more charging infrastructure to all EVs, Tesla announced they will allow third-party vehicles to charge at their superchargers. What might at first seem to be a loss of a unique selling point of Teslas, the idea that Tesla could monetize charging competitors’ vehicles highlights the network effects possible in an early-to-market charging network. The news comes as Tesla Plans to Upgrade Chargers to 300kW. In other EV charging news, Rivian Partners with Tennessee Parks for Charging Stations, and Shell Charge Points Coming to Waitrose Stores Across the UK.

Despite Chip Shortage, Car Dealers Continue to Sell. With chip shortage causing problems on the production side, car dealers continue to sell at record rates. With this discrepancy in supply and demand, the chip shortage could lead to a steep drop-off in car sales and revenue for car manufacturers globally. Breaking down car sales, Low Car Supply Forces Wealthy to Buy Used Rolls Royces and Bentleys, and on the supply side where  BMW and Daimler are Forced to Halt Production Lines Due to Chip Shortages.

Comparing the Life-Cycle Greenhouse Gas Emissions of ICEs vs EVs. There is an ongoing discussion around how green electric vehicles really are, especially when taking into account the whole life cycle with production, driving, and disposal. The International Council on Clean Transportation has just released a white paper concluding that “even for cars registered today, battery electric vehicles (BEVs) have by far the lowest life-cycle [greenhouse gas] emissions” when compared with fossil fuel-powered vehicles across their entire lifetime. This highlights another key reason for making the switch to EVs. Also in decarbonization news, EUs Proposed Green Deal is a Big Victory for Fossil Fuel Companies while Sustainability Driving Change in Commercial Travel.

Mercedes Looking to Go All Electric by 2030. Mercedes announced that by 2030 it wants an all-electric lineup throughout its portfolio. Given the current line up this is looking to be quite the challenge, and Mercedes claims it will be “a gradual ramp-up, one that starts with the company offering a BEV in every segment by 2022.” In other OEM-EV news, VW Announced They More Than Doubled EV Deliveries in the First Half of 2021 while GMC Plans to Launch Electric Pickup.

Stellantis Seeks Supply Chain Control as Electrification Heats Up. The case for vertical integration and strategic investments comes in a bid to secure access to critical components for EVs such as battery and chip manufacturing capabilities and access to rare earth minerals, to name a few. This comes on the heels of a chip shortage and a run for access to lithium deposits, leaving many experts predicting that the next major shortage to impact automotive will be battery-related. As a reminder, it was just two weeks ago that Stellantis announced a $30B dollar investment in electrification and related software, investments in battery manufacturing, and strategic deals with lithium suppliers. ICYMI, Honda Ready to Accelerate EV Plans, if necessary.

Fundraises and M&A 💸

Brokrete Raises $3M Led by Xploration Capital. Brokrete has launched Storefront, an eCommerce platform for construction suppliers as they strive to digitize the construction industry. This has allowed once offline suppliers to easily start displaying and taking orders online. Brokrete shares that they currently have more than 250 suppliers and 1000 contractors on their network. 

Noye Technologies Raises $3.8M Led by Vsquared Ventures. Former BMW Group employees Aaron Spiegelburg and Marco Prüglmeier are approaching automated warehousing with the priorities of ultra density, flexibility, and adaptability to changing needs. By utilizing automated robotic picking Noye can eliminate aisle space and increase capacity. This seed round was also accompanied by 486 Capital and Abacon Capital. 

WeVee Raises $7M from Various Undisclosed Investors. Based in the UK, WeVee leases out electric vehicles of 30 different brands to consumers. Additionally, WeVee has shared that they also plan to provide other electric offerings including commercial vehicles, motorcycles, and scooters.  With the newly raised capital, WeVee will expand its European footprint, targeting entry into Germany over this year followed by France, Italy, and Spain in 2022. 

