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 💭

In our Q2 letter to Limited Partners, we warned of the perfect storm that is ensuing with low inventories and supply chains at capacity. It’s a perfect backdrop for a supply-led recession - the first of its kind based on our research and the first supply-side economic disruption since the 1979 oil crisis. A segment from that letter that’s worth sharing with 50+ ships waiting to anchor at the Port of LA/Long Beach.

We continue to be cautious about the broader economic outlook but equally aware that such stress paves the way for new technologies and disruptors. If you’re a founder building in/around supply chain technology and this applies to you, reach out to us!

We Are Dynamo,

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

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Supply Chain 📦

Consumer Demand Must Ease to End Supply Chain Crisis, Says Maersk Executive. How can the global supply chain escape the “vicious circle” of supply shortages and delivery disruptions? According to Morten Englestoft, chief executive of Maersk-owned APM Terminals, consumer demand needs to shrink fast. This would essentially allow the supply chain time to catch up to the heightened demand caused by COVID and the eCommerce boom. Englestoft also noted that a large majority of industry officials believe this tough situation will last deep into 2022. For more on the state of supply chain, consider reading The US Expected an Economic Takeoff. It Got a September Slowdown and Hurricane Ida Could Continue to Slow Supply Chain Operations For Weeks.

IKEA is Buying Containers and Chartering Vessels. This flex is a result of port congestion delaying shipments. IKEA is now one of a few retailers taking matters into its own hands, following Home Depot, Walmart, and Dollar Tree. Insurance groups have warned about the risks of dry vessels carrying containers as this trend picks up speed. IKEA also attributes low store inventory to a variety of raw material and supply shortages. In related news, US, China, Europe Grapple with Container Shipping Bottlenecks or Carriers 'Moving In' On Landside Services Could Push Forwarders Out Of Business.

Push to Let Teens Drive Trucks Interstate Divides the Industry. If you can legally smoke a cigarette then you may be eligible to drive a semi across state lines if the proposed legislation by the Senate is passed. The trucking industry is struggling to find drivers and some folks in the industry believe that this could expand the talent pool. Other people have flagged demanding work conditions, long driving hours, and time away from home as core reasons why this legislation should not be passed. The pilot program would allow up to 3,000 drivers to participate. Across the pond, the UK Government Plans to Shorten HGV Driver Testing Process.

Aircraft Emissions Present A Roadblock to Supply Chain Sustainability Goals. Aviation produced 2.8% of global CO2 emissions in 2019 according to the International Energy Agency. Aircrafts need high-power output and energy dense fuels which are the biggest hurdles to decarbonization. Airlines that place strong focus on lowering emissions will see service utilization increase substantially. Sustainable aviation fuels, known as SAFs, are gaining attention from many airlines but, as FedEx points out, supply is limited and costs three times as much as conventional jet fuel. Also, Airfreight ‘Single Bright Spot’ For Asia-Pacific Aviation Over the Summer and Air Freight is at a Pivot Point.

CMA CGM Makes The Decision to Stop All Spot Rate Increases. The measure started on September 9, 2021 and will last through February 1, 2022. Outside of this policy, the French shipping company is also “investing heavily to strengthen its service offering” by increasing fleet capacity by 11% since the end of 2019 and adding 780,000 TEUs to its container fleet. All of these actions by CMA CGM reveal the company’s priorities which are clearly about maintaining customer relationships during this turbulent time for the shipping industry. For more on maritime, consider reading Portland Popularity Growing Among Trans-Pacific Carriers and Port of Virginia Weathers Record Volumes with Automation, Agility.

Grubhub, DoorDash, UberEats Sue New York City Over Fee Caps. The three food-delivery companies filed in federal court in New York on Thursday. The legislation limits the amount of commission these companies can charge to 15% of food orders for delivery and 5% for advertising. The suit counters legislation saying “it interferes with freely negotiated contacts between platforms and restaurants by changing and dictating the economic terms on which a dynamic industry operates.” During the pandemic, restaurants were forced to close or work with these delivery partners who had commission pricing power. In other food fulfillment news, Instacart Goes Deeper Into Digital Advertising as Grocery Delivery Slows.

