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 💭

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Supply Chain 📦

Delta Variant Stalls Asia’s Economic Recovery After Early Rebound. Here’s an interesting fact: the US has a vaccination rate just shy of 50% which has been extremely helpful as the US economy recovers. On the other hand, the vaccination rate is below 10% in some Asian countries such as the Philippines, Thailand, and Indonesia. As the Delta variant continues running rampant, the consequences are starting to become realized by countries with low vaccination rates. Non-essential factories and operations are shutting down across these regions and will only cause more supply chain turmoil in the future. Extending stay-at-home mandates and speeding up vaccination rollouts are two of the options being considered by countries across the globe in order to subdue the effects of the virus. In related news, Expansion in China’s Factory Sector Hits Lowest Level in Months and China Typhoons Create Latest Supply-Chain Threat as Ports Shut.

eMarketer: eCommerce Sales to Make Up 18.9% of Total Holiday Retail Sales. It’s no secret that COVID triggered a surge in eCommerce sales. With a growing number of retail stores going dark on Thanksgiving, consumers will likely rush online to take advantage of the special promotions taking place before, during, and after Black Friday. According to the report by eMarketer, eCommerce sales will equate to roughly 19% of total holiday sales, up from 17.5% in 2020. The report also noted that the volume of online shopping could set off an earlier holiday season. In related news, Cargo Delays, Supply Shortages, and Increased Prices Likely to Continue Through Q4 and Are You Ready For Q4 Fulfillment?.

Driverless Semi Reaches Milestone in Test, Startup Plus Says. Plus tested out its Level 4 autonomous semi in late June on the newly-built Wufengshan highway. No human drivers or remote controls were used during the trial. Plus is one of a few startups competing to take control of the autonomous longhaul market and this demo will surely boost confidence in autonomous technology . The California-based startup plans on using the same technology with its new product called PlusDrive which will begin testing in 2022. In other startup news, Dynamo-portfolio company STORD Rethinks the Warehouse With Atlanta Innovation Hub and Volansi Completes First-Ever Autonomous Ship-To-Ship Drone Delivery.

Amazon to Cut Waste From Returned, Unused Goods by Giving Them A Second Life. The two programs, FBA Liquidations and FBA Grade and Sell, were created to make it easier for third-party sellers to resell customer-returned products or overstock inventory. FBA Liquidations gives sellers the opportunity to use Amazon’s wholesale liquidation partners to regain potential losses on returned products. FBA Grade and Sell allows sellers to list products as “used” instead of sending items back to them (price varies on condition of item). These two programs are a part of Amazon’s sustainability efforts to reach net zero carbon by 2040. Also, 5 Charts Show Amazon's Growing Logistics Network as It Puts Inventory Closer to Consumers.

Molex: The State of Industry 4.0. Deemed the fourth industrial revolution, Industry 4.o is the name given to the current trend of automation and digitization spreading across supply chains, specifically the manufacturing sector. In this report, Molex, a global electronics leader specializing in automotive and industrial automation, surveyed 216 industry participants in order to understand the challenges laying in the way of success. Here’s a sneak peek: 96% of respondents reported that their customers will face cultural challenges to implement Industry 4.0, with leadership playing a large role in protesting change.

Kellogg Says Pandemic-Era Supply Chain Upheaval Is Persisting. According to Kellogg’s CEO Steve Cahillane, disruptions caused by the pandemic are still being felt by global supply chains. Supply shortages have pushed household name brands, such as Eggo and Frosted Flakes, on the brink of production shutdowns as orders continue to flow in. This is obviously great news from a business perspective, since quarterly sales outpaced investor expectations, but is frustrating for supply chain executives across Kellogg’s wide range of companies. In related CPG news, ‘The Global Supply Chain Was Not Built For This’: Freight Delays Hammer US.

eCargo Bikers Pedal in With A Last-Mile (R)evolution From Diesel. The Promise of Low-Carbon Freight, a report written by Pedal Me, found that cargo bikes reduce carbon emissions by 90% compared to diesel vans, which isn’t that surprising. However, the report also found that it increased urban delivery times by 60%. The primary reason for the increase in last-mile delivery can be attributed to avoiding traffic congestion. The study found that bikes dropped off 10 packages per hour compared to 6 parcels per hour by vans. In other news, DHL Orders First All-Electric Cargo Planes From Eviation and Postal Service Reports $3 Billion Year-On-Year Loss.