EDRAY Raises $7M Led by Andrew Leto. Seeking to refashion the execution of port logistics through a balanced approach of weighing the number of incoming ships, capacity matching, and visibility. With this EDRAY can complete stowing their cargo in buckets of destination to increase efficiency to decrease detention and demurrage chargebacks. Additionally, EDRAY’s platform will be a marketplace for shippers to bid on drayage providers. The capital will be utilized to further develop the platform’s suite. 

Collectiv Food Raises $16M Led by VNV Global. Since being launched in 2019 and operating in the U.K. and France Collectiv Food allows restaurant managers and chefs to bypass distributors and source directly from producers. This is enabled through their platform and thousands of vetted producers. Founder Jeremy Hibbert-Garibaldi said that Collectiv Food’s sight is set to become the European leader in food distribution than a global leader.

Fabric8Labs Raises $19.3M Led by Intel Capital & Lam Capital. 3D printing metal components is becoming more accurate and adopted. Although, what separates Frabric8Labs from competitorsis their ability to redesign the process to decrease costs and energy needed through the use of a water-based liquid containing metal salts rather than powder. This allows printing to occur at room temperature, translating to a lower cost per part. Fabric8Labs plans to deploy the capital in order to double the size of the staff before the end of the year.

imove Raises $22.3M Led by AutoScout42. imove looks to reduce the costs of use for vehicles by taking on the car subscription model. Car subscriptions differ from a  lease by being short-term but additionally including insurance, roadside assistance, and maintenance into the monthly fee. AutoScout42 who is a European online car market will handle the distribution channel for imove’s subscription service. 

Cobli Raises $33.5M Led by SoftBank. Based in Sao Paulo Brazil, Cobli is a logistics startup that helps prevent damages and create better routes for fleets by attaching a device to vehicles. Cobli currently serves 3,000 organizations and will expand revenue channels by adding insurance products. The capital will be utilized to add roughly 300 staff members to its team by the end of 2022. 

Sonatus Raises $35M Led by VC Translink Capital. This automotive software company has attracted industry companies to support fundraising efforts including Hyundai Motor Group and LG electronics. Sonatus’s product can be broken into two parts. The first being an in-vehicle device and then the second being cloud computing. Their first generation of this product is already being implemented at a top global automaker that will be announced in coming weeks according to Sonatus. 

Fetch Package Raises $60M Led by Ocelot Capital. Based in Austin Texas, Fetch Package helps property managers distribute packages to their tenants. This significant time burden on the management teams as they receive roughly 350 packages a day. Fetch projects that it will process 8M packages this year in comparison to 3.5M last year. This financing is $50M in equity and $10M in venture debt and will be used to expand across the US in cities such as San Francisco, Nashville, and South Florida. 

Loop Returns Raises $65M Led by CRV. Building off of Shopify’s platform, Loop Returns allows eCommerce businesses an alternative to returns. According to Shopify, returns account for 20-30% of eComm sales, at which point Loop Returns intervene and offer alternative offers such as exchanges and store credit. Loop Returns also handles shipping labels and processes the returns.

Choco Raises $100M Led by Left Lane Capital. Based in Berlin, Choco operates a procurement platform for restaurants and restaurant suppliers. The Choco platform allows chefs to communicate with their suppliers in a single location, as well as place and edit current orders. Communication from the restaurants will be converted into whatever form that the suppliers use including email and even ERP. Half of this funding will go towards developing new technologies and the remainder will go towards mass hires as Choco expands its footprint. 

Interos Raises $100M Led by NightDragon. Based in Arlington Virginia, this supply chain risk management startup utilizes artificial intelligence and machine learning to map their global supply chain. This enables Interos’s customers to monitor suppliers, flag disruptions instantly, and model ripple effects to guide responses.  The capital will be deployed to expand operations and reach. 

Path Robotics Raises $100M Led by Tiger Global. Based in Columbus, Ohio, Path robotics has been developing highly capable and flexible welding robots. Advances in AI software with improved vision allow the robots to improve on different welding projects making them more adaptable to unique projects. This adaptability has the potential to be adopted in more than just welding scenarios according to Griffin Shroeder of Tiger Global.