Retailers’ Inventories Suggest Restocking Long Way From Finished. In the second quarter of 2021, inventory levels of the largest retailers increased. These levels have been historically low as of recently, so at first glance, there’s a reason to celebrate. However, the reality of the matter is that when we compare these inventory levels to 2019, they're still glaringly low. Retailers did see an increase in inventory-sales ratios which can be attributed to quicker product turnover and inflation. Container imports at the country’s top 10 ports are up nearly 26%, which suggest inventory correction is far from over. Related, New Strategies to Engineer Retail Supply Chain Resilience for 2022 and Beyond.

Mobility 🚗

“Infotainment” Systems Are Becoming Flashy, Feature-Packed Distractions. With the ever increasing digitization of cars, the myriad of features available has grown as well as the average display size in infotainment systems. The NTSB blames only 10% of annual crash fatalities on distraction, though it is widely accepted that this number is far underreported. It remains to be seen if driver assist features can compensate for increased driver distraction or if this leads to regulation around infotainment systems. In related news, Road Fatalities Keep Rising Despite COVID Depressing Traffic and Investigators Probing July Death of Man Hit by Tesla in New York.

Biden Administration Sets Goal of Replacing All Jet Fuel With Sustainable Alternatives by 2050. Environmental efforts are reaching the aviation industry which is change resistant given its lack of feasible kerosene fuel alternatives to date. The goal of the administration is to produce about 3B gallons of sustainable fuel by 2030 to reduce emissions by 20%. The question that remains now is how that target will be achieved, given the current high cost of these green fuels. This announcement may very well bring some much needed additional funding and opportunities into the space in the near future. Hopefully leading to a future in which all of us can enjoy carbon free aviation. In other aviation news, Boeing’s 787 Deliveries to Be Delayed to At Least October, and EU Slaps Fuel Tax on Private Jets. 

Toyota to Spend $9B on Electric-Car Battery Plants. Toyota has announced it will invest $9B on EV battery plants, indicating its commitment to the BEV segment. Toyota Which Has Bet Heavily On Hydrogen Mobility in the Past is looking like they have completely accepted the battery powered future. This will no doubt raise questions around the availability of battery production resources, bringing yet another big player to a market with surging demand and supply problems. Only time will tell if Toyota can catch up to its competitors quickly enough in order to reach their 2M EV car sales goal by 2030. In battery related news, BMW Orders Up $24B of Batteries as EV Demand Grows, and A More Efficient Type of Battery Arrives in a Wristband Fitness Tracker and it Could Soon Reach Your Car.

VW CEO Fears Chips Will Be in Short Supply for Years to Come. Without a doubt, one of the most pressing pain points in the auto industry this year has been the chip shortage. The CEO of VW made that clear in an interview, where he warns that VW expects the shortage to last from months to years, given the ever increasing demand for semiconductors. Not only is there a current shortage, but the demand is expected to increase by over 10% in the next year. The translation of this into supply terms is quite simple, the current end of the chip shortage correlates directly to the speed of building additional production capabilities at the world's leading semiconductor fabs. Related, Chip Shortage Hits Domestic Auto Wholesales in August and Dispatches Dip 11% and Chip Shortage Likely to Keep Car Prices Sky-High Through 2023.

Daimler Pulls the Plug On Plug-In Hybrids. Much discussion has been had around plug-in hybrids, a category that sit in between pure BEVs and ICEs, and what their role might be in the transition. It is clear from Daimlers announcement that they will not make any more large scale appearances at Daimler in the future, with Daimler opting to hop directly to BEVs. It stems from the reason that others will follow suit, most notably BMW which has a number of plug-in hybrids in their pipeline. Also, Italy Seeks to Shield Supercar Maker From Combustion Engine Ban and New York Law Phases Out Most Gas Powered Vehicles by 2035.