Drewry: New Container Supply Should Stem Price Gains After Record High. Container prices sit right above $6,500 and have officially hit the highest price in the 23 years of recorded data. The 100% gain in container prices compared to last year is attributed to higher raw materials costs coupled with shipper’s frantic sourcing of containers to hold the increased amount of freight. Drewry, a leader in maritime research and advisory, found that this rise in prices will lead to an increase in container production that should ease further price fluctuation. Manufacturers located across the Pacific have tripled container output the first half of 2021 compared to the same period in 2020. For more maritime news, consider reading Container Ship Long-Term Charter Rates Climb to Record Highs Amid Vessel Shortages and US Company Sues ‘Collusive’ Ocean Carriers, Alleging Price Manipulation.

Mobility 🚗

It's Unsexy, but Effective, Micro-Mobility Companies Partnering With Cities. The chaotic days of micro mobility are over. Instead of just dropping scooters and e-bikes in a city, to succeed, providers need to partner with local governments to integrate into their overall mobility strategy. With a wild west start in the micro-mobility field just a few years ago, the industry is consolidating with certain players filing for bankruptcy like Skip and other players like Bird clinching a SPAC. It’s no longer enough to have a simple service or solution; it needs to be tailored and integrated in all aspects in the area of deployment. Related, Felyx Expands Micro-Mobility in 3 German Cities, and Research and Markets Latest Report on the Worldwide Micro-Mobility Charging Infrastructure Industry Sees Increasing Investments in Micro-Mobility Mode of Transportation as Driving Growth.

LG Wants Its Suppliers Next to Their New US Battery Plants. With LGs plans of opening 2 new battery plants in the US by 2025, LG is looking to encourage its suppliers to set up shop near its new plants. The message from LG is clear, they want to have a better and more stable supply chain in their battery manufacturing, in order to avoid future shortages. Bringing suppliers physically closer to the plant should help them mitigate future supply side issues. In related news, CATL's New Sodium Ion Battery Poised To Help Ease Lithium Shortages.

Shimano Announces Sales up 73 % and Income Up 152 %. Shimano’s announcement comes as an early indicator to micro-mobility growth as one of the largest suppliers of bicycle parts. The global bicycle parts shortage is only briefly mentioned in the financial results announcement, and it looks like Shimano is gearing up for sustained demand with over $300M in factory upgrades to be invested in Japan, as well as a new factory in Singapore. In other news, Ford is Moving Toward a Build-to-Order Model, Away from Packed Dealer Lots to Help Increase Profitability, and BMW and Stellantis Report Big Jumps in Profit as Car Sales Snap Back.

Biden Sets National Goal of 50% Zero-Emissions Vehicle Sales by 2030. The ambitious goal and announcement is coupled with various additional options for how the government can help achieve this milestone. Expect fuel economy requirements and standards to be adapted, as well as larger scale government investments in charging infrastructure and the like to make reaching the 50% goal possible. In related news, Ford is Slated to Spend More on EVs Than on Internal Combustion Engine Vehicles in 2023, and Toyota’s Bet Against Electric Cars is Now Stacking the Deck Against Them.

With the Rise in Electric Vehicles the Number of EV Breakdowns is Increasing as Well and With That New Challenges are Emerging. Many EVs are not able to be towed, charging takes a long time, and the increased complexity of the computer systems is changing the way roadside assistance can help. With new technology come new problems, where in the past a simple Jerrycan could fill up an out of fuel vehicle, the same is not true for EVs. This change is providing new challenges and opportunities for roadside assistance services. Increasingly they are looking at ways to provide emergency charging or ways in which to more efficiently tow electric vehicles. Today’s EVs are more akin to super computers on wheels, where a simple wrench will most likely not fix the problem and require a more complex repair. Ultimately, in the eyes of a roadside service provider, this means more cases will require a tow. In related news, GMs Chevy Bolt Recall is Looking to be One of the Most Expensive Recalls Ever.

