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 💭

It was a busy week in the world of supply chain with Coupa’s purchase of Llamasoft and Ocado snapping up two robotics upstarts. The read-through on the former can be distilled to the fact that board rooms are realizing the large (and important) opportunities in supply chain technology as we’ve traversed 2020. We expect this to continue into 2021 and for supply chain technology to become a bonafide vertical for venture investment.

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Supply Chain 📦

MSC Buying Up Second-Hand Container Ships. Asset price increases are expected within the improving charter market, causing MSC to undergo a buying spree of second-hand tonnage worth around $180M. The Swiss carrier added six container ships to its fleet through purchases from Zeaborn and Allied. Ranking 2nd in terms of container vessel capacity, MSC aims to bridge the capacity gap on its 2M partner, Maersk. Staying in maritime, Maersk’s Integration Strategy Poses No Threat to Business and IMO’s Controversy Distracts from Long Term Decarbonization Goals.

Walmart Decides Against Shelf-Scanning Robots. Nearly a year after increasing its commitment to more robots, Walmart has moved to terminate its contract with robotics company Bossa Nova Robotics, which saw around 500 shelf-scanning bots in Walmart’s more than 4.7K stores when the contract ended. The retailer worried about shoppers’ reactions to the robots and found simpler solutions to managing on-shelf products using human workers. Related, WES Becoming Essential in Warehouse Tech Stack.

🌟Amazon May Launch US Delivery Service. With Amazon's in-house parcel delivery division on track to be the same size as FedEx in the US by 2020 and as big as UPS by 2022, Morgan Stanley believes the retailer may launch a third-party delivery service as soon as 2021. The move would come as parcel volumes surpass 100B across the globe and carriers like UPS, FedEx, and USPS struggle to find the adequate capacity to keep up with eComm demand. As capacity shrinks, see the Growth of Regional Parcel Carriers.

Volvo and Daimler Launch Fuel Cell Joint Venture. The partnership will focus on fuel cell development and production in heavy-duty trucks, specifically a buildout of a dual system with 300 kW continuous output for heavy long-distance trucks. Different from others, the Volvo/Daimler concept vehicle will not see the hydrogen stored in gaseous form, but in liquid form at -253 degrees Celsius. With greater EV truck adoption, Fleets Detail Class 8 Battery-Powered Truck Experiences.

FMCSA Seeking to Gain Traction in Autonomous Trucking. Aiming to help the government establish safety rules for autonomous trucks, federal regulators seek approval to survey private trucking companies. The questionnaire will garner opinions of automated driving systems before and after hands on demonstrations of ADS technology. Also in over the road, Truck Operations Move to the Cloud and XPO’S Sales Strategy Shift.

New Survey’s Show COVID-19 Habits are Here to Stay. Expect sustained demand for more home deliveries as more than 54% of consumers shop online more often today versus pre-pandemic while the number of consumers doing more than half their shopping online is nearly 3x higher than pre-pandemic volumes (45% now vs 16%). Retailers and delivery networks will reap the benefits as 55% more consumer shop on Amazon, 36% more shopping at Walmart, and 24% spending more of their money with small or local businesses. Also, as we prep for a change in leadership, How Trump Has Rewritten Trade Politics.

Mobility 🚗

Uber and Lyft Win California Prop-22 Battle. In a notable win for Uber and Lyft, ride-hailing drivers in California will remain classified as independent contractors instead of employees, rendering them ineligible for employee benefits such as healthcare, paid sick leave, and a minimum wage. Nearly 60% of California voters cast their ballot in favor of Proposition 22, legislation intended to bypass California worker classification law which categorized gig drivers and couriers as employees. Related, Election Roundup: Transit Wins in Austin, Bay Area, and Seattle.

🌟VW Anticipates Fine After Missing CO2 Emissions Reduction Target. VW violated regulations establishing all carmakers selling in Europe must have a CO2 emission average of 95 g/km or lower for its fleet. If the fleet emission average surpasses 95 g/km in 2020, the respective company has to pay €95 per additional gram of CO2 multiplied by the number of new vehicles it sold until the end of the year. Based on VW’s 2020 sales figures, the automaker may fork out around €270M in fines. An industry wide environmental push has Bentley Going EV-Only by 2030.

5G, Robotics, AVs, and the Eternal Problem of Latency. Full adoption and implementation of AVs, factory robots, and virtual reality are likely unattainable until we extract latency from networks. The varying scale of latency tolerance ultimately boils down to bandwidth, as Shivendra Panwar claims, “One approach is seeing if we can get the latency and reliability right, is to offload all of that computation to, let’s say, the nearest base station or a wireless Wi-Fi access point. This will reduce the amount of weight that you’re carrying around in your exoskeleton and reduce the amount of battery power that you need to be able to do this for long periods of time.” For improved aerial mobility, Canada Establishes Air Mobility Consortium.

Panasonic to Develop New Battery Cell for Tesla. Panasonic will develop a cylindrical cell for Tesla, a component key to reducing overall vehicle costs. Cell production costs may drop 14% and include a 16% increase in range with 5x the amount of energy compared to a current battery cell. The duo has worked to accelerate output at the Nevada Gigafactory and plan to boost the plant’s total capacity 10% by 2022. Also, Tesla Is No Longer the Biggest Fish in Western Europe.

