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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🎙 Check out Dynamo's podcast series, The Future of Supply Chain.
Weekly Commentary 💭
We’re back and rolling into year-end. We’ve been spending a lot of time with founders inside and outside our portfolio thinking about 2020. Specifically, we’re happy to offer perspective around product, sales, talent, and fundraising plans. Reach out if you need a helpful “ear” - hello at dynamo dot vc.
We’d be remiss to not acknowledge the Celadon bankruptcy that hit the ticker a couple hours ago. After 34 years, the group will file for Chapter 11 and seek a sale in the coming weeks. For those trucking executives reading, there are about 3,000 drivers looking for work. On the international front, IMO 2020 will go into effect on 1/1/2020 and we’ve heard of surcharges to the tune of $200 (USWC) to $350 (USEC) that are being passed on to customers. Worth noting this further exacerbates an environment where inbound volumes are -8.5% Y/Y.
As you do your holiday errands and prepare for a new year, take a break with Episode #36 of the Future of Supply Chain where Santosh sat with Tom McLeod to discuss his founding story, transportation management systems, and the importance of being customer-centric.
We Are Dynamo,
Santosh, Ted, Barry, and Jon
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Supply Chain 📦
Here Come New York’s Cargo Bikes. The NYC DoT announced a pilot program with UPS, DHL, and Amazon to use cargo bikes for package deliveries in NYC. This allows them to use commercial loading zones as a way to get some trucks off the city’s gridlocked streets, which has resulted in over 471,000 parking violations between UPS and FedEx in the past year. Related, How Big Is the US Final Mile Market?
🌟The Price of Moving Precious Artwork. The global art industry today is worth around $68B and has climbed 10% every year over the last decade. This true white glove process involved the pieces being initially wrapped in acid-free tissue paper, done by skilled workmen wearing gloves, to prevent fingerprints and sweat from smudging the art piece. Plastic wrap serves as another layer before cardboard to prevent percolation of moisture through the tissue paper. These delicate shipments could cost you upwards of $75K. If you haven’t already, check out our Future of Supply Chain episode with Adam Fields of Arta Shipping.
BMW: Driving Zero Emissions Within Its Logistics. BMW has joined the maritime industry’s Getting to Zero Coalition, as the first carmaker in the alliance. In addition to existing sustainability goals of reducing emissions in new European vehicles by at least 50% and reducing the consumption of resources by 45% by 2020, BMW has set forth several logistics-oriented commitments. These include decarbonizing its logistics, continuing to push its sustainability strategy, using resource-friendly production methods, and further developing electric mobility.
Justice Department Updates Drone Policy to Require Cybersecurity Evaluation. The DOJ has made a few key additions to its existing drone guidance published in 2015. The policy “requires components to evaluate UAS acquisitions for cybersecurity risks, guarding against potential threats to the supply chain and DOJ’s networks.” This comes as the department grounded all 800 of its UAVs last month over cybersecurity concerns around the camera footage being recorded. Most importantly, the new additions indicate that the DOJ and FAA will be collaborating on a plan to moderate access to airspace and establish air traffic support.
📊Study: Robotics and Worker Displacement in the Midwest. The number of robots per number of workers has more than doubled in the last 10 years to reach 1.81 robots for every 10,000 workers. The study suggests that robot augmentation could be saving jobs locally, enabling manufacturing to stay in the US and compete with low-wage countries like Mexico. The study concluded that the use of robots has more potential to increase employment, noting there is little evidence the use of robotics will result in widespread job displacement. Overseas, Prologis Expands in China with $3.5B Investment.
90K Packages Disappear Daily. Roughly 15% of all deliveries in urban areas fail to reach customers on the first attempt because of package theft and other issues, like address errors. To mitigate this, couriers including Amazon, UPS, and FedEx are offering solutions ranging from hub lockers to doorbell cameras. Amazon now has over 100 hub Lockers in Manhattan alone. Taking it a step further, Amazon has launched a real-time tracking service so shoppers can arrange to be home when a delivery arrives. In North America, Amazon Tests Cheap Warehouses to Make Cyber Monday Glitch-Free.
Growing Number of Container Ship Fires. Maersk stopped stowing HAZMAT cargo below deck, as well as with other goods considered resistant to fire fighting, as a result of a series of fires including one in 2018 that killed 27 crew members. Earlier this year, the National Cargo Bureau conducted an analysis that discovered 69% of dangerous-goods moved on international cargo ships were mislabeled or improperly handled and had other safety risks. With the number of container fires rapidly escalating, some carriers have announced that they will levy penalties on shippers for mis-declaring cargo.