The 2020 World Oil Outlook from OPEC in 2015 Predicted 4.7 Million EVs on the road by 2040. The expected number for 2040 was reached in 2020, 20 years ahead of OPECs estimate. The transition to EVs is happening faster than expected and is catching players that are heavily dependent on the ICE business by surprise and making them rethink their long term strategy. In their latest report the 2020 World Oil Outlook expects 430 million EVs by 2045, that’s a 100 fold increase to an estimate just 6 years earlier. Much like smartphones and other consumer technology, the EV revolution is coming, and it is coming a lot faster than many might have expected. In other EV news, China's Electric Vehicle Makers Report Strong July Sales and Overall EV Sales Continue to Grow 4x Faster Than the Overall Vehicle Growth Sales Rate.

Uber and Lyft Face Challenges as They Steer Back Toward Profitability. Ongoing driver shortages and the spreading Delta variant are clouding the outlook of both Lyft and Uber. This comes on the heels of a promise to be back to profitable operations this year, something that is looking increasingly unlikely. Uber and Lyft are struggling to get enough drivers, despite paying incentives to get drivers on the road. This raises the question whether the root of the problem lies in the risks associated with contracting COVID-19 or whether the lack of drivers is a sign of a larger systemic problem - namely the low earnings of drivers. In AV news, Self-Driving Startup Argo AI Locks Down Key Permit Needed for Robotaxis in California.

Fundraises and M&A 💸

Loship Raises $12M Led by BAce Capital and Sun Hung Kai & Co Limited. With over 70,000 drivers and 200,000 merchants, this 1-hour delivery startup provides a plethora of products and services. Loship currently will deliver about anything that can fit on a motor scooter for consumers, but additionally performs B2B logistics. The funding will be used to expand into five new cities across south Asia with Laos and Cambodia being target markets for Loship.

Fashinza Raises $20M Led by Accel Partners, Elevation Capital and Sonam Kapoor. Fashinza’s online B2B manufacturing marketplace will provide connections to small to medium-sized factories that have ethical practices. Their platform will additionally provide end-to-end visibility of production with over 400 partner factories. Fashinza will utilize the capital to invest in supply chain technology and expand the number of manufacturers available.

Finite State Raises $30M Led by Energize Ventures. The Columbus, Ohio-based startup is striving to provide security to technology infrastructure and connected devices throughout the supply chain. Finite State has shared how some software that is utilized by these devices often uses open-source or third-party developed software that has the potential for security flaws to already be embedded. The newly acquired capital will be deployed to increase the headcount by 60% by the end of the year in order to meet demand in the market.

Elroy Air Raises $40M Led by Lockheed Martin Ventures. Based out of the bay area, Elroy is developing a cargo drone that carries between 300-500 pounds of cargo, with a range of up to 300 miles. The team has designed the drone to be a dual purpose fulfilling both commercial and defense uses. Elroy will start validation for both the airforce and the navy next year, with the hope of doing operations abroad while regulatory work with the FAA is ongoing.

Merqueo Raises $50M led by IDC Ventures, Digital Bridge, and IDM Invest. Based in Columbia, Merqueo operates on-demand delivery services throughout 25 Latin American cities. Currently, their offering has over 8,000 products varying from home goods to fresh produce that can be delivered within 10 minutes or 4 hours. As well, Merqueo offers scheduled delivery that can be set for recurring for consistently ordered items. The capital will be used to expand into new cities starting with Sao Paulo this year and Rio de Janeiro thereafter.

Hermeus Raises $60M Led by U.S. Airforce. Based in Atlanta Georgia, this aerospace startup is developing a hypersonic jet that can reduce a 7-hour flight from New York to Paris to just 90 minutes. The funding comes along with a government contract that is good for three years in which Hermeus will be responsible for producing 3 prototypes and provide the airforce with data produced from the innovative technology. Initial flights will be unmanned to reduce risk and expedite testing.

