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 📦

The World Economy’s Supply Chain Problem Keeps Getting Worse. From supply shortages to a six-fold rise in container shipping prices, the global supply chain has almost seen every possible problem come its way this year. Now, factories in Southeast Asia are struggling to overcome the Delta variant, forcing manufacturers to source raw materials from different countries. Sunny Tan, EVP of Luen Thai International Group, summed up the supply complications quite well by saying, “I wish when shoppers see our product they give it a kiss when they realize how difficult it was just to get it to the shelf.” For more on the state of the global supply, check out Supply Chain Bottlenecks Likely to Endure, Experts Say and Southern Vietnam’s Stay-At-Home Order Puts Brakes On Factory Production.

Dollar Tree Describes Container-Ship Chaos, with Voyages Doubling In Length, Costs Skyrocketing, and One Boat Turned Away From China Over a Single COVID Case on Board. Dollar Tree, the nation’s fifth largest importer among retailers, is sounding the alarm on astronomical freight delays and costs. Dollar Tree CEO Michael Witynski stated that transit times from Shanghai to Chicago have increased to 73 days compared to the typical average of 35 days. The company will be calling upon charter vessels for the first time and is working to optimize port selection to avoid the chaos caused by congestion. It also is in the process of adding different supply sources that don’t rely on shipping through the Pacific, a move which could become permanent in the near future. The retailer has explored other transportation options, mainly airlines, but noted that both demand and costs are still too high. In other maritime news, Maersk Accelerates Fleet Decarbonization with New Vessel Order.

Disruption, Digitization, Resilience: The Future of Asia-Pacific Supply Chains. According to the report by Citi, 48% of supply managers in North America said their top strategy is diversifying supply sourcing while only 24% of Asian-Pacific (AP) managers have indicated akin strategies. Forty-one percent of AP managers have increased investment in supply chain digitization by more than 50%. Forty percent of AP supply chain professionals believe the next pandemic will be the future shock to supply chains. In comparison, only 4% of European and North American managers responded similarly. This report makes one thing very clear: there’s a distinct difference in viewpoints between the two hemispheres. For more on Asia-Pacific supply chains, consider reading Asia Pacific Supply Chains Remain Resilient.

Railroads Look to Ease Inland Congestion Through Metering. For much of 2021, swells of high ocean container volumes have been battering inland networks. Railroads are closely monitoring the balance between inflows and outflows to ease congestion in intermodal networks such as Chicago, Memphis, Kansas City, and the Ohio Valley. Even ocean carriers are doing all they can to limit the amount of inland point terminal bookings. While railroads believe metering will solve the problem, chassis providers say that it only increases dwell time which ultimately affects chassis capacity and opens the door for more inland congestion.

Truck and Trailer Build Rates Falling In the Face of Pent-Up Demand. Trailer OEMs are unwilling to accept new orders in the wake of multiple material and component supply shortages coupled with a labor deficit. According to Frank Maly, director of CV Transportation analysis and research at ACT Research, once OEMs begin accepting orders again, expect a surge in order volume that consumes a significant portion of the remaining 2022 production slots.” On top of the kink in trailer production, truck build rates aren’t looking any better. OEMs have had to limit production due to the ongoing chip shortage which saw Class 8 truck production decrease to a 15-month low. Elsewhere in trucking, Mini-Bids Becoming Permanent Truck Contract Fixture: Transplace.

Inventory Confounds Nordstrom In Subdued Q2. Total company net sales for the quarter rose 101% but fell 6% in comparison to 2019. William Blair analysts attributed this to a shift in priority as wholesalers place more focus on direct selling channels. Nordstrom’s urban stores are struggling to bring in business in part to a heavy dependence on tourism while suburban stores seem to be managing just fine. Digital sales rose 30% YoY and 24% from 2019, making up 40% of total sales. As we head into the holidays, Nordstrom, like most retailers, expects inventory to be tight. In related retail news, Supply Chains Adopt, Invest Millions In Inventory Optimization Tech and For E-Commerce Logistics Firm Radial, Christmas Is Coming Early. Very Early.

Walmart Announces GoLocal, A Last-Mile Delivery Service For Other Retailers. The new service enables both large and small merchants to take advantage of Walmart’s own delivery platform to fulfill customer orders. GoLocal will be hiring gig workers from Walmart’s Spark Driver program which the retailer uses for its own same-day grocery delivery. The service is already gaining momentum after signing contracts with a couple undisclosed national enterprise retailers. GoLocal is a part of Walmart’s broader strategy of allowing other businesses to access its own technology and services.

Mobility 🚗

With The Ongoing Chip Shortage, UK Car Manufacturer Output is Back to 1956 Levels. As the chip shortage continues, the downstream effects in car manufacturing are being felt, with UK car manufacturers producing the lowest number of cars in July in decades. German car manufacturers aren’t better off, with VW only operating on single shifts in its production plants following a summer break. The chip shortage has clearly affected vehicle production numbers in a big way. JLR has already issued warnings that the expected car shipments in the current quarter will be less than 50% of what was originally planned. There is no short term solution to the shortage in sight as car manufacturers look to improve upstream supply chain controls to avoid future shortages. In related news, Mazda Shuts Down Plants As Cargo Flights From Shanghai Dry Up.

