"Tesla on the water" is born! Musk's old department was founded and just raised 500 million
Author|Wang Lei
Editor|In Continent
A whole new "water unicorn" is here.
American electric boat startup Arc Boats has just delivered a limited edition electric boat Arc One, and announced that it has received $70 million, equivalent to 510 million yuan, in the latest Series B financing.
The electric boat startup was founded in early 2021 with the biggest goal of making everything on the water electric and intelligent, and the first electric boat launched is not low at a price of 2.2 million.
Source: Arc Boats
Its strategy is similar to Tesla's, with the first product held high in the early stage, and then gradually penetrated the market. This has something to do with the origins of the founders, whose co-founders worked at Boeing and the chief technology officer also served as chief engineer for Musk's rocket company, SpaceX.
In just two years, Arc's total financing exceeded 100 million US dollars (730 million yuan).
So, this is a "Tesla on the water" story.
01 Investors are stars
At the beginning of 2021, Arc Boats was founded in California, USA, and there were not many people when it was first founded, but fortunately, there were technical bulls. Many of the engineers in the start-up team are from SpaceX, and the official claim that the design of their electric boats is also inspired by aerospace.
In March 2022, Arc released a pre-made version of its first product, the Arc One, an electric boat that is around 7.3 meters long, can seat up to 12 people, can reach up to 500 horsepower, and has a top speed of 40 miles per hour.
Source: Arc Boats
Of course, the most important thing is its large battery pack - 220 kWh, which is three times that of the Model Y, and the battery life can be driven continuously for 3-5 hours.
Unlike electric vehicles, heavy battery packs are not a disadvantage of electric boats, and in general, the heavier the boat, the more stable it is. So Arc founder Mitch Lee said Arc One would be a luxury cruise ship. Its price is also as high as 300,000 US dollars, equivalent to about 2.2 million yuan.
Luxury, electric, yacht, once these keywords are combined, they are not destined to be ordinary people's toys, of course, they also attract a number of star investors.
Source: Arc Boats
In its second month, Arc attracted seed funding from Andreessen Horowitz, a top VC firm in Silicon Valley, who has invested in a series of Silicon Valley tech giants such as Facebook, Instagram and X.
Under the introduction of Andreessen Horowitz, Arc began to shine in the celebrity circle.
In October 2021, Arc received another amount of money from American superstar Will Smith's Dreamers VC, a fund founded by Smith in Los Angeles that invests in companies that contribute to society.
In addition to Will Smith, there is also American basketball player Kevin Durant, and "bragging dad" Sean Coombs. With the blessing of this round of "real star" VC, Arc's seed round received $7 million.
Source: Arc Boats
At the time, Arc had only a dozen employees.
A month later, Arc raised another Series A round led by former Tesla executive Greg Reichow. From April 2011 to July 2016, Greg Reichow worked at Tesla, most recently as Tesla's vice president of production.
The Series A funding round was $30 million, and Greg Reichow joined Arc's board of directors.
At the end of September 2023, Arc raised $70 million in Series B funding, which is also the largest funding round since the company was established.
Investors include Eclipse, Lowercarbon Capital and a number of other investors. Lowercase Capital is also well-known in American venture capital circles. In 2015, Forbes called the Lowercase Capital fund "the best seed portfolio ever," and Fortune magazine listed it as "one of the most successful venture capital funds in history."
Source: Arc Boats
Two years old, with a total financing of more than $100 million, Arc currently employs only 80 people.
With the money, the next step is to move into a larger market, with Arc planning to launch a larger capacity electric boat designed for water sports such as water skiing and surfing. The team is also expanding, and there are now 30 vacancies in the company.
02 Get Musk's "true biography"
Counting Arc's employees, many of them have worked for Musk, even the founders.
The founders of Arc Boats are Ryan Cook and Mitch Lee, of which Ryan Cook worked at SpaceX under Boss Ma for seven years.
Ryan Cook and Mitch Lee are college classmates who graduated from Northwestern University, both majoring in mechanical engineering.
