Arc, a startup founded 10 months ago, has ambitions to electrify everything on the water, starting with a limited edition $300,000 boat that has attracted the attention and funding of some of the biggest stars in the sports and entertainment industries. The startup completed a seed round led by venture capital firm Andreessen Horowitz in February and brought in several new investors.
Dreams VC from Will Smith, Trirty Five Ventures from Kevin Durant and Richie Kleiman, and Combs Enterprises from Sean Didy Combs all participated in the project.
The new round of investments, described by co-founder and CEO Mitch Lee as a strategic round, put a total of more than $7 million in ARK's funding. Chris Sacca's LowerCarbon Capital and Ramtin Nami's Abstract Ventures are investing in arc's seed round. Combs, Durant and Smith have an influence that can help ARC reach the market it wants to reach. The high-end luxury market in which the first $300,000 ship is located is not arc's ultimate goal.
Lee co-founded arc company with former spacex engineer Ryan Cook, which plans to develop and sell electric boats at various price points and uses. Lee explained that the company, which is made up of more than 10 people, many of whom have been on spacex for a long time, started with building the hull.
Li said that although electric boats are quieter, faster, more reliable and less expensive to maintain, they have not scaled up due to challenges in three areas. Historically, Lee said, there has not been a battery supply chain for a ship, a suitable high-voltage electrical system, and a hull that can accommodate the weight and volume required for large battery packs.
"When we're dealing with this, we say, we're going to start with a special hull and a special battery pack, and that makes sense if you're just starting from scratch," Lee said, noting that SpaceX's engineering talent has been key to developing hulls and high-voltage electrical systems.
The company has now built a working prototype called arc one, a 24-foot-long aluminum boat that can produce 475 horsepower and can run for 3 to 5 hours on a single charge, and arc is expected to produce fewer than 25 arc one ships.
Arc One has not yet finished in the design of the interior, and its attention has been on designing the hull, electrical system and battery pack. But the ship is really working, and the team has recently traveled with it. Mass production of arc one is expected to begin next month and will be delivered to customers for the first time early next year.
Arc's plan is to use the money provided by investors to scale up production and develop ships that can compete with gas-powered ships in price, which is a strategy adopted by Tesla.
"We don't intend to produce a lot of these boats, but it sets the tone for the performance of electric boats in this market and it creates a new 'anchor' for us," Lee said. Since then, Arc hopes to launch and start selling a new boat by the end of 2022 that will be directed to consumers in the mass water sports market. While Arc hasn't set a price for its next ship yet, it needs around $150,000 to $200,000 to compete with its gasoline-powered boats.
The timing of the next ship will depend on the time and amount of additional money arc ultimately raises. For now, the company hopes that its first ship will bring more demand for its future electric products.