Despite Remote Work, Rush Hour Has Returned. The pandemic has created record low traffic, specifically when social distancing and remote work was in full force. The once empty streets are returning to the congestion they once were. Los Angeles has experienced a 4% increase in road traffic from a pre pandemic level. Furthermore, traffic patterns have differed from the traditional morning and evening rush hour spikes. Roads are now experiencing steady build up of traffic throughout the day. Meaning great news for commuters and bad news for those running mid day errands, which experts and transportation officials are suggesting is the cause of the shift, although exact cause is difficult to determine. On a related note, The Return To Commuting May Actually Be A Good Thing For Your Brain, and How The Hybrid Work Revolution Is Already Transforming Economies.

Alphabet’s Waymo Will Stop Selling LIDAR. In an interesting turn of events Waymo has decided that they will not manufacture LIDAR units to sell to third parties which was a part of its original strategy to recoup some development costs. It was originally unclear whether the revenue from the third party sales would have offset increased costs. At the same time Waymo will continue LIDAR production for their own use in Waymo Driver, though they have signaled that they are open to using third party providers of LIDAR solutions in the future. It looks like Waymo is undergoing an internal reorganization to focus on its core product, the Waymo Driver platform. In related news, Waymo Brings Self-Driving Taxis to San Francisco — With a Catch, and Toyota Halts All Self-Driving ePalette Vehicles After Olympic Village Accident.

Bosch Says the Semiconductor Supply Chains in the Car Industry No Longer Work. Bosch, one of the largest suppliers to car manufacturers globally, is looking to change the way the semiconductor supply chain is managed. In an age where everyone is switching to more on demand production and delivery, Harald Kroeger, management board member at Bosch, said bluntly, “You cannot run on a system [where] every two weeks you get an order. That doesn’t work.” It’s clear these aren’t just recent thoughts. A few years ago, Bosch started construction on a $1.2B semiconductor fabrication plant in Germany which opened last month - a welcomed sight in the current crisis. One can only hope that with better direct control over the semiconductor fabrication process the next chip shortage can be avoided. The current shortage will continue until at least mid 2022. For a semiconductor crash course, check out Why There Is A Chip Shortage In the First Place? and What is TSMC’s Role In It?

Lordstown Motors Taps Former Icahn Exec as CEO to Put Its EV Truck Ambitions Back on Track. It has been a troubled year for Lordstown Motors. The automaker has experienced far higher capital consumption than anticipated and repeatedly delayed the date for first deliveries forcing Lordstown to take a lifeline to keep the company afloat back in June. Only time will tell if the experienced automotive executive can deliver on the promise of Lordstown Motors. While many new car companies have emerged, few have managed to crack the incredibly difficult task of producing cars at scale. As a reporter at Reuters put nicely, “[e]lectric car and van startups racing to become the next Tesla Inc all want to avoid Elon Musk's journey through "manufacturing hell.”.

Elon Musk Says Tesla's New Driver Assistance Software Is 'Not Great'. It's clear that building fully autonomous cars is no easy task and Tesla's autopilot has long been promised to deliver on this self-driving future. The release of the first full self-driving beta of Tesla’s autopilot is “not great” according to Elon Musk. A bold statement given all the recent press around AV accidents and the formal federal probe into Tesla’s autopilot accidents. It will remain to be seen how quickly Tesla’s full self-driving project progresses, but there’s still a long road ahead. Related, What Are You Buying With Tesla’s ‘Full Self-Driving’ Autopilot?, and The Secret Weapon for Many Self Driving Startups: Human 'Operators'.

GM's $2B Chevy Bolt Fire Recall Casts Shadow Over Electric Vehicle Market. The Chevy Bolt has become the anti hero of EVs and one of the costliest recalls for GM to date. The Bolt showed just how expensive manufacturing mistakes can be for EV manufacturers, especially in and around battery technology. It’s not just the financial loss of the recall that’s high, it’s the negative press EVs are getting that brings additional costs in convincing drivers to make the switch from ICEs. For those wondering, the actual risk of a battery fire is over perceived, less than 0.006% of Chevy Bolts have caught fire. Related, Who is Making These Burning Bolt Batteries?.

Fundraises and M&A 💸

Odiggo Raises $2.2M Led by Y Combinator, 500 Startups & More. This startup is connecting car owners to auto service providers on their digital marketplace. Based out of both Egypt and Dubai, Odiggo Raises takes a 20% commission on every transaction from the roughly 50,000 car owners in their three markets. As well, a connected device will communicate the status of the vehicle to the owner and make service recommendations. The newly raised capital will enable further development of their product.

