Arc raises $30 million to power its electric boat ambitions
Electric boat startup Arc has raised $30 million just five months after coming out of stealth mode and has started putting its first prototype through its paces. The Series A funding round was led by Greg Reichow, a partner at Eclipse Ventures and a former vice president of production at Tesla. The round also includes existing Arc investors like Andreessen Horowitz and celebrities like Will Smith, Kevin Durant, and Sean “Diddy” Combs, who first put money into the startup in October through their own funds.
Arc aims to sell a limited number of its first electric boat, the 24-foot Arc One, at an extraordinary price of $300,000 before moving on to making more affordable boats. It plans to justify that price by promising a much lower cost of ownership than gas-powered boats, as well as far easier maintenance and upkeep. Arc founder Mitch Lee is also unabashed that the startup is targeting the types of high-net-worth individuals like the celebrities who’ve invested in the company as its first customers.
“That is very much an indication of where we want to take this company from a brand and lifestyle perspective,” Lee said in an interview with The Verge.
Arc plans for its first boat to have a 200kWh, 800-volt battery pack capable of powering an electric motor with at least 475 horsepower. It will have a top speed of around 40 miles per hour and can last about four hours under power before needing to be recharged — which the startup claims is plenty for a day out on the water. One big claimed advantage of the Arc One’s design over other early electric boats is that it can be used for watersports.
After that, Lee plans to take the money generated from Arc One sales and put it back into research and development to make a more affordable version that the startup could sell thousands of.
Lee told The Verge earlier this year that Arc was planning to move quickly, but he said this week that the investment from Eclipse will make it possible to accelerate the startup’s plans. Arc has already been testing a prototype on the water — Lee said one employee has even water skied behind it — and that Arc is “nearing completion on a pre-production version of the Arc One.” The company will begin limited production of the boat at its shop in Los Angeles, California, “in the coming weeks” and start deliveries “shortly thereafter,” Lee said.
Arc already boasts a few former SpaceX employees, but Lee (who came from Credit Karma) said the new funding will help the startup hire in an increasingly competitive electric watercraft market — one that General Motors even dipped into this week when it announced an investment in Pure Watercraft, which makes electric motors and batteries for boats.
Broadly, though, Lee said he thinks Arc has a lot of advantages when it comes to hiring talent that may otherwise have planned to go to automotive EV startups like Rivian or established players like Tesla. Arc employees are more likely to “own” a bigger portion of the development of the boat, as opposed to maybe just a side mirror like at a car company, he said. But most of all, Lee said, “boats are a fun product.”
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