Amazon-backed Rivian Close to a $25 Billion Valuation With a New Funding Round
Electric truck startup Rivian Automotive Inc. is close to raising a new round of funding that would value the startup at $25 billion, according to people familiar with the matter. As reported by Bloomberg, existing Rivian investors will participate in the latest funding round, which will raise several billion dollars for the electric truck startup, the people added, asking not to be identified because the matter is private.
The existing investors include Amazon, T. Rowe Price Group Inc., BlackRock Inc., Soros Fund Management, Coatue, Fidelity Investments and Baron Capital Group.
T. Rowe price led Rivian's $2.5 billion investment round in July, 2020. At the time, the funding was Rivian's second big investment round. In Dec 2019 T. Rowe Price led a $1.3 billion round in Rivian which also included BlackRock Inc.
However, Rivian's newest funding isn't finalized and details could still change, according to sources that spoke with Bloomberg.
The new funds will be on top of the $6 billion Rivian has already raised, which makes it one of the most well funded electric vehicle startups.
Rivian is emerging as one of the most promising electric vehicle startups since Tesla launched the Model S in 2012. However unlike Tesla, the company is focused on developing battery-powered trucks. Rivian is building two consumer vehicles, the Rivian R1T pickup and R1S SUV.
A representative for Rivian said in a statement to Bloomberg, "We are focused on delivering the R1T, R1S, and Amazon delivery vehicles in 2021. We often speak to investors, and we have no announcement to make at this time."
Both the R1T and R1S SUV will be built on the same skateboard platform. Rivian is marketing its battery-powered trucks as adventure vehicles. Both will be built to handle off-road driving with 14 inches of ground clearance. Its the exact opposite of Tesla's Model X SUV, which is primarily designed for everyday driving.
Rivian is also building custom-built battery-powered delivery vehicles for Amazon, as the ecommerce company looks to add tens of thousands of zero-emissions electric vehicles to its fleet over the next decade. Amazon ordered 100,000 delivery vans from Rivian.
"When we set out to create our first customized electric delivery vehicle with Rivian, we knew that it needed to far surpass any other delivery vehicle. We wanted drivers to love using it and customers to feel excited when they saw it driving through their neighborhood and pulling up to their home," said Ross Rachey, Director of Amazon's Global Fleet and Products in October when the Amazon delivery van was unveiled. "We combined Rivian's technology with our delivery logistics knowledge, and the result is what you see here-the future of last mile delivery."
Rivian plans to bring the R1T and R1S to market by June 2021, becoming the first company to bring a rugged and capable electric truck to market.
The R1T will offer a minimum range of 300 miles and up to 400 miles with an optional, extended range battery. The R1S SUV is expected to have similar specs, since it's built on the same architecture.
Rivian also plans to launch its "Rivian Adventure Network", which is a network of fast-charging stations located near popular outdoor recreational areas so drivers can explore the outdoors and always have a place to charge that's off the beaten path.
Rivian was founded in 2009 by R.J. Scaringe, a Massachusetts Institute of Technology (MIT) graduate with a doctorate in mechanical engineering. The electric vehicle startup is following Tesla's lead in challenging U.S. rivals General Motors and Ford in the pickup and SUV segment, two of the most profitable categories for U.S. automakers that have yet to be fully electrified.
Although models are in the works from Detroit's automakers, such as the Hummer EV from General Motors, Rivian can beat GM to market with its fully-electric R1T if the company meets its June 2021 launch target.
However, since the market is relatively untested, there is no telling if electric trucks will lure buyers away from popular models such as the Ford F-Series pickups and the best selling models from GM, including the Chevy Silverado and GMC truck models.
Tesla is also planning to bring its futuristic Cybertruck to market by the end of this year, which could give Rivian some more competition.
Tesla is building a new factory in Austin, Texas to build the Cybertruck. The Austin factory is Tesla's second in the U.S., the other is located in Fremont, California where Tesla currently builds all of the vehicles its sells in the U.S.
Rivian also owns a former auto factory in Illinois. Rivian purchased a shuttered Mitsubishi Motors auto plant in Normal, Illinois in 2017, which is fairly close to the traditional home of the U.S. auto industry in Detroit. The factory is currently undergoing renovations to converting it into an electric vehicle manufacturing plant.
Rivian joins California-based Tesla, which purchased a former General Motors assembly plant in Fremont, California, as well as EV startup Workhorse, which moved into GM's former Lordstown, Ohio factory, which the automaker closed in 2019.
With billions in funding, a deal with Amazon for 100,000 delivery vans, and a factory in Illinois being retooled to build its rugged electric adventure vehicles, Rivian is one EV startup to keep an eye on.
In Nov 2020, Rivian along with Tesla and California luxury electric vehicle startup Lucid Motors joined a new lobbying group called the "Zero Emission Transportation Association" (ZETA). The organization will focus on advocating for national policies to promote the use of zero-emissions electric vehicles, including light, medium and heavy-duty commercial trucks by 2030.
Missing from the group however are U.S. automakers General Motors and Ford Motor Co, both of which rely heavily on the profits of gas-guzzling trucks and SUVs at the moment. However both automakers are likely paying close attention to Rivian, a well-funded company with the potential to take away a big chunk of their profits.
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