Dynamo Dispatch. A 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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Clay, Santosh, Jon, and the rest of the Dynamo team

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Supply Chain 📦

Wheat Supply Still Pressured Despite Price Drop. Wheat prices have been highly volatile over the past few months following Russia’s invasion of Ukraine, reaching a decade high. However, the wheat market hit a steep decline last Monday with US wheat futures reaching their lowest point since February. A lot of factors have influenced this price drop, including the normalization of weather becoming far more favorable for wheat production. Yet, perhaps most importantly, demand has also decreased substantially. The farm feed market, which generally makes up 20% of wheat production, has witnessed a transition towards corn feed due to the previous price premiums of wheat. It appears that this will remain a temporary issue as several significant “demand signals” have occurred recently, such as Egpyt’s Purchase Of 180 K Tons Of Indian Wheat. For further reading on wheat demand, read World Wheat Stocks Expected To Drop To 6-Year Low.

June Services PMI Grows But At A Slightly Reduced Rate. According to the most recent edition of the Services ISM Report on Business, the June services economy has performed comparably to May at 55.3. Despite signaling growth (as a reading at 50 indicates growth), the reading decreased by 0.6% from May to June following a 1.2% decrease from April to May. In fact, June Services PMI came in nearly 5.5% below the 12-month average of 60.8, becoming the lowest reading since February 2021. Not every indicator provides a reason to panic, as ISM noted that no service sectors faced a decline in the month of June. In fact, several supply chain-related sectors, including Transportation & Warehousing as well as Accommodation & Food Services saw serious growth this past month. For more reading,  US PMI Data Show Demand For Goods And Services Falling In June and US: ISM Services PMI Declines To 55.3 In June Vs. 54.5 Expected.

Railroad Union Strike Heats Up. Railroad companies and their union workers have been stuck in a stalemate since January 2020 over contract negotiations, specifically with regards to health care benefits and wages, among other sticking points. Recently, things have come to a boiling point. With a proposed mass strike by 12 rail unions on July 18th, and the National Mediation Board unable to make headway in negotiations, US consumers and the economy could be dealt a huge blow in disruptions to freight supply chains. As a result, the US Chamber of Commerce is turning to Biden to step in and resolve the dispute. You can read the full letter here, POTUS Letter on Railroad Labor Negotiations. We also recommend checking out the Decision By The National Mediation Board. 

US Manufacturers Are Moving More Production From China to the US. With COVID-related supply chain disruptions still wreaking havoc, many US CEOs are opting to ramp up domestic production rather than overseas. Possibly triggered by the latest lockdown in China, CEOs are using the terms onshoring, nearshoring, and reshoring at a faster pace than the first six months of the pandemic. More concretely, the construction of new US manufacturing facilities is up 116% over the past year. The trend can be seen in big players' strategies such as Intel’s new facility in Phoenix, and US Steel’s facility in Arkansas. Smaller players are following suit as well - a recent UBS survey of CEOs found that more than 90% said they’re in the process of or plan to move production out of China. Demand For US Manufactured Goods Also Increased More Than Expected In May. That said, higher power costs due to soaring natural gas and electricity prices Pose A Major Threat To Industrial Production.

Are eCargo Bikes The Future Of Last-Mile Delivery? Amazon is piloting a new fleet of eCargo bikes and delivery staff in London, UK which are intended to replace its London delivery vans. According to Amazon, the integration of the delivery vans with the eCargo bikes will enable the firm to make more than 5M last-mile deliveries in central London. These “tiny mail trucks” are faster than vans in urban metropolitan areas and cut emissions by 90% compared to diesel vans. According to the World Economic Forum, there will be 36% more delivery vehicles in urban centers by 2030. For more information, read Large-Tired And Tested: How Europe’s Cargo Bike Roll-Out Is Delivering. In other news, Volvo Group Venture Capital Invests In Optibus.

