Dynamo Dispatch (11/18/19)

Issue 85 | Convoy, isee, DroneDeploy

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 💭

Jon did a live session of For Freight’s Sake with Craig at FreightWaves Live last week. Check it out if you haven’t already… new episodes released weekly!

We’re in someone’s (maybe your) background this week so give us a shout if you want to talk supply chain and mobility.

  • Santosh is in NYC from 11/20 to 11/22

  • Jon is in Zagreb on 11/18 to 11/19, Tallin on 11/20, and in Helsinki to close out at Slush on 11/21 to 11/22

By the way, if you’re graduating this December, our Venture Fellow opportunity could be a fit. Check it out.

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 📦

FreightWaves LIVE Roundup: Bloomberg on Trucking, China and Trump, and More, Digital Disruption Will Speed-up Supply Chains, Telling the Stories of Truck Drivers.

Why Mercedes’s Self-Driving Trucks Are Set to Overtake Its Robotaxis. In realizing that automating the urban segment of driving is the most challenging bit, Daimler has shifted its focus to trucks—which spend 90% of their time on freeways. The company’s roadmap is to scale from driverless trucks, to robotaxis (operating within geofence), and eventually to passenger vehicles. Continuing on trucking technology, Commercial Vehicle Fleets Poised to Boost Tech Budgets in 2020.

📊Cass Freight Index Report on the Slumping Freight Market. For October, shipments declined 3.9% and expenditures were down 1.9%. Continued weakness in the spot market is being attributed as the main factor in the decline. Going on 11 consecutive months of annual shipment declines, the report noted this signals a full-blown contraction in the industry. Crossborder data is also soft as Panjiva Reports on the Decline of U.S. Imports.

🌟How a Tiny Town Became a Hub in Amazon’s Supply Chain. This piece tells the story of Amazon’s growing industry of prep centers with a lens on the remote town of Roundup, Montana. Prep centers are facilities that exist to package goods sold by third-party merchants on Amazon. Prep centers, tax-free zones, rural job scarcity, automated software, and Amazon’s logistics network have powered a massive market of new-age global arbitrage. Speaking of eCommerce, Singles Day Sales Hit a Record High.

📊Foodservice Distribution Drivers Outearn Other Truckers. According to an IFDA survey, foodservice delivery drivers average annual gross wages of $67,291 compared to $45,570 for tractor-trailer truck drivers. This disparity could exist due to a few reasons: 1) the food distribution industry seems to be ahead of the pay curve to stem churn of their workforce and 2) handling food tends to be more complex and therefore higher-value work. 

UPS Launch of Flat-Rate Parcel Service Puts the Squeeze on FedEx. UPS is offering a flat-rate option on parcel less than 50 lbs. The angle is to remove friction from the buying decision for small and medium-sized shippers ahead of peak season. This is part of an ongoing battle between UPS and FedEx around different pricing strategies, from geographic tiering to cost structure simplifications. 

CH Robinson Launches Freightquote. Freightquote will enable small businesses to streamline the booking of shipments across multiple modes. As part of its plan for investing $1B in technology over the next five years, CH Robinson is capturing more SME business by automating this service. In product-related headlines, check out SONAR 5.0, Profile on PayCargo, and Next Trucking Expands App with Drayage.

UPS Creates Digital Tools to Deliver Blockchain-Verified Beef. UPS developed a specific integration with HerdX to deliver and offer provenance information to diners at the shipment’s destination, a steakhouse in Japan. UPS joined the Blockchain in Transportation Alliance in 2017, but this event marks the company’s first real use case of its proprietary technology in the field. ICYMI, CSX Joins Maersk Blockchain Platform and Walmart Canada Launches Blockchain Solution to Track Deliveries

Mobility 🚗

Uber CEO Discusses Profitability and Autonomous Vehicles. In an interview with Axios’ Dan Primack, Dara Khosrowshahi responded to pressure around profitability and the future of Uber. Khosrowshahi says, “what we have to do is continue to invest in technologies that get multiple people in a car, continue to invest in and help invest in the electrification of the fleet, and build out alternative modes of transportation: electric bikes, scooters, transit." He also made mention of creating their own licenses to allow different AV developers to drive on the Uber network. More on Uber’s plans, New Technology to Raise the Bar on Safety.