Due to their deep knowledge of sustainability and mechanics, the two of them didn't part ways after graduating with a degree in mechanical engineering, and after graduating in 2010, Lee joined Boeing the following year as a stress analyst.
Later, with Lee's help, Cook also joined Boeing as a Tool Design Engineer, where he was responsible for customizing and designing parts for specific purpose needs, and the two have worked together ever since.
Until 2013, both resigned from Boeing, and after leaving, Ryan Cook seamlessly switched to SpaceX, which was still unknown at the time, and worked for more than seven years.
As a veteran of Space X, his LinkedIn information shows that Ryan Cook was the chief engineer of the first and second stages of the Falcon 9 rocket, as well as the chief engineer of the Starship's flaps and static aviation, and was also responsible for the design of the Starship fuel tanks.
Finally, in early 2021, he left Space X to found what is now Arc Boats with his old friend Mitch Lee as CTO.
Source: Arc Boats
After Mitch Lee left Boeing, his career was somewhat unremarkable, more like a serial entrepreneur, in the two companies have been doing technology development work, in 2015 as a co-founder of a company called Penny, in 2018 was acquired by multinational financial company Credit Karma, and since then Credit Karma has been in the position of senior manager.
After Ryan Cook left Space X, Mitch Lee left that month to co-found Arc Boats.
It is worth mentioning that Arc's chief manufacturing engineer Kevin Wollscheid also worked for Space X for six years, in fact, many people at this startup have worked in Space X, and even the hull design has several former Tesla automotive engineers.
Source: Arc Boats
Not only the team, Arc Boats' corporate strategy also borrowed a lot from Musk's model of running Tesla, such as first entering the market with high-end ship models, then using enough production to pay for research and development costs, and then gradually entering the low-end market.
Just like Tesla's once-made electric sports car Roadster, then the Model S and Model X, and then the affordable models Model 3 and Model Y.
Ryan Cook has said, "We're moving as fast as we can to the high-end market, and we're also moving into the low-end — we're using their [Tesla] tactics almost without a step." ”
03 Electrification begins to spread to the water
10 years ago, the electric boat market was still blank, even in foreign countries, there were only a few companies involved in this field. While the electric vehicle market is growing exponentially, industries such as cruise ships and aircraft are clearly attracted to electrification.
Source: Arc Boats
At the end of 2022, investment institution Insight Partners released a report on the future growth of the electric boat market, saying that the electric boat market is expected to grow from 5.26 billion US dollars in 2022 to 11.35 billion US dollars in 2028, and is expected to reach a compound growth rate of 13.7% from 2022 to 2028.
So with the naked eye, electric boat startups are beginning to emerge one after another, of course, not only "Tesla on the water" Arc Boats is ahead.
Electric boat startup Zen Yachts, also founded in 2021, was once favored by Ocean Zero, an investment firm focused on sustainable water travel, founded by Stephen Petranek and Chris Anderson, who heads TED.
Zen Yachts is positioned essentially the same as Arc, targeting the high-end market, with their ZEN50 a 51.5-foot (15.7-meter) all-electric catamaran that seats 12 passengers. It offers up to four bedrooms, each with its own full bathroom, a full kitchen.
Unlike Arc, Zen Yachts is not only powered by a motor battery, in addition to the motor, the ZEN50 also has rooftop solar panels, solar energy collected during the day, and can drive continuously at a speed of 5 knots.
In addition, General Motors has also invested in Pure Watercraft, an electric boat startup.
And Forza X1, also as a startup, also entered the capital market early, only more than a year after its establishment, completed the IPO, in August this year, Forza X1 rang the bell on the NASDAQ in the United States, and the stock price rose 179% on the first day.
Unlike Arc, the Forza X1 focuses on cost-effective electric yachts, and the development cycle will not be as long as those luxury electric boats. The startup also received its first order from OneWater Marine, one of the largest recreational yacht retailers in the United States, which Forza X1 estimates could bring in about $12 million.
Not only abroad, but also domestic battery companies such as BYD and CATL have also begun to lay out the electric boat market and began to provide their own battery solutions.
As more and more electric vehicles run on the road, the boats we drive into the water will also start to be electrocuted.