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 💭

Catch up on the Future of Supply Chain podcast as we get ready to release new episodes later this month!

We Are Dynamo,

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

Note:

please add “[email protected]” to your email client, so you don’t miss future issues due to aggressive spam filters.

Supply Chain 📦

Los Angeles’ Empties Exports Soar Amid Rising Trade Disparities. Empty containers became the hottest commodity exported from Los Angeles in July, increasing to 20.4%. The imbalance between exports and imports continues to spread as imports have grown nearly 3% YoY while exports are down 27.6% YoY. The number of vessels received in July was lower in comparison to July 2020. Gene Serok, Executive Director of the Port of Los Angeles, attributes this to bigger ships and better utilization. The port is currently averaging about 11,000 TEU per vessel call. In other maritime news, Import Volumes Surge, Creating Intermodal Congestion and Clock Ticking For Christmas Imports As West Coast Congestion Mounts.

For Robot Trucks, Navigating Highways Is Just One Bump in the Road. The race for long-haul Level 4 autonomy is heating up as popular startups like PlusAI and TuSimple accelerate their speed to market within the next three years. Autonomous technology has the potential to lower transportation costs by 15% to 25%, increasing valuations by more than 400%. If you’re interested in reading more on autonomous trucking, consider Ryder and Waymo Agree To Build Maintenance Network For Self-Driving Trucks.

Amazon Plans to Open Large Retail Locations Akin to Department Stores. It’s rumored that the facilities will be somewhere around 30,000 square feet, which is 70,000 less square feet than most department stores, and will feature top-selling consumer brands and private-labeled goods. Amazon’s executives feel that these large department stores will increase both consumer engagement and trust. This strategic play also gives the retailer access to important consumer spending data and opens the door for network expansion. In other retail news, Retail Freight Proves a Doorbuster For Trucking and Toys Could Be In Short Supply This Christmas, So Get Buying Now, Industry Warns.

Hitachi Targets Market For Verifying Carbon Neutral Factories. The Japanese industrial conglomerate plans to invest, develop, and implement a system which measures and optimizes energy use in three of its factories this year before making it available to other manufacturers starting in 2022. Alistair Dormer, Hitachi’s EVP and Chief Environmental Officer, predicts that authentication, similar to financial audits, will be required in the future as the importance of ESG continues gaining traction. By 2050, Hitachi plans to reduce emissions by 80% which includes  indirect emissions from suppliers and customers. In other news, Petronas Delivers First Carbon Neutral LNG Cargo Shipment to Japan's Shikoku Electric.

Power-Only Trucking Service Avoids Empty Trailer Moves, Convoy Says. The Convoy Go platform uses machine learning tools to single out backhauls and loadouts. This approach, deemed a “sharing economy”, allows shippers to save on shipping costs, avoid empty miles, and reduce carbon emissions. The platform also allows trailers to be preloaded before a truck arrives which evades loading delays. According to Convoy, “40% of all private fleet miles are driven empty, wasting fuel and money while needlessly  increasing CO2 emissions.” There are currently a few other trailer pools available on the market, including tools from JB Hunt, vHub, and Uber Freight. Also in new products and technology, Impact of Automation & Artificial Intelligence on the Workforce.

Freight Volume To Stay High As Fleets Face Unprecedented Supply Chain, Labor Challenges. There’s a wide net of disruptions hitting the trucking sector in part to supply shortages, port congestion and problems with rail service. However, job growth, strong consumer finances, and stimulus spending is keeping both volume and rates high. FTR Intelligence CEO Eric Starks also pointed out that there isn’t enough active truck utilization. New truck capacity is experiencing delays because OEMs are refusing to take orders due to high materials costs. For more on trucking, consider reading Strong Carrier Relationships Overcome Transportation Challenges and The Search for Drivers and the Fight to Keep Them.

Revenues From Robotics In Warehouses to Exceed $51B By 2030. Labor shortages and an increase in eCommerce orders have accelerated automation in warehousing. Mobile robots are currently the most popular productivity-enhancing solution in the warehouse space. ABI Research predicts that by 2030, commercial robot revenue in warehouses will have compounded annual growth by 23%. A few companies, including Penske, Amazon, and JD.com, have seen enhanced performance metrics ever since the addition of mobile robots in their warehouses. The sun is setting on the days of early exploration as warehouse robotics move into a more mature market. In other warehousing news, How Crocs Tackled a Surge in Demand by Popping up a Warehouse in Time for Peak and The Extra 900 Millimetres Transforming Warehouse Design and Efficiencies.