Car Insurance Rates Fall 10% Thanks to Safety Tech. Swiss Re AG claims ADAS could potentially reduce the frequency of car accidents up to 25%, in turn slashing worldwide insurance premiums for fully ADAS-equipped cars $20B by 2020. A Highway Loss Data Institute study shows lane departure warning systems, blindspot detection systems, and backup cams significantly reduced accident trends. On the flip side, vehicles outfitted with such high-quality sensors aren’t cheap to mend.

The Scooter Battle for NYC. The Big Apple released a request for expressions of interest as eScooter operators grapple for operational market share in the city. The city will also seek out other micromobility operators like data aggregation and analysis companies, on-street charging and parking vendors, safe-riding course providers, as well as scooter collection and impound services. eScooter pilots must launch by March 1, 2021 and are only permitted in the Bronx, Brooklyn, Queens, and Staten Island. Related, The Unicorn’s Promise to Rid Faulty eScooter Ridesharing.

Fundraises, M&A, Talent 💸

Logisly Raises $6M in Series A Funding Led by Monk’s Hill Ventures. Based in Jakarta, Logisly is a B2B tech-enabled logistics platform connecting shippers with thousands of trucks from hundreds of verified corporate carriers in their network. New capital will streamline logistics and operations in Indonesia.

Provizio Raises $6.2M Led by Bobby Hambrick, EIC, and Act Venture Capital. Founded in 2019, Provizio is an Irish startup using technology to perceive, predict, and prevent automotive accidents in real-time using proprietary long-range imaging sensors & AI on-the-edge. The fresh funds will help to accelerate the development of its Accident Prevention Technology.

Agora Raises $7M in Series A Funding Led by 8VC. Agora is a Bay Area-based company streamlining the materials supply chain for commercial trade contractors. A specific use of capital was not detailed.

Apkudo Raises $14M in Series B Funding Led by Harbert Growth Partners and MissionOG. Apkudo is a supply chain automation startup providing a universal system for managing connected devices across the entire supply chain by securely bridging internal systems and external partners into a single platform. The fresh funding will assist in accelerating Apkudo’s global expansion.

Pony.ai Raises $267M in Series C Funding Led by Ontario Teachers’ Pension Plan Board’s Teachers’ Innovation Platform. Backed by Toyota Motor Corp., Pony.ai is an autonomous driving startup now valued at $5.3B. New capital will help boost the company’s presence in the US and China.

REEF Raises $700M From SoftBank. REEF provides hardware, software, and management services for parking lots along with adding infrastructure for cloud kitchens, healthcare clinics, logistics and last-mile delivery, and brick and mortar retail spaces on top of those now-empty parking structures and spaces. Fresh funds will scale REEF’s 4.8K locations to 10K new locations around the country and to transform the parking lots into “neighborhood hubs”.

🌟Ocado Acquires Two US Robotics Startups for $262M and $25M. British online supermarket Ocado acquires Kindred Systems for $262M and Haddington Dynamics for $25M. Kindred Systems builds robots used to pick and pack online orders, while Haddington Dynamics creates robotic arms. Both acquisitions will enable the company to accelerate delivery, innovate more, and grow faster.

🌟Coupa Purchases Llamasoft for $1.5B. Llamasoft is a supply chain planning company offering productized applications and innovative solutions to accelerate the adoption of AI and other technology to improve internal decision making. The purchase will give customers such as BMW, Airbus, and P&G access to Llamasoft’s artificial intelligence-powered technology.

TRATON and Navistar Reach Merger of $3.7B. Navistar is the fourth-largest heavy-duty truck maker in North America and TRATON is a maker of International trucks and IC buses. The merger will grant further access to the North American market to the former Volkswagen subsidiary.

Aeva to Go Public Via SPAC Merger With InterPrivate Acquisition Corp. Aeva is a startup whose "4D" Lidar can measure distance and instant velocity without losing range while preventing interference from the sun or other sensors. Expected to close in 2021, the post-deal market valuation will be in the neighborhood of $2.1B.

Company Building 🛠️

How Startup Financing and M&A Are Impacted by the Pandemic. Despite everyone bracing for doomsday in March, it looks like startup financing activity is unchanged and quality acquirers are still on the hunt for good businesses.

A Sober Look at SPACs. “Although SPACs raise $10 per share from investors in their IPOs, by the time the median SPAC merges with a target, it holds just $6.67 in cash for each outstanding share. We find, first, that for a large majority of SPACs, post-merger share prices fall, and second, that these price drops are highly correlated with the extent of dilution, or cash shortfall, in a SPAC. This implies that SPAC investors are bearing the cost of the dilution built into the SPAC structure, and in effect subsidizing the companies they bring public.”

The Observer Effect: Daniel Ek. An interview with the Spotify founder that covers time management, decision making, board management, and more.

Who's Hiring? 👩‍💻

Technical Project Manager at SVT Robotics in Norfolk, VA.

Director of Sales at Skupos in Denver, CO (remote ok).

Mechanical Engineer at Gatik in Palo Alto, CA.

Check out other jobs at Dynamo portfolio companies.💥 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.