Jokr Raises $170M Led by GGV Capital, Balderton Capital, and Tiger Capital. Currently performing their 15-minute grocery delivery operation in 9 cities in both Europe and the Americas. Jokr focuses on offering local products and more sustainable delivery methods by utilizing bikes and scooters for their delivery teams. The capital will be used to expand into new markets and expand its product offerings. 

Rappi Raises $500M Led by T. Rowe Price. Based in Bogota Colombia, Rappi provides on-demand delivery for anything including meals, consumer goods, and medicine. Despite starting by moving beverages, Rappi also allows customers to withdraw cash from the card that they use to purchase the goods, creating on-demand ATMs. Rappi currently operates in more than 250 Latin American cities.

Gopuff looking to raise $1B. Providing grocery delivery services “instantly,” Gopuff like many on-demand delivery service startups is trying to scale as fast as possible and establish themselves to consumers. This would be the third round in 10 months for Gopuff with an estimated $2.5B raised across those three rounds.  

Swiggy Raises $1.25B led by Softbank. Starting in 2014, Swiggy competes in the on-demand restaurant delivery in India, scaling from 20 orders per day to 50,000 during the first year. Swiggy currently works with 150,000 restaurants and retailers across 500 cities, enabled by their delivery partners made up of a 165,000 fleet. Swiggy will apply the massive capital to retain and grow its market share.   

ChargePoint to acquire has.to.be for €250M. With offices in Austria and Germany, has.to.be’s software manages more than 40,000 charging points for electric vehicles across Europe. For North America’s ChargePoint this will be their first acquisition since going public earlier this year and will provide significant growth in expanding into new markets.

Uber Freight Acquires Transplace for $2.25B. Previously owned by TPG Capital, Uber Freight will utilize Transplace to expand its market share and boost its balance sheet as the company strives to break even by the end of 2022. It’s interesting to note that Transplace brings one of the most prolific managed transportation platforms to the Uber Freight marketplace that focuses on building deep carrier capacity. The unification of these two organizations will, as described by Lior Ron of Uber Freight, “create the industry-first shipper-to-carrier platform.”

Magna Acquires Veoneer for $3.8B. MagnaVeoneer develops thermal and radar driver-monitoring systems that enable autonomous driving and restraint controls. Magna and Veoneer hope to gain traction with their complementary product offerings in the highly competitive space.

SPAC Radar 📡

Aurora Ready to Go Public Via SPAC. Despite not having a fluid business model and no plans of becoming profitable until 2027 Aurora is ready to merge with Reinvent Technology Partners. With founder backgrounds from Google,  Tesla, and Uber; Aurora’s team is developing both hardware and software to enable autonomous driving for both cars and semi-trucks. Exact details around this financing round are vague currently, although it is believed that this will provide Aurora with $2B or more.

Lucid Motor SPAC Approved. Electric vehicle maker Lucid motors looking to merge with Churchill Capital IV was delayed after they did not meet the vote requirement by shareholders to proceed. This delay only lasted a day and will give Lucid $4.4B in proceeds to move them along as they look to first customer deliveries later this year and over 10,000 vehicle reservations. 

Company Building 🛠️

The Bad Marriage Problem. “We know that bad marriages are hurtful to everyone, not just the spouses. Companies that have dysfunctional founder/investor relationships suffer from them. And the shotgun marriage environment we are operating in right now (and for the foreseeable future) will likely create more of them. So we should be thinking about solutions to end these bad marriages and let everyone move on to better ones.”

The SaaS Org Chart. David Sacks gives founders an idea of how their organization must grow and scale from Series A to C. Worthwhile to point out the reporting structure shift a CEO must navigate from A to B - one that involves getting the right VPs in place who are also able to hire quickly. For example, in Sacks’ example, the sales function adds a CRO at Series B and takes the sales org from 12-strong to 45-large.

Option Pool Data from Capdesk. It’s worth noting that this study appears to be including both allocated and unallocated options to the total figures. 

Who's Hiring? 👩‍💻

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

UX Designer at SVT Robotics in Norfolk, VA.

Dev Ops Engineer 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.