Mobility 🚗

Tesla Is Being Formally Investigated After Numerous Autopilot Crashes Into Emergency Vehicles. The formal investigation by the National Highway Traffic Safety Administration is of high importance, as the outcome of this investigation could have a big impact on how the future, at least in the short term, will look like in autonomous driving. The implications here reach far beyond Tesla, with the lawsuit potentially setting a new legal precedent for self-driving technology, hampering developments and rollouts of AVs on public roads. In related news, Tesla GigaFactory Berlin Critic Drops Lawsuit Bringing Tesla One Step Closer to Producing in Europe and GM and Ford’s Legal Battle Over BlueCruise Trademark to Cost Millions.

There is a Boom for Automotive Microcontrollers Despite the Widespread Shortages. The automotive microcontroller market is set to grow by a staggering 23% this year even more so when one considers the ongoing semiconductor shortage. Every year, technology implementation in vehicles grows due to high consumer demand for connectivity. Taiwan Semiconductor Manufacturing company said that it is increasing Q3 of 2021 wafer fab capacity by 60% compared to Q3 of 2020. In related news, Semiconductors in Cars with EVs Averaging around $834, Versus the $434 for ICE Vehicles. 

Waymo Is 99% of the Way to Self-Driving Cars and it’s the Last 1% That are the Hardest. There’s a lot of exciting talk surrounding AVs but there still is a lot of work to be done. According to ex-Waymo employees, the technology still struggles with 1% of edge cases involving bicycles and construction. In simple terms, this raises the question of how much effort is required, and ultimately how long it will take for AVs to reach a 99.999% rate of situation handling. There is a common saying that the last 20% takes 80% of the effort. In the case of AVs, it might as well be the last 1% take 80% of the effort. In related news, Car Makers are Betting on ADAS as the Path to AVs Takes Longer,.

Top 4 Highlights of Elon Musk’s Tesla AI Day. Musk envisions Tesla as an AI company, not just an EV maker. Without spoiling too much, Tesla unveiled a computer chip that is used in the automaker’s supercomputer, Dojo, set to be operational next year. Musk also backed the company’s vision-only approach to autonomy. Lastly, and to the surprise of many people, Tesla revealed a humanoid robot. To get the inside scoop on all the latest innovations Tesla’s working on, we recommend checking out the full Tesla AI Day video. Related, J.D. Power Public Charging Study Ranks Tesla #1 Among Operators.

Never Mind Going Electric, Where Will We Park? Most topics discussed around mobility are in regards to EVs and the future of AVs. However, as car sales continue to be on the rise, questions around parking capacity in the medium term are unavoidable, especially in densely populated areas in Europe. In the UK alone, the number of cars on the road increased by 28% since 2001 compared to a population growth of only 13%. There’s a long term need for an innovative solution that addresses the problem of tight parking capacity. In other parking news, A New State Regulation In California Would Abolish Local Parking Requirements for New Residential and Commercial Developments Near Bus or Train Stops and New York is Working on Curbing Engine Idling in Parked Cars.

Fires, Probes, and Recalls: The Shift to EVs is Costing Automakers Billions. As EV adoption picks up speed, car manufacturers are encountering increased costs due to recalls. Three recalls this past year by General Motors, Hyundai, and Ford have totaled an estimated $2.2B. VW recently announced They Don't Expect to See EV Margins at the Same Level as ICE Margins Until the Mid 2020s . These additional write offs for recalls and lawsuits are sure to depress current margins even further - resulting in high investment capital demand for EV manufacturers.

Toyota to Cut Output as Chip Shortage Finally Catches Up to It. The automaker is cutting production in Japan by 40% in September. The Delta variant is disrupting chip manufacturing in Southeast Asia, worsening the materials shortage currently crippling the automotive industry. It’s estimated that Toyota could lose anywhere from 60,000 to 90,000 vehicles to lost production. This week, Ford and General Motors also announced they have incorporated more downtime in North America factories in wake of the shortage. In other chip news, First VW ID.4 Electric SUV Pre-Production Units Roll Off the Line At Chattanooga Factory.

Fundraises and M&A 💸

Alerzo Raises $10.5M Led by Nosara Capital. Nigeria-based, Alerzo is digitizing procurement and delivery for small to medium-sized retailers. Without Alerzo, small retail owners would have to close down their store, travel to a central market, procure goods and logistics to move the inventory back to their store. Alerzo also offers warehousing and logistics services for suppliers which provide better access to global goods for retailers. The newly raised capital will be used to expand into northern Nigeria and set up an office in Lagos to increase its digital effort. 

TXOne Raises $12.9M Led by JAFCO Asia Investment. Based out of Taipei, this startup is bringing security to industrial control systems and their IoT devices. The capital will be used to expand its business geographically, but also increase the support of marketing and post-sale service teams. In the larger picture, TXOne will focus efforts to simplify current and future cybersecurity issues as digital transformation occurs. 