🌟VW Breaks Ground on Massive Tennessee EV Plant. The $800M 564K sqft expansion will set up the production lines for two different electric vehicles. The project will also include building a new 198K sqft plant for the assembly of battery packs. VW plans to sell 150K EVs in total by 2020, but vehicles won’t come off the lines in Chattanooga until 2022. While Honda Stays Realistic on EVs and AVs and Tesla Picks Germany for European Gigafactory. Also, Tesla to Reveal CYBRTRK Pickup Truck Nov 21.

📊On-Demand Transit Can Unlock Urban Mobility. New research from BCG, using Via's data in four cities, explains how on-demand micro-transit services complement mass transit. The additional network can reduce traffic by 15-30%, cut CO2 emissions in half, and provide equity in access to job opportunities. In Via’s case, the service gave riders more trip flexibility while lowering per-passenger cost compared to traditional fixed-route transit. 

📊95% of Drivers Will Use Voice Assistant in the Next Three Years. Capgemini’s report surveyed 7,000 people with key findings that include: 49% of consumers already use voice assistants in their vehicles, 77% use voice to play music and check directions, 45% order specific services such as food. Additionally, over a third of the people surveyed said they would be willing to pay a premium or monthly subscription price for a voice subscription installed in their car. All of these figures are expected to grow by 30% over the next few years.

Micromobility’s Next Big Opportunities. The initial wave of platforms for shared bikes and scooters has settled and consolidated. The industry is now recalibrating around improving unit economics by solving battery problems and creating software ecosystems for aggregate mobility services. As the potential for mobility as a software hub becomes more evident, bigger players like Google and Apple will likely enter the space. Elsewhere in Micromobilityland, Lyft Is Ceasing Scooter Operations in Six Cities and Laying off 20 Employees while NYC Plans to Build More Than 250 New Bike Lanes

The Best and Worst US Airports of 2019. More than 2,500 participants were surveyed on their likes and dislikes at airports they’ve used within the past two years. The questions are built on measures that reflect reliability, value, and convenience. To nobody’s surprise, JFK and Newark sit at the bottom of the list. Some of the newer airports benefit from more efficient floorplans and more abundant taxiways, runways, and gates; however, most large airports are constrained by the will of their local dominant airline.

Velodyne Lidar Debuts the Most Advanced Lidar Sensor on the Market. This next-generation sensor used by Voyage Auto offers improvements to the vertical field of view, dynamic lighting performance, and power efficiency. The technology has obvious self-driving applications, but some of the improvements enable better indoor performance for industrial robotics uses. Speaking of new hardware, The World’s First Electric Crate Motor.

Fundraises, M&A, Talent 💸

Convoy Raises $400M Co-Led by Generation Investment Management and T. Rowe Price. This latest round values the company at $2.75B. Convoy now handles tens of thousands of loads per week and still sees plenty of room for growth provided 90% of heavy trucking is still booked through traditional methods. 

XPeng Motors Raises $400M, Takes on Xiaomi as Strategic Investor. The Chinese electric vehicle startup began deliveries of its first production model, the G3 2019 SUV, in December and shipped 10,000 models by mid-June. The company prepares to launch its electric P7 sedan in spring 2020.

Tuhu Raises $400M Led by Tencent. Tuhu is a Chinese automobile after-market product and services provider. Its platform processes orders for tire changes, car washes, parts installation and other maintenance services that are filled by partner shops in more than 200 Chinese cities.

Frontier Car Group To Raise $400M Led by OLX Group. Frontier Car Group is a Berlin-based startup building used car marketplaces for high-growth, emerging markets. Frontier sold about $700M worth of cars LTM, triple the figure from a year before.

Doordash Raises $100M Led by T. Rowe Price. T. Rowe Price joins SoftBank and Sequoia with this recent infusion. The investment comes on top of a $600M round announced in May led by Darsana Capital Partners. Doordash is currently the largest food delivery player in the US, accounting for about 35% of the market share.