Walmart GoLocal Pushes Deeper Into Food Delivery With Local Express. Walmart plans to expand its current delivery service known as GoLocal with a new partnership with eComm brand Local Express. Currently, Local Express services individual bakeries, butchers, delis, etc.. that are local favorites. Now, with this new union, Local Express customers can now seamlessly get fast, reliable delivery of various local products in combination with Walmart’s direct GoLocal services. The delivery market is expected to explode from $8.7 B to $15.6B in 2025 and convenient and fast delivery is only growing in demand. For further reading on the implications of this partnership, read how Local Express To Offer Delivery For Specialty Food And Beverage Retailers Through Walmart GoLocal.

🌟Amazon Cancels, Delays Wave Of Warehouse Plans As eComm Demand Cools. Following a rather tumultuous Q1 earnings report, Amazon has reportedly delayed over a dozen facilities that were meant to begin operations this year. After having doubled its operations capacity in order to fulfill COVID-related needs, Amazon is now being forced to slow down and try to avoid incurring further labor costs. For the most part, many of the Amazon facilities affected are simply being delayed by a year, to wait till Amazon is forced to expand its network to meet demand. However, many significant plans in states such as Texas, Wisconsin, and even California have been completely withdrawn due to high labor costs. For further reading on Amazon, consider Amazon Cancels Or Delays Plans For At Least 16 Warehouses This Year. 

Mobility 🚗

🌟The Road To Normality Remains Long, Windy, And Bumpy For Airports.  Although the onset of the pandemic was more than two years ago, and many people have resumed travel both domestically and internationally, airports are still not back to their full strength. While many have “stress tests” for short-term events, the notion of closed borders and halted travel was never in the playbook. As a result, the global recovery has remained uneven. The new paradigm is forcing many airports to reimagine their investment strategy and diversify revenue streams, with some looking to expand cargo operations, and others embracing new technologies to manage labor shortages. This will mean Continued Disruption Of Tourism In European Markets many of which largely depends on the annual flow of summer vacationers. In the US Long Beach Airport Is Leading The Pack with passengers up 2.3K% since May 2020.

Electric RV Makers Have Their Sights Set On Millennials. According to the RV Industry Association, RVing and Camping is a $140B market and electric RV makers are looking to capitalize. Big players such as Thor Industries, Winnebago, Iridum, and Forest River are shifting focus to a new consumer segment consisting of millennials aged 33-41, with an average annual income of $90K. Concept vehicles give a glimpse into what the future of RVing can look like: lithium-ion battery packs, solar panels, and the freedom to set up camp anywhere there’s a charger. Electric RVs have different power requirements than the typical EV, so there are still infrastructure gaps to overcome, but players such as Rivian Are Already On The Move On That Front. In related news, Tesla Plans To Open Up Its Power Network To All EV Owners.

Sealgliders Might Be Closer To Fruition Than You Think. In coastal locations, like Hawaii, electric sea gliders may soon be a viable form of short-distance transportation. Billy Thalheimer, CEO of sea glider startup Regen, has called electric aviation “the next space race.” And with a multitude of innovations including better battery life, lighter materials, and retractable hydrofoils, you might be opting for a ride on a sea glider instead of a ferry very soon. The planes are meant to leverage small propellers and batteries to glide over smooth seas and it’s expected that future aircraft could be able to travel up to 500 miles. In other news, New Regulation Is Requiring Some Buildings To Provide EV Chargers and Hyundai And Michellin Have Teamed Up For EV Tire R&D.

Toyota Has Crossed The 200K EV Sales Threshold, Phasing Out A Key US Tax Incentive. Toyota Motors announced this week that its second-quarter sales of EVs topped 200K triggering a phase-out of a $7.5K tax credit for consumers, joining the likes of Tesla and GM. The phase-out is said to begin on October 1st and be finished by the end of the month. Given the recent ramp-up of the all-new BZ4X, the timing is somewhat inopportune. However, opponents of the tax credit have long argued that the credits have largely benefited the wealthy and that the government shouldn’t subsidize the purchases of consumers. Nissan And Ford Are Said To Soon Be Following Suit. If you’re in the market for an EV, take note that the Average Price Has Now Surpassed $60K. 