DigiSure Raises $13.1M Led by Morado Ventures. The digital insurance startup is providing auto lending services a more advanced way to assess their customers risk and more adequately priced. The startup uses external data sources, telematics, transaction history while still being able to price a customer in approximately 7 seconds. The funding will go towards hiring across several departments and scale into new verticals.  

Nogin Raises $15M Horizon Technology Finance Corporation. The Tustin, CA-based startup is providing commerce as a service to lifestyle brands such as consumer packaged goods, beauty, health, fashion, and wellness. Their services range from sales and marketing optimization, warehousing, fulfillment, and fraud detection. Currently the Nogin team is working on developing an automated multi channel marketing distribution.

TrustLayer Raises $15.1M Led by Craft Ventures. Based in San Francisco, the collaborative risk startup is automating paper-based processes for insurance verification and licenses for vendors, suppliers, borrowers and tenants. Their platform will provide solutions to industries including construction, property management, and banking. The newly raised capital will be deployed to make key hires and expand operations. 

Rapid Robotics Raises $36.7M Led by Kleiner Perkins & Tiger Global. Based out of San Francisco, Rapid Robotics has closed its third funding round in less than a year, bringing its raise to date to nearly $54M. The manufacturing robotics company shares how their robotic arm, the Rapid Machine Operator can perform 80% of the tasks on a factory floor. Additionally, with preprogrammed workflows, their product can perform common tasks such as welding, printing, and moving items between lines within hours of deploying.   

Airlift Raises $85M Led by 20VC & Buckley Ventures. Based in Pakistan, this startup has made a powerful pivot from commercial ride-sharing buses to quick commerce. This pivot was pandemic forced as the demand for transportation ceased. Now Airlift has more than 30 dark stores across Pakistan, providing consumers with products on demand. The Series B funding will enable airlift to expand into new markets in hopes to one day be a global brand. 

Ample Raises $160M Led by Moore Strategic Ventures. The modular battery startup based out of San Francisco believes that being able to swap batteries is the most effective way to solve range anxiety for electric vehicles. They are targeting verticals in car rentals, last mile, and ride-hailing, although in the long term they see their product as suitable for consumers. Ample will use the capital to target large customers and scale into new cities.

Apeel Sciences Raises $250M Led by Temasek. Founded in 2012 and has raised $635M to date, Apeel Science is working to improve shelf-life for fresh produce. The Santa-Barbara-based startup is applying a plant-based layer onto the exterior of the product that both allows moisture to be held in and oxygen to escape. In some cases, such as avocados can experience a 50% decrease in waste. The funding will enable the further roll-out of their product into new supply networks and partnerships.  

Deutsche Post to Acquire Hillebrand for $1.8B. The German logistics giant will ingest the beverage transporter in an effort to boost their seaborne container unit. Hillebrand has existed for 175 years and moves wine, beer, spirits, dairy products, olive oils, and other bulk liquids. This will be the largest acquisition for Deutsche Post since 2005 when they acquired Exel Plc for $7B. The deal will be funded through accumulated cash and is expected to make an immediate boost for shareholders. 

Faurecia to Acquire Hella for $8B. Faurecia will absorb Hella’s battery electronics, radar sensors, and other autonomous vehicle components manufacturing that will face growing demand with the adoption of autonomous vehicles. The consolidation of these two auto suppliers will generate €23B per year, providing strength in a year where supply shortages and disruptions have impacted the global auto market. The deal is expected to close by the first quarter of 2022. 

SPAC Radar 📡

Hagerty to Go Public Via $3B SPAC. The classic car insurer is in agreement with Aldel Financial Inc that values the companies at close to $3.1B. Founded in 1984 to initially  insure antique boats, now to be listed under the ticker “HGTY” on the NYSE. The deal includes a $704M PIPE and will deliver $820M in gross proceeds, which is expected to be completed by the fourth quarter of 2021. 

Company Building 🛠️

How to Make Awesome Product Gifs. If pictures are worth a thousand words, gifs might be worth a hundred thousand.

Content Marketing for Developers. We shared this internally to a couple portcos that sell to developers and the uniform feedback was something along the lines of “we agree but you need to balance it at the early stage with developer productivity and still having a clear content plan.”

What is Good Retention?. A group of 20 growth practitioners provide their perspective on what good vs great user and net revenue retention is. Being enterprise-focused, it’s interesting to see the difference between good vs great net revenue retention based on the target audience - VSB vs SMB vs Enterprise. It’s important to get a grip on these numbers as early as seed - we’ve seen some portcos surprise themselves as to how strong their product, value-prop, and GTM is =).

Who's Hiring? 👩‍💻

Head of Supply Chain at Gatik AI in Palo Alto, CA or Dallas-Ft. Worth, TX.

Computer Vision Developer at Coros in Menlo Park, CA (remote ok).

Head of People at Nextmv in Philadelphia, PA (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.