VW and Argo AI Reveal First ID Buzz Test Vehicle For Autonomous Driving. VW and their partnership with Argo AI appears to be strengthening with their announcement ahead of the IAA 2021 in Munich. The express goal is to fully develop a self-driving van in the next 4 years. This should put VW well on track in the self-driving car race, as Argo just recently announced a deal with Ford and Lyft to put 1,000 self-driving cars on the road over the next 5 years. What’s interesting to take away here is the position of Argo AI as a supplier to both Ford and VW. It may be a good idea to keep a close eye on the developments of the VW /Argo van and compare the progress to that of Ford / Argo. In other AV news, Intel’s Mobileye and Rental Giant Sixt to Launch a Robotaxi Service in Germany Next Year and Chinese Driverless Car Firm WeRide Launches ‘Robovan’ for Autonomous Deliveries.

Stealth Robocar Startup Sees Remote Drivers as Autonomy Shortcut. In a bid to get around a lot of the difficulties around level 4 and 5 autonomy, Vay, the German autonomous automaker, relies on trained remote drivers to pilot the vehicle. The startup claims to have gotten around latency issues for piloting, and is currently testing on the streets of Berlin. The startup is aiming to achieve full autonomy down the road, but believes the remote driver as a necessary step to speed up roll out. Definitely an interesting AV case to follow for initial findings and results. Related, Ford Hires Apple Car Chief in Coup for Recovering Automaker, and AI Self-Driving Cars And The Looming Aggregated Statistical Trolley Dilemma.

Fundraises and M&A 💸

Vizion Raises $3.25M Led by Tech Square Ventures. This Dynamo-backed startup is providing ocean freight visibility through their API. They target forwarders, beneficial cargo owners, and software providers by providing quality data to increase the capabilities of underlying systems. The Palo Alto-based startup is making strides to becoming the liaison of data for maritime shipping and will deploy the new funding to increase headcount. 

Elixia Tech Solutions Raises $1M Led by RVCF. This supply chain solutions startup offers a wide range of products from vehicle tracking to warehouse monitoring. The Mumbai-based team is working to enable real-time visibility and transparency through the use of digital twins and software which can be displayed on their supply chain control tower platform. The funds will be used to expand their presence in India and international markets. 

Airbolt Raises $2M Led by 72Capital. Based out of Melbourne Australia, produces connected tracking devices for both consumers and enterprise customers. Airbolt’s enterprise offering provides the ability to track fleets, provide remote access through smart locking capabilities, as well create webhooks and triggers. This all can be managed through their customizable dashboard. The new funding will be used to grow their presence in the US and Europe. 

Portcast Raises $3.2M Led by Newton Partners. Based out of Singapore, this startup describes itself as a “next-generation logistics operating system.” Portcast will allow for the efficient gathering of data such as shipment tracking, but will also help provide insights to impacts of progressing weather and other bottleneck risks. Other areas that Portcast hopes to provide an understanding of the emotions generated by each shipment. 

Headout Raises $12M Led by Glade Brook Capital. The travel marketplace startup, who still feels the impact of the COVID-19 pandemic is rebounding with their latest funding round as demand for domestic travel is growing. Headout manages its marketplace closer than other booking websites to ensure quality and consistency. This differentiator has helped the startup increase conversion for their partners and their take rate. The newly acquired capital will be used to expand into 300 new cities and make roughly 150 new hires. 

Printify Raises $45M Led by Index. Founded in 2015 and now sends over a million units of printed goods per month. Printify connects over 2M online merchants and creators to print shops that enable anyone to capitalize on their unique brand by providing over 370 customizable products. Printify is using spatial awareness to open up their print shops all over the world that allows them to be a primary option for on-demand manufacturing. The funds will be used to continue this global footprint and grow the headcount.

