Transportation

This Celebrity-Backed Electric Boat Upstart With SpaceX, Tesla Roots Hauls In $30 Million


Arc, a startup with celebrity backing for its plan to make electric boats using technology designed by former SpaceX engineers, has raised $30 million in a new funding round led by a former Tesla executive to help get its high-end watercraft into production in early 2022.

The Los Angeles-based company said Greg Reichow of Eclipse Ventures, who was previously Tesla’s vice president of production, led the Series A round and is also joining Arc’s board. Arc has now raised at least $37 million since its formation this year. All its previous investors–including Will Smith’s Dreamers VC, Kevin Durant and Rich Kleiman’s Thirty Five Ventures and Sean “Diddy” Combs’ Combs Enterprises, as well as Andreessen Horowitz, Lowercarbon Capital and Abstract Ventures–joined the latest round.

The company was cofounded this year by CEO Mitch Lee and CTO Ryan Cook, a former SpaceX engineer and is taking orders for its first model, the $300,000 Arc One. They plan to start delivering the 24-foot boats to customers next spring, equipped with 200-kWh battery packs to power them for up to five hours on the water. Arc isn’t saying how many boats it plans to deliver next year or providing details about plans for more affordable models. 

“Electric boats make a ton of sense. They’re way, way more reliable, more cost-effective, easier to maintain, quieter and quicker, on top of being better for the environment,” said Lee. “The hard part is producing an electric boat that can compete with a gas boat on performance and price—and more importantly producing them at scale. Greg and the team at Eclipse have a wealth of experience making the difficult transition from R&D to high rate production and can help us do just that.” 

Arc’s news comes a day after General Motors said it was buying a 25% stake in Pure Watercraft, a competing maker of electric boats based in Seattle. The auto giant paid for its stake by investing the equivalent of $150 million in cash and a payment-in-kind deal that gives Pure Watercraft access to parts and production help, according to Reuters.

The Arc One’s lithium-ion battery pack delivers 475 horsepower and a top speed of 40 miles per hour and the aluminum boat holds up to 10 people.

During his time at Tesla Reichow led the electric-car maker’s production and vehicle supply chain operations until July 2016. Arc said it’s counting on his experience to help the company ramp up production of Arc One boats. 

Arc’s “iteration speed, conviction and ability to leverage innovations in EV driven by the automotive industry have demonstrated to me that this is the team to deliver on the vision of electrifying all watercraft,’’ Reichow said. “I look forward to partnering with them and applying my experiences from Tesla to help accelerate Arc’s production ramp over the coming year.”



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