The Dawn of Electric Trucks. Diesel will remain trucking’s primary fuel for years to come, but manufacturers are positioning themselves for the inevitable future that electric trucks will reign in. Electric trucks currently rely heavily on government grants and incentives to offset higher vehicle costs, caused primarily by the high cost of batteries. Battery prices are steadily decreasing but are still some ways away from matching the price disparity with diesel. “There is a large potential market for electric trucks. The economics of these vehicles is getting better every day. But early adopters are finding there is no one-size-fits-all option,” said Navistar’s COO. More on batteries and what’s next, Battery Prices Fell 87% in 2019 from 2010 Levels but Heavy-Duty Truck Orders Wane as Industrial Demand Declines
Interactive NYC Subway Map. This nifty animated infographic will make you take for granted how easy it is to use the current subway map. The 30-part web-based project illustrates the MTA’s original subway map design, showcasing how graphic design, politics, and geography have evolved and shaped the city over the past 40 years. Most impressively, the primary designer drew the path he perceived in his sketchbook based on riding the length of the train line with his eyes closed. Also, Planners Unveil $173B Vision to ‘Keep Metro ATL Moving’.
🌟When Cities Don’t Accept Cash for Public Services. Following in the footsteps of cashless retail, several cities are extending this trend to public transportation. Houston is planning a $100M overhaul of its payment system, while NY and DC are testing out various programs to cut cash. Proponents attest to the improved security features and elimination of public lines. However, low-income individuals and minority groups face higher barriers to access cashless options. In recent cashless transit developments, TfL announces Apple Pay integration and additional coverage on the Houston Transit Overhaul.
📊Automotive Semiconductors: The New ICE age. This report discusses the transition from engine-focused vehicle development to software-based development, the “Internal Computing Engine.” Automotive semiconductor sales were about $40B in 2019, but this is expected to grow to in excess of $200B by 2040. Driven mainly by the four ACES trends—autonomy, connectivity, electrification, and mobility services—if the industry evolves a similar fashion as smartphones, soon software will become more of a differentiating factor for automakers than what’s under the hood.
GM & LG Ink $2.3B JV to Make Electric-Car Batteries. OEMs are gearing up to spend $225B over the next few years to develop new electric vehicles and are partnering with and investing in battery makers to help provide the power. VW plans to spend $1B on battery production in a joint-venture with a Swedish startup, while Tesla established its massive Gigafactory battery plant in Nevada in partnership with Panasonic. The GM-LG battery factory will have an annual capacity of more than 30 gigawatt-hours, with flexibility for expansion, making it one of the world's largest cell manufacturing plants. On the EV front, China Raises 2025 Electrified-Car Sales Target to About 25%.
Tesla Nears Musk’s ‘Feature-Complete’ Full Self-Driving Suite in Recent Update. To substantiate this claim, Tesla’s FSD would have to independently navigate through city streets, recognize stop signs, traffic lights, and other signage encountered during urban driving. Musk breaks the capabilities down into three distinct segments. Low-speed autonomy is handled by “Summon,” while high-speed is handled by its existing highway ADAS. This new update will fill the gap for moderate speeds, but again, he reiterates that all driving still requires supervision and that while it is unlikely that intervention will be needed, it is still necessary. Also, Alibaba-Backed Startup AutoX Joins Waymo in Applying for Driverless Test Permit in California.
Uber May Offer Courier Services for Retail Business. At a recent event, Khosrowshahi said Uber could extend its food delivery model to essentially every single local retailer in NYC so that anything you want can be delivered in hopefully 30 minutes or less. Uber has been positioning itself for more widespread distribution services with recent M&A activity, including the purchase of a Chilean online grocery provider. More expansions and more setbacks for Uber, as the company just released its “less-than-stellar” US Driver Safety Report.
How Streetlight Data Plugs Cities into the Mobility Revolution. StreetLight Data is helping cities harness the explosion of data being generated by trillions of GPS and cellular data points from numerous sources, including cell phones, sensors placed around smart cities, connected cars, and IoT deployments. This data is processed into actionable insights around traffic patterns for cars, trucks, bikes, scooters, and pedestrians, in a bid to reinvent urban planning. Streetlight Data is empowering urban planners to identify where data is coming from and how they can make sense of it to then intelligently select investments in infrastructure and reduce congestion.
Fundraises, M&A, Talent 💸
Shadowfax Raises $60M Led by Flipkart. Shadowfax is a B2B logistics network that operates in more than 300 cities in India. The company works with neighborhood stores to house inventory hyper-locally. Its network of freelancers delivers a range of goods, including hot food, grocery, and fashion within a kilometer radius.
May Mobility Raises $50M Led by Toyota. May Mobility has 25 autonomous low-speed shuttles spread out between Detroit, Grand Rapids, and Providence. As part of the deal, Toyota has picked the startup as one of its “autonomous driving providers for future open platforms.” The funds will be used to expand its AV shuttle fleet and both engineering and operations staff.
Lightning Systems raises $41M Led by BP Ventures. Lightning Systems designs and manufactures zero-emission, all-electric powertrains for commercial fleets. The company works with fleets to provide electric powertrains sized for the customer’s drive cycle, with a full suite of telematics, analytics and charging solutions to maximize energy efficiency. This recent infusion of capital will be used to ramp up production to fulfill new orders for electric powertrains for Ford & Chevrolet trucks and Lightning Electric city buses.
Flow Raises $37M Led by NEA. Flow provides cross-border eCommerce software for brands and retailers. The company’s platform sits on top of existing eCommerce platforms, enabling the customer to automatically tailor their shopper’s experiences to their location, with local pricing and payment options. Flow also assists in finding partners for international shipping that are timely and affordable.
Advanced Navigation Raises $13M Led by Main Sequence Ventures. The Sydney-based firm is building inertial navigation solutions for robots and driverless cars. Their product line encompasses sea, land, and air applications. Brick & Mortar and In-Q-Tel also participated in the round.
Skyports Raises £5.4M Co-Led by Deutsche Bahn Digital Ventures and Groupe ADP. Skyports is a UK-based urban air mobility infrastructure startup. Specifically, the team is developing take-off and landing infrastructure in tandem with a drone delivery business. Funds will be used said to acquire sites for “passenger and cargo vertiports in cities around the world, including Singapore and Los Angeles.”
RaySecur Raises $3M Seed Led By One Way Ventures. Boston-based Raysecur has developed a 3D real-time scanning technology that can intercept and detect threats in mailrooms. Its technology can detect powders as small as 2% of a teaspoon or a single drop of liquid. While a seeming niche problem, according to RaySecur someone sends a suspicious package containing powder, liquid, or some other kind of hazard at least ten times a day.
Shipium Raises $2M Led by PSL Ventures. The Seattle-based company aims to make two-day fulfillment possible for any online retailer. Although, the team has revealed little about how it will actually go about that. What we know is that co-founder Murray spent nearly two decades at Amazon, most recently running supply chain teams. Brown is also an early Amazon employee, as the co-founders started three days apart from each other in 1999.
Apex.AI Raises an Undisclosed Amount Led by Volvo. The Palo Alto-based startup is creating an automotive-grade version of ROS. Apex.AI has two products. This first aims to provide a set of simple-to-integrate APIs that can give automakers and others access to fully certified autonomous mobility technology. The second is focused on specific elements and components for those looking to make use of specific elements of autonomous technology, including perception, localization and path planning. Hella Ventures and InMotion Ventures also participated in the round.
IKEA Takes a Minority Stake in Optoro. Optoro is a DC-based provider of returns optimization software. Ikea said it would roll out Optoro’s reverse logistics technology to distribution centers, stores and its customer support center in the United States, and was looking to take it to other markets. Optoro has previously raised over $250M in VC funding.
Company Building 🛠️
Grinding. “If given a choice between a flashy operator or a grinder, I will take a grinder every time. It is a much higher percentage bet. It requires faith and patience and the results are sometimes hard to see. But if you look at the results from grinding it out over a long enough time frame, you can see the power of that approach.”
What’s the Deal with Seed Funds Waiting for Traction?. At Dynamo, we like to come in early (what we dub pre-seed or pre-revenue) but we do look for signs of commercial traction even before the product is built. So what does that mean? We want teams to be able to walk us through their customer discovery: point to a pipeline of users and buyers they interact with, articulate the rationale behind key features, explain early hypotheses around pricing and go to market, and ultimately get us comfortable that we can quickly get revenue once the MVP is complete.
🎧Operators: Kelly Wright. Kelly led Tableau from $0 to $1B in ARR and discusses sales culture, how to interview reps, what companies fail at in go-to-market and how she got into sales and scaled Tableau.
Who's Hiring? 👩💻
ML Engineer at Vector AI in London, England.
Marketing Coordinator at Stord in Atlanta, GA.
Director of Operations at Token Transit in San Francisco, CA.
Check out other jobs at Dynamo portfolio companies.
❤️ We would love your support. Please forward to friends and share on social media.
🗞️ If you were forwarded this and found it interesting or helpful, please sign up.
🎙 Check out Dynamo's podcast series, The Future of Supply Chain.