Shopup Raises $75M Led by Valar Ventures. This Bangladesh startup is digitizing their local stores which accounts for 95% of all retail in India. Roughly 4.5M of these mom-and-pop storefronts pose a massive opportunity, although many of these stores struggle to get inventory and do not possess the leverage to negotiate terms. This forces many to buy on credit that leaves many merchants carrying liquidity risk. Shopup is trying to address these issues of the fragmented market and will use the capital to expand their presence across India. 

Marshmallow Raises $85M Led by Passion Capital. This London-based startup is taking a new approach to pricing auto risk. Marshmallow takes in a wider set of data points to increase the adequacy of the insurance price for drivers. In one example, a foreign driver was quoted a price 51% cheaper on Marshmallow than the legacy providers. To date Marshmallow has sold over 100K policies in the UK and is looking to expand both geographically and other insurance products. 

Agile Robots Raises $220M Led by SoftBank. Operating out of both Munich and Beijing, their full-stack, 5 fingered robot is making significant strides toward human capabilities. According to the founder and CEO of Agile Robots, Zheopen Chen shared “Agile Robots realistically brings the next generation of robots into industrial intelligent precision assembly areas and medical treatment scenarios…” The unicorn valuation and new funding will be used to expand sales operations.

VW Intends to Launch $355M Decarbonization Focused Venture Fund. This move by Europe's largest automaker comes at a time when combustion engines and carbon emissions are at the height of conversation for all stakeholders alike. VW’s CEO, Herbert Diess acknowledged that carbon capture is possible but currently too expensive to scale. Volkswagen additionally has been making significant investments into electric vehicles and renewable energy sources. 

Echo Global Logistics Goes Private Via $1.3B Acquisition By Jordan Company. The 3PL that provides tech-enabled supply chain services will be acquired at a 54% premium. Jordan Company, a private equity firm that was founded in 1982 and manages over $17B in assets. This deal will allow Echo to fuel its growth and increase its supply chain capabilities. On the Nasdaq, Echo gained  52% in premarket trading early Friday morning. 

UPS Set to Acquire Roadie For an Undisclosed Amount. Roadie provides last-mile solutions for goods that don’t fit the shipping parameters of other providers, such as UPS. Roadie does not require specific packaging to get from point A to point B, for example, many of their parcels are in shopping bags. Their delivery platform integrates with Shopify, allowing online merchants to easily offer new fast delivery services for their customers. With the deal set to close in the fourth quarter, the acquisition will provide UPS with the means to provide gig last-mile delivery services just in time for the holiday season.  

SPAC Radar 📡

Packable to Go Public Via $1.6B SPAC with Highland Transcend Partners I Corp. The parent company to Pharmapacks is Amazon’s #1 third-party seller in the US and expects to do $456M in annual revenue this year. Packable also sells its products on websites such as eBay, Kroger, Target, Walmart, and even some DTC sites. The goods producer has noted supply chain disruptions as a potential risk with specific goods or marketplaces carrying a significant amount of business. This move comes 10 months after raising over $250M from Carlyle Group.

Company Building 🛠️

The Effects of Remote Work on Collaboration Among Information Workers. “Our results show that firm-wide remote work caused the collaboration network of workers to become more static and siloed, with fewer bridges between disparate parts. Furthermore, there was a decrease in synchronous communication and an increase in asynchronous communication. Together, these effects may make it harder for employees to acquire and share new information across the network.”

Defining A Career Path for Developer Relations. It’s interesting to note that a handful of Dynamo portcos have a meaningful developer-first orientation to them. The subject of hiring Developer Evangelists or DevRel experts is important to this cohort as software goes deeper into the supply chain tech stack. Worthwhile read for CEOs as they think about making these first hires and leading them for the long-term.

Sending Cold Emails. Just read the Twitter thread - useful for sales, human capital, and fundraising efforts.

Who's Hiring? 👩‍💻

SDR at Coros in Menlo Park, CA (remote ok).

Technical Writer at Nextmv in Philadelphia, PA (remote ok).

Software Engineer at Amitruck in Nairobi, Kenya.

💥 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.