Arc is impressing investors as it finishes delivery of its limited edition $300,000 electric boat and looks to its next target: water sports. Specifically the kind that requires waking up.
The Los Angeles-based electric boat startup, which designed, manufactured and now delivers a limited edition Arc One, has raised $70 million in a Series B round from a group of returning investors, including Eclipse, Andreessen Horowitz, and Lowercarbon Capital. And abstract projects. New investor Menlo Ventures has also joined – specifically long-time partner and self-proclaimed boating enthusiast Sean Carolan. Arch It has raised more than $100 million to date.
With new capital, co-founders Mitch Lee and Ryan Cook plan to expand their range with a new, larger electric boat designed for wakeboarding, surfing and other water sports like tubing.
Lee and Cook, a former SpaceX engineer who also serves as CTO, founded Arc in January 2021 with a plan to develop and sell electric watercraft at different price points and use cases. They began by focusing on designing and developing a purpose-built chassis and purpose-built battery packs, a plan that attracted early investments from Will Smith’s Dreamers VC, Kevin Durant and Rich Kleiman’s Thirty Five Ventures, and Sean “Diddy” Combs’ Combs. Companies. The first boat was the Arc One, a 24-foot aluminum boat that produced 500 horsepower and could run for 3 to 5 hours on a single charge. The boat is also equipped with software – with the ability to make wireless updates – and modern touches such as a touch screen. The company has produced fewer than 20 Arc One boats, the last of which is scheduled for delivery this fall, Lee said.
Image credits: Arch
“Arc One was a bootstrap tool,” he told me, adding that it gave the company a jumpstart on production and intellectual property and helped it build its brand. “This round of financing is really intended to catapult us into mass manufacturing of a watersports boat that is actually designed to help fund our operations more effectively.” big. Our goal as a company is to make better boats and sell them for a profit.
Arc plans to move to a larger, 150,000-square-foot facility in Torrance, California, later this year as part of that goal. The startup, which will continue to design and build its boats (and software) in-house, is also hiring. Nearly 30 positions are open at the company.
Arc is not sharing the design, specifications or price point of this new electric boat, Lee said, noting that the company plans to go “bend to bend” or compete directly on performance and price. This doesn’t mean the next-gen Arc boat will be cheap. High-performance watersports boats can cost up to $250,000. A mid-range indoor ski boat is priced around $100,000.
Lee likened it to the sedan market, which offers premium cars at reasonable prices. Ark targets the insurance premium. However, Lee noted that in the industry, some of these premium-priced boats have the highest sales.
Arc isn’t the only electric boat startup trying to gain market share. The emerging industry is becoming increasingly crowded with companies such as Candela, Evoy, Navier, GM-backed Pure Watercraft, Seabubbles and Zin. But Carolan, who has pitched electric boat startups before, noted that many of these boats are electric hydrofoils, which don’t cause any wakes. At least not big enough to market the water sports industry.
“There’s a whole category of electric vehicles that have moved toward chips,” Carolan said. “The Arc approach, especially in the water sports market, is kind of perfect.” He added that the founding team, and its approach to building its own software and battery system, made it the first electric boat startup that “felt compelling enough to make an investment.”