MAXAB Raises $15M Led by RMBV to Acquire WaystoCap. The Egypt-based startup who in July announced their $40M Series A, attained more capital to expedite their vision of geographic expansion. The acquisition of Morocco-based B2B distribution platform WaystoCap was announced this week for an undisclosed amount. WaystoCap has over 8,000 retailers on its platform, while MAXAB is estimated to have over 70,000. The startup will continue to look to grow across North Africa and the Middle East as they set new milestones.

NYSHEX Raises $15M Led by NewRoad Capital Partners. NYSHEX, or New York Shipping Exchange enables dual-committed ocean contracts and provides more transparent terms. Nyshex is hoping that their platform will also increase asset utilization and allow for more predictable costs and revenue. Nyshex allows for contracts to be extended for several weeks or longer and boasts a 99% contract fulfillment rate. The new funding will be used to take on more carriers and improve their payment system.

Coco Raises $36M Led by Sam Altman, Silicon Valley Bank & Founders Fund. The spin-out startup out of UCLA is building last-mile robotics and is currently operating in 5 neighborhoods around Santa Monica. Their tech has delivered a 97% on-time delivery rate and demonstrated the ability to decrease delivery times for partners by 30%. The funding comes at a time where the company is said to be piloting and launching new merchants every day.

Upstream Raises $62M Led by Mitsui Sumitomo Insurance. Based out of Israel, Upstream has developed a cloud based security feature for vehicles that prevents remote hackers from gaining access. Upstream achieves this by intercepting all of the data directed toward the vehicle and can block those that present a risk. The startup plans to deploy the funds to expand their data and analytics capabilities, as well scale their current operations.

CADDi Raises $73M Led by Globis Capital Partners & World Innovation Lab. This Japan-based startup is helping manufacturers tackle procurement through their supply and demand aggregation tool. CADDi can assess the capabilities of different manufactures and direct work flow to those best suited to fill the customers priorities. The new funding will allow for accelerated digital transformation, increase headcount and expand into new global markets.

Zetwerk Raises $150M Led by D1 Capital Partners. This startup is based out of Bangalore and is running a B2B marketplace for manufacturing items. This round’s valuation places Zetwerk as India’s 25th Unicron this year, up from 11 last year. The startup will deploy the capital to extend the range of its technology stack and expand into new geographies.

Fontinalis Raises $104M For Third Fund. With an initial fund vintage of 2009, and investments such as Lyft, Postmates, Telogis, Ouster and nuTonomy. The fund will continue their initial approach with a focus on mobility opportunities but additionally expand into themes that optimize both the movement of freight. Furthermore the fund will seek to invest in broader markets such as demand planning, eCommerce technology and fintech with mobility applications. One of their portfolio companies, Tomorrow.io who provides large data sets to better predict weather, is an example of this.

Delhivery To Raise $1B Via IPO. This startup offers their full stack of logistic and fulfillment services to their over 10,000 direct customers. The Delhi-based startup has claimed to have processed over 850M transactions since their inception and a cash balance pre-IPO of over $550M. The startup will go public after being started in 2011 with some of their backers including Softbank Vision Fund and Carlyle Group.

Rivian Files To Go Public For Over $80B. The electric car maker who has raised to date over $10B, with backers such as Amazon and Ford, will look to go public before the end of the year. Their two vehicles, the R1T and R1S debuted at the Los Angeles Auto Show in 2018 although have not begun hitting consumers driveways. The company also undertakes commercial orders, such as building out of electric delivery vans for Amazon. Rivian will look to begin filling their first customer orders this September.

SPAC Radar 📡

Virgin Orbit SPAC Valued at $3.2B. Richard Branson, who just recently went on his first space endeavor, is working on providing satellite launch services through his organization, Virgin Orbit. Their approach differs from others such as SpaceX who launch vertically, while Virgin utilizes a 747 plane to sling shot their rockets into space. Space as a service shows to be roughly a $9B growing market although the road map ahead will be daunting and increasingly competitive.

Company Building 🛠️

Tips on Hiring a VP Engineering from Shopify's VPE. A hiring playbook from Shopify’s VP Engineering that outlines a 3-part approach (process, people, technology) for startups hiring a VP Engineering.

How To Create a Sustainable Entrepreneurial Community. This post from Brad Feld is over 10 years old and interesting as I’ve had this conversation with others in the last month from Pennsylvania to Kansas and places in between. I would love to read an update on this in a world that prioritizes remote work, distributed business building, and increasingly detaches location from economic opportunity.

The Secret to Recruiting Quickly and Retaining Your People. While the punchline feels obvious, it’s often not implemented - spread the burden of recruiting and retaining across your team. In Tunguz’ words, “People managers in startups distribute the recruiting and retention work over more people, enabling the company to scale faster, and more efficiently by reducing retention.”

Who's Hiring? 👩‍💻

Accounting Analyst at Stord in Atlanta, GA.

Customer Success Specialist at Milk Moovement in St. John’s, Halifax (remote ok).

Edge Computer Vision Developer at Coros in Menlo Park, CA (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.