Rivian Is Full Steam Ahead. This week, Rivian announced Q2 production figures, boasting a whopping 4.4K EVs made. This marks a sizable increase from Q1 production figures of 2.6K. The company has reiterated that it’s on track to hit its goal of 25K cars made by year-end, requiring 9K units for both Q3 and Q4. Amid increased pressure from rivals such as Ford, GM, and Tesla, it’s yet to be determined whose EV sales growth will come out on top by year-end. In other news, GM Is Ramping Up Production Of An Electric Hummer and EV Battery Materials Are Still In Short Supply. 

More Than A 3rd Of Americans Are Willing To Buy An EV. According to the latest and largest-ever nationally representative survey from Consumer Reports, more Americans are ready to make the switch from gas to electric. The survey of 8K adults found that most were unaware of state and federal tax incentives to be EV owners, and differences in racial, ethnic, and income groups around EV perception. The results say that 14% of adults are definitely willing to purchase an EV, a marked increase of 4% in 2020 from a similar survey. Other data also shows that this Consumer Trend Existed Before The Increase In Gas Prices. The City of Detroit is also piloting a $1.9M Experiment With Inductive EV Charging. 

VW Ponders Pay-As-You-Go Autonomous Driving. Most automobile manufacturers see software as a paramount feature of the future driver’s experience. At VW, the push to innovate in that space lies within its newest technology division, Cariad. In a recent interview with Bloomberg, Cariad CEO Dirk Hilgenberg stated “There’s a new business model already out there — a subscription model, or function-on-demand — where the AI will tell you, you can drive autonomously if you want, for the next 50 miles. We would support that. We could give you autonomous driving for the next 50 miles, so you can relax or sleep or do whatever.” In related news, Hyundai’s Creep Up The EV Charts Continues And Is Getting Noticed. In addition, Vietnamese automaker VinFast has also Announced Plans To Open 30 California Showrooms.

Fundraises and M&A 💸

Octopus Raises $5M Seed. The Jakarta-based startup built a platform that makes it easier to collect waste products from consumers and recycle them into raw materials that brands can reuse. The round was led by Openspace and SOSV. The funds will help Octopus rapidly expand sorting facilities and 1.7K checkpoints.

Adaptive Raises $6.5M Seed. Adaptive is an 11-month construction and fintech startup that has raised $6.5mm through its seed round led by Andreesen Horowitz. They aim to provide diverse construction teams with better tools to manage their back offices. The round was led by A16Z and saw participation from 3KVC, BoxGroup, Exponent, and Definition.

McEasy Raises $6.5M In Series A Funding. The startup is based in Indonesia and develops SaaS solutions, such as software and smart tracking, for the logistics and supply chain industry. The round was led by East Ventures. The added funds will support product development and further expansion into the region.

Supy Raises $8M In Seed Funding. Supy builds tech that allows businesses in the hospitality sector to optimize their ordering and supply-chain processes. The round was led by BECO Capital and included follow-on investments from Valia Ventures, Cotu Ventures, Global Ventures, and AMK Investment Office. The funds will be used for product development and to grow its customer base.

Fyto Raises $15M In Series A Funding. Fyto develops hardware and software systems that automate the production process for nutritious aquatic plants which enables farmers to improve their nutrient management and productivity while reducing costs, water usage, and emissions. GV led the funding round and was joined by AgFunder, Refactor Capital, First Star Ventures, and Bolt. The funds will be used to scale production.

Logiwa Raises $16.4M In Series B . Logiwa is the leading cloud fulfillment platform for high-volume DTC and omnichannel businesses. The round was led by NewRoad Capital Partners and included follow-on participation from Valor Siren Ventures, Runway Venture Partners, Spider Capital, and Launch Capital. 

Traba Raises $20M Series A. Traba is building an on-demand marketplace for fulfillment and warehouse workers that connects workers with open shifts at warehouses, fulfillment centers, and event venues. Khosla Ventures led the round with participation from Founders Fund, SciFi VC, General Catalyst, and Atomic. The funds will be used towards expansion into Texas and the remainder of Florida. 

