Rivian Completes $1.3 Billion Equity Round: Fourth Raise in 2019

Rivian today announced a $1.3 billion fundraising round led by T. Rowe Price, with participation from existing investors including Amazon and Ford:

It was the fourth investment in Rivian this year and the company’s largest funding round so far. Amazon and Ford Motor, which were already Rivian investors, also took part in the latest round.

The New York Times

Capital Raises: 4

Cars Sold: 0

Starting a car company is extremely tough. Rivian stands apart from other EV startups with its strong support and backing by Amazon and Ford, as well as large institutional investors. Of every EV startup I know of worldwide, Rivian looks the most promising.

But that doesn’t mean this isn’t going to be extremely tough: If Rivians first vehicles don’t take off, they could have a big problem on their hands. Luckily, large vehicle orders from Amazon and partnerships with Ford should help reduce the risk that Rivian ends up with a giant factory and no customers.

The funding is a vote of confidence in Rivian, which expects to start delivering a truck and a sport utility vehicle next year. But it also underscores the company’s need for capital. Investments in the company in 2019 have raised $2.85 billion.

The New York Times

They’ll probably need to raise another $10 billion to bring their vehicles to market with adequate delivery and service and charging infrastructure.

This investment demonstrates confidence in our team, products, technology and strategy — we are extremely excited to have the support from such strong shareholders

R. J. Scaringe, Rivian Founder and CEO

It is a pretty impressive list of investors, no doubt about that.

The investment also raises the stakes as Rivian prepares to take on Tesla, which produces S.U.V.s as well as sedans and last month announced plans for what it is calling the Cybertruck.

The New York Times

Oh yeah, the $40,000 truck competing against your $70,000 truck. Hopefully that doesn’t impact demand.

Analysts have said Rivian’s truck is aimed more at recreational activities than at work use. Its truck is shorter than the best-selling Ford F-150. Ford, which invested $500 million in Rivian earlier this year, has said it will release a hybrid F-150 next year and is working on an all-electric version.

The New York Times

85% of full-sized pickup trucks designed for work use are used only for personal use in North America. When they say “aimed at recreational use”, it might make sense from a product marketing perspective but the danger is that it just ends up as a truck that’s not taken seriously.

Amazon, which led a $700 million investment round in Rivian in February, is collaborating with the company to develop an electric delivery van. Rivian said Monday that Amazon had ordered 100,000 of the vans and that it expected to start delivering them in 2021. The vans would presumably become part of an end-to-end logistics network that Amazon has been working on since 2015.

The New York Times

Nice, I bet Bezos can’t wait to get those vans. Hopefully they don’t suck.

The company says its cheapest R1T can be driven for 230 miles on a charge. Rivian’s website says the starting price of the R1T is $69,000, but on Monday a Rivian representative said a basic model could cost less.

The New York Times

For comparison, the 250-mile Cybertruck costs $39,000.

Rivian just completed it’s fourth round of fundraising this year. This time it raised $1.4 billion from T. Rowe Price, Amazon, and Ford

Read the full story at The New York Times

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6 thoughts on “Rivian Completes $1.3 Billion Equity Round: Fourth Raise in 2019

  1. