Dynamo Dispatch (11/04/19)

Issue 83 | Choco, Greensill, Twiga

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 💭

It was a busy week in supply chain and mobility this week with a lion share of the reported fundraising activity occurring overseas. Dynamo has invested about a third of its capital internationally with a heavy concentration in Europe. Market movements are timely as our London-based Partner, Jon riffed with Santosh on The Future of Supply Chain this week - listen to Jon’s personal story, experience with startup ecosystems, and what he looks for in founding teams.

Also, we’re looking for our next Venture Fellow. This six-month program that begins in January will give somebody an opportunity to learn about venture capital and startups. Our Fellows are do-ers and work on all facets of fund management joining an active group that has made four investments to date (with several in the hopper).

Have a great week!

We Are Dynamo,

Santosh, Ted, Barry, and Jon

Note: please add “dynamo@substack.com” to your email client so you don’t miss future issues due to aggressive spam filters.

Supply Chain 📦

Uber Freight Announces Canada and Cross-Border Expansion. This international expansion adds to Uber Freight’s existing international presence in the Netherlands, Germany, and Poland. Canada is the United States’ second-largest trading partner, and this represents an opportunity to move a portion of the $617B worth of goods that cross the border annually. Speaking of cross-border, Forager Launches Scout: Cross-Border Freight Pricing and Booking.

🌟 Grubhub on Demand and Unit Economics in Food Delivery. In a letter to shareholders, Grubhub explained key elements of its business model and how it provides a strategic edge in the $200B market. The company noted delivery drones and robots may reduce the cost of fulfillment, but it will be a long time before the capital costs outweigh the cost of paying someone for 30-45 minutes of their time. Grubhub is currently the only profitable model operating at scale in the United States.Related, Uber Eats Hopes Drones Can Lift It to Profitability while McDonald’s UK Says Delivery Accounts for 10% of Sales.

Walmart's Last Mile Around the World. Walmart is using diversified last-mile solutions ranging from cars to bikes to drones depending on geographic differences. In Japan, the company ran a three-month pilot in partnership with Rakuten to deliver to a tourist island in the Tokyo bay using drones. The company is showcasing its agility in orchestrating its supply chains with different partners and modes as close as Canada and as far as Japan. ICYMI, Dynamo portfolio company, Gatik AI is Working with Walmart.

50% of Procurement Organizations Use Excel Spreadsheets to Store Their DataIt turns out that procurement departments are falling behind the curve relative to other supply chain functions because of incentives and focus on cost management. It turns out that investment in data and process management could help them better manage input pricings, inventory levels, and balance sheet impact.

📊 Food Supply Chain Mapped Out. It’s interesting to note that the US food supply chain is dominated by counties in Southern California (authors note data might have some bias due to drought) with transport itself occurring via truck, train, and barge. Speaking of food, Amazon Makes Grocery Delivery Free for Prime Members.

Surge Robots Alleviate Holiday Hiring Rush. Retail warehouse operations are turning to robotics to help seasonal workers cope with the expected flood of online orders. Case-in-point, Geodis is boosting robotics workforce by 75% as it approaches holiday season. Speaking of warehouses, Dynamo portfolio company,  Plus One Robotics Opens New Facility at Port San Antonio while Cushman & Wakefield Note that 75% of New Industrial Builds Are For Warehousing/Distribution.

Waymo Begins B2B Car Parts Delivery Trial. Waymo in the supply chain section? Self-driving vehicle technology company Waymo has expanded its business relationship with automotive retail company AutoNation. Building on last year’s partnership with AutoNation, this new agreement is an opportunity for Waymo to accumulate valuable testing data on repeated routes. Related, Delta Becomes First US Airline to Offer Door-To-Door Time-Critical Deliveries

Maersk Partners with Global Companies to Trial Biofuel. In partnership with FrieslandCampina, Heineken, Philips, DSM, Shell and Unilever, Maersk continues to bolster efforts to deploy carbon-neutral vessels by 2030. Spreading out R&D costs will accelerate the utilization of Biofuels as a near-term solution and foster collaboration on long-term supply chain sustainability solutions.

Mobility 🚗

Sidewalk Labs Will Move Forward with Toronto Project. Amidst public outcry, Sidewalk Labs will continue its 12-acre project in Toronto’s Quayside district. A major point of contention, the agreement between Sidewalk and the city doesn’t define what’s going to be done with the data the company collects about the residents and visitors. This project is the essence of the ongoing battle between efficient and sustainable urban communities and privacy concerns. 

Tesla May Supply Batteries and Drivetrains for Fiat-Chrysler. In the approval of Peugeot and FCA’s proposed merger, FCA’s CEO commented a large-scale electrification initiative will indeed happen. FCA sees a valuable ally in one well-versed with EV technology, Tesla.   It would not be a surprise given Tesla’s mentality about proliferating EV technology and thus adoption. Related, Electric Vehicles Now Outsell Cars with Manual Transmissions in the US.

📊Breaking Down the Daily Commute. Dynamo portfolio company led a whitepaper effort to study the opportunity in building mobility solutions for 68% of Brits who spend over 50 minutes to commute to work each day in their car. 

Drivers Killed the Most Pedestrians and Bicyclists in Almost 30 Years. Despite a 2.4% overall decrease in US roadway fatalities last year, the number of pedestrians killed increased by 3.4%. Particularly, the number of female cyclists killed shot up 29.2%. While technological distractions and intoxication are partly to blame, urban planners note there needs to be a continued focus on sidewalks, ramps, crosswalk improvements, and bike lanes. Related, It’s Getting Riskier to Walk and Bike After Dark.

🌟VW Separates Autonomous Efforts into VW Autonomy. The subsidiary is focused on Level-4 robotaxis which it plans to deploy in three continents by 2025. The first project will be an autonomous minibus and cargo transport vehicle, the ID Buzz built in partnership with VW’s commercial vehicle brand. VW other efforts include a $2.6B investment in Argo AI, a $91B commitment to EVs, and a partnership with Mobileye in Israel to launch a self-driving service. As a public company, this could be financial engineering that helps shine a light on what might be an otherwise overlooked business.  

Uber Pushes into Financial Services with Uber Money. Uber launched a new division focused on financial services that will include bank accounts for its 4M+ drivers that promise immediate payment from rides and a relaunch of its consumer-facing credit card. As a growing trend, startups are moving towards financial ecosystems to entrench customers in their platforms. Related, Can Mobility Services Ever Be Profitable?

📊 When Both Drivers Are in Error, People Blame the Human One More. Awad and colleagues constructed a series of scenarios describing ADAS-enabled cars killing pedestrians, with varying levels of driver involvement. In exploring how people appoint blame, tests concluded that people are more likely to blame the human party more despite the level of autonomy the vehicle possesses. Related, Six Cars Aced New Pedestrian Detection Tests.

Congress Drafts Initial Version of AV Bill. The hope is that this bill will provide a federal framework that can address the gaps and uncertainty as it relates to autonomy. A set of regulatory guidelines would help stakeholders deliver safe and efficient AV services.

Fundraises, M&A, Talent 💸

Greensill Capital Raises $655M Led by Softbank’s Vision Fund. Greensill is a London-based company democratizing capital by providing “supply chain finance”. The company will use the funds to focus on key acquisitions.

Elasticrun Raises $40M Led by Prosus Ventures. ElasticRun is an Indian logistics company focused on mom-and-pop stores. Prosus Ventures led, and was joined by return backers Avataar Ventures and Kalaari Capital.

Choco Raises $33.5M Led by Bessemer Venture Partners. Choco is a wholesale food delivery app for restaurants to source from suppliers. The company has yet to monetize as it continues to burn capital to build out its networks.

Green Rabbit Secures $31M Led by Guidepost Growth Equity. Green Rabbit is a New England-based provider of cold chain e-commerce logistics for the food industry. This investment is the first institutional capital the company’s received.

Twiga Foods Raises $30M Led by Goldman. Twiga Foods is a Kenyan, B2B food distribution platform. The funds will be used to set up a distribution center in Nairobi and expand its offering of supply chain services to both agricultural and FMCG products.

Duffel Raises $30M Led by Index Ventures. London-based Duffel is a platform that connects travel agencies with airline reservation systems. The company will use the funds to hire more engineers and expand its footprint.

Fountain Raises $23M Led by DCM. Fountain is a SF-based automated platform to find and screen candidates for gig and hourly jobs. The company, whose primary customers are Uber and Postmates, will expand its line of service offerings and geographical footprint.

CelLink Raises $22.5M from RBVC, Ford, and BMW. California-based CelLink produces flexible electric circuit technology for auto and energy applications. The capital will be used to fill orders across the company’s primary offerings of vehicle wiring, battery pack interconnects, and LED lighting.

Airlift Technologies Raises $12M Led by First Round Capital. The round is the largest Series A ever raised by a Pakistani startup. Airlift enables users to book rides on premium coaches between stops in Karachi and Lahore. This is the first time that a U.S.-based VC has led a round in Pakistan, and also marks one of the largest raises in South Asia in 2019.

Tactile Mobility Raises $9M Led by Porsche and Union Tech Ventures. Tactile Mobility is an Israel-based virtual sensing startup for autonomous vehicles. The company’s technology analyzes tactile sensor data to get a feel of the road.

Link3d Raises $7M Led by AI Capital. Link3D is a Boulder-based provider of additive manufacturing execution system workflow software. Funds will be used for R&D around AI tools, as well as expanding sales and customer success operations.

Crewdible Closes $1.5M from Global Founders. Crewdible is a microwarehousing startup for eCommerce merchants that uses empty facilities such as houses, offices, and warehouses for fulfillment.

Prologis to Buy Liberty Property in $9.7 Billion Stock Deal. The warehousing market continues its hot streak after Blackstone’s $5.9B acquisition of Colony Capital last month. As proximity-optimized infrastructure continues to see increasing demand, Prologis’ acquisition of this 107M ft2 logistics property portfolio shows it is doubling down.

Peugeot and Fiat Chrysler Accelerate Merger Talks. The two automakers are set to join in a true 50-50 merger, with a deal on $50B agreement set to come this month. This new entity would be the world’s fourth-largest automaker, enabling the group to tackle the ongoing industry disruption head-on.

Company Building 🛠️

🎧Recode Decode: Ben Horowitz. Horowitz discusses company culture, diversity, and shares some perspective on VC.

16 Non-Obvious Fundraising Lessons. This is a must-read for founders raising money (be it a seed, A, or B). I especially vibe with: understand VC psychology, take notes, and know when you’re not improving.

Peanut Butter Memo: Focus & Accountability. Former Yahoo SVP Brad Garlinghouse on focusing more on fewer efforts and having clearer accountability.

Who's Hiring? 👩‍💻

Customer Success Lead at LEAF Logistics in New York, NY.

DevOps Engineer at SVT Robotics in Norfolk, VA.

Head of Business Development at Gatik AI in Palo Alto, 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.