Voi Raises $85M From Balderton Capital and Others. Voi is a Stockholm-based escooter operator with a presence in 38 cities across 10 European countries. Participants in this latest round also include Creandum, Project A, JME Ventures, Raine Ventures, Kreos Capital, Inbox Capital, Rider Global, and Black Ice Capital. 

Orbital Insight Raises $50M Co-Led by Sequoia and Clearvision Ventures. This new infusion is earmarked to accelerate the development and expansion of the company’s software solution, Orbital Insight GO. The solution provides analytics to improve profitability, operations, and policies with geospatial applications. Supply chain monitoring is one of the targeted verticals.

DroneDeploy Raises $35M Led by Bessemer Venture Partners. DroneDeploy is an SF-based startup developing a holistic cloud-based drone mapping and analytics platform. The company says its customer base now totals 5,000 companies at more than 400,000 job sites.

Trukker Raises $23M Led by STV. Trukker isa Dubai-based digital freight brokerage. Trukker expects to expand into Egypt before year-end, as it fortifies its market share against competitor LoadMe. STV was joined by IFC, Endeavor Catalyst Fund, MEVP, Riyad TAQNIA Fund, Oman Tech Fund, Iliad Partners, and Shorooq Ventures.

JetPack Aviation Raises $2M From Tim Draper, YC, and Cathexis. The company’s flying motorcycle, “The Speeder,” will be able to take off and land vertically and reach top speeds of potentially over 400 MPH. The company’s positioning is based on the idea the Speeder has more near-term viability than other VTOL designs since it will rely on turbine propulsion.

isee Raises $15M Led by Founders Fund. isee is a Massachussets-based autonomous trucking startup. Founders Fund partner Scott Nolan explained the investment decision saying, "the other self-driving companies out there were operating with the same tech stack and weren't differentiated at all. They are all using the same sensors, the same data sets, and the same approaches to collecting that data." 

Loop Returns Raises $10M Led by FirstMark Capital. Loop sits on top of Shopify to manage the returns process. The company’s thesis is that brands overlook the opportunity to build customer loyalty with transparent and convenient returns. Loop has more than 200 customers and is working with brands like Brooklinen, Allbirds, and PuraVida.

Mapxus Raises $3M Led by Beyond Ventures. Mapxus is a Hong Kong-based indoor mapping technology startup that uses multi-sensing, positioning, and AI to service the private sector, public sector, and various social enterprises. The company plans to use the funds to continue product R&D and expand its sales effort.

Hyundai Wins $1.7 Billion Bid for Asiana Airlines Stake. Asiana Airlines, South Korea’s number 2 carrier, is saddled with $8.3B in debt as it battles falling tourism traffic to Japan. The airline’s top shareholder, Kumho Industrial, put its 31% stake up for sale earlier this year as it came under pressure to reduce debt at the loss-generating carrier. 

8VC Appoints Justin Hall to Executive in Residence. Justin Hall joins 8VC after leaving his role as YRC’s Chief Customer Officer in June. Hall will work directly with 8VC founding partner Jake Medwell to help oversee the firm’s freight tech investments. He will assist with vision, business development, hiring and other areas.

Company Building 🛠️

Building an Investor Pipeline. Jenny Fielding of Techstars helps founders understand the importance of researching and tracking relevant investors and shares a practical approach she uses with her investments.

Customer Segmentation 101. “For a technology company moving from the startup stage to the expansion stage, that often means abandoning a non-discriminatory, ‘take every customer we can get’ approach, and replacing it with a far more targeted, best current customer segment strategy.”

Can SaaS Businesses Turn into Marketplaces?. Casey Winters of Eventbrite discusses the difficulties of transitioning a SaaS business into a marketplace and offers some suggestions in blazing a path. In the supply chain, we’ve seen the inverse of this trend where a business has workflow software and it’s looking to go deeper with SaaS offerings (ex: dock scheduling or workforce management) or expand the nature of transactions (ex: sell fuel or pallets).

Who's Hiring? 👩‍💻

AI Software Engineer at Plus One Robotics in San Antonio, TX.

People and Culture Ops Lead at WorkHound in Chattanooga, TN.

Full-Stack Developer at Vector AI in London, England.

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.