001h Raises €25M In Series A. 011h is a next-gen building platform that wants to lead the way to a sustainable built environment. The round was led by Redalphine and included Seaya Andromeda, Breega, and Aldea Ventures. “The funding will help it to develop its digital platform and building system, as well as grow its team and strengthen its network of partners.”

DEUNA Raises $30M in Series A Funding. DEUNA is a Silicon Valley and Mexico City-based one-click eComm startup. Activant Capital led the round and was joined by Valor Capital, Abstract Ventures, Acrew Capital, and Upload Ventures. The new funds will be put towards growing the team, product development, and expansion into LatAm.

Flexe Raises $119M In Series D Funding. Flexe is a Seattle-based programmatic logistics company that offers on-demand warehousing space for online retailers. Its funds and accounts are managed by BlackRock, Activate Capital, Madrona Ventures, T-Rowe Price, and Tiger Global. The latest fundraising round saw the company achieve unicorn status.

VulcanForms Raises $355M. The MIT-born firm helps “manufacturers shift away from overseas manufacturing with the use of metal additive manufacturing.” The round included investment from Eclipse Ventures, Stata Venture Partners, Fontinalis Partners, D1 Capital Partners, Standard Investments, Atlas Innovate, Boston Seed Capital, Industry Ventures, and the Simkins Family. The fundraised amount will support facility expansion.

Northvolt Lands $1.1B. “​​Stockholm-based sustainable lithium-ion battery maker Northvolt announced the signing of a $1.1B convertible note, almost exactly a year after announcing $2.75B in equity funding.” Participating investors include VW Group, Baillie Gifford, Ava Investors, Fondaco Growth, and Folksam Group among others. The funds will be used to expand into Europe.

routeBank Acquired By Netcetera For Undisclosed Amount. Netcetera provides customers with IT services and digital products for a wide range of industries. This acquisition sees the company move into the travel and mobility vertical. routeBank’s platform will give Netcetera access to its different tools including multimodal route planning from door to door, the provision of travel information, and ticketing.

Emiza Acquires Shippigo For Undisclosed Amount. Emiza, a 3PL to more than 150 D2C and B2B brands across India, acquired Shippigo, a “shipping solution that helps eComm companies integrate their shopping carts, import shipping details, and process shipments to the end customers.” The acquisition will see Shippigo’s tech integrated into Emiza’s platform to further streamline the supply chain processes for customers.

Miner Acquires New Jersey Door Works For Undisclosed Amount. New Jersey Door Works is a leading commercial dock and door company based in NY.  “This acquisition supports the continued expansion of Miner’s footprint, now serving most major markets nationwide.”

Business Building 🛠️

North Star Product Metrics. Snyk’s VP of Product, Brian Williams discusses a variety of product-related topics. I would draw attention to North Star Metrics, Habit Moments, and Free to Paid.

Think About Valuation. While this piece isn’t directly discussing supply chain companies, it does raise the broader issue around valuation when startups make that flip to growth or public markets. The TLDR is that not all businesses are created equally nor are they all destined to trade like SaaS (recurring revenue with high gross margins). Tying it to supply chain, a Gross/Net Revenue model won’t get 8-10x multiples but instead something closer to 1-2x Gross Sales or 10-12x EBITDA.

Commandments for Scaling Startups. Something Founders hear from the team at Dynamo during our check-ins… “If you personally want to grow as fast as your company, you have to give away your job every couple of months.” This point is especially important and relevant whether you’re small or large because it supports a suboptimal environment and hinders excellence, “You have to pounce on any bad habits that could become part of your company's DNA. Whatever your company looks like at this stage is how it will be, floor to ceiling, when you're older and bigger.” 

Who's Hiring? 👩‍💻

Industry Relations Analyst at Verusen in Atlanta, GA (remote ok).

Sales Account Executive at Forwardize in Berlin, Germany.

Marketing Manager at Tangram Vision in Boulder, CO (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.