Suma Brands Raises $150M Led by Pace Capital, Material & i80 Group. Suma Brands plans on bridging the gap between small merchants and Amazon’s titan-sized marketplace. Beyond Amazon’s own products more than 5M third-party sellers are on the platform competing to sell their products. As these smaller merchants grow the need for more advanced technology to manage supply chains, raise brand awareness and source more efficiently the scope grows beyond their capabilities. Suma brands will come in to acquire and support these brands in order to become exceptional operators.

John Deere Acquires Bear Flag Robotics for $250M. After launching only 4 short years ago this bay area-based startup sought to solve the labor pain point in the agricultural industry through automating the equipment used to harvest and maintain fields. This acquisition will benefit both parties greatly by giving more resources to Bear Flag Robotics and for John Deere, it will contribute to their goals of integrating cutting-edge technology.

Inceptio Technology Raises $270M Led by JD Logistics, Meituan, and PAG. With $490M raised to date, Inceptio, an autonomous semi Truck that has reached level 3 autonomy. Level 3 autonomy demonstrates that the vehicle is capable of detecting the environment and can make some of the decisions, although the driver’s presence is still required. Inceptio has shared that they expect that they will begin production near the end of 2021.

Bridgestone Acquires Azuga for $391M. Founded in 2013, Azuga provides a connected fleet platform for operators which provides vehicle diagnostics and records miles, stops, fuel consumption, and vehicle patterns. This move by Bridgestone will help them achieve their goal of growing their logistics technology and services to 25% of their revenue, while fleet management is expected to grow by more than $10B in the next 3 to 5 years. This transaction will be conducted through a mix of cash and stock as Bridgestone plans to invest $6.5B for growth and strategy by 2023.

Maersk to Acquire eCommerce Logistics Companies in Europe and the US for Nearly $1B. Maersk acquired Visible SCM, located in Salt Lake City, UT for $838M and B2C Europe, based out of the Netherlands, for $86M. Maersk believes the acquisition will help it enter the fast-growth eComm fulfillment in an asset-lite manner. It shouldn’t be of any surprise to see Maersk dish out big bucks on M&A as it seeks to become an end-to-end integrator.

Qualcomm and Magna Competing for Veoneer Acquisition. Magna had previously placed a $3.8B bid on auto-tech company Veoneer last month. Meanwhile, Qualcomm decided to up the ante with a $4.6B offer that would provide the chip maker leverage in the driver-assistance technology. Qualcomm and Veoneer have already been collaborating in the development of driver and autonomous driving systems that was announced in the previous year. From here Veoneer will await to see if Magna raises or folds.

SK Innovation Intends to Split off Battery Business. The South Korea-based conglomerate intends to separate their battery business deeming it, SK Battery, in reaction to the growing demand for electric vehicles. As governments give the thumbs up to consumers to purchase electric vehicles, battery sales have doubled through 2021 thus far. Currently, SK Innovation’s batteries operate at 40 GWh and have set goals to raise their batteries capacity to 200 GWh by 2025 and to 500 GWh by 2030. Additionally, SK Innovation has been considering separating its oil exploration and production business into separate entities.

SPAC Radar 📡

Swvl to Enter $1.5B SPAC with Queens Gambit Growth Corp. Based out of both Dubai and Cairo, this ride-sharing platform allows users to hail buses for intra-state travel and cars for inter-city. Swvl currently operates in 10 cities across Africa and the Middle East and the completion of the merger would make Swvl the largest mobility company in Africa.

Company Building 🛠️

What is ARR?. A discussion around the varying uses of ARR - is it recurring, is it annual run rate? The TL;DR - clarify before delving into a conversation.

Tiger Global vs. SoftBank: Inside the Investing Playbooks That Upended Silicon Valley. A discussion of how Tiger and SoftBank are changing the game of VC but using two very different playbooks - one being passive and the other very aggressive. “In a survey of startups Polyakov referenced, founders ranked relationship, deal terms and speed as the three most important factors for making a deal. Operational support ranked second to last.”

The Product Analyst on a Product Team. A tweet storm highlighting the importance of the product analyst in developing hypotheses, defining metrics, and tracking results.

Who's Hiring? 👩‍💻

Program Manager at STORD in Atlanta, GA (remote ok).

Senior People Ops Manager at Nextmv in Philadelphia, PA (remote ok).

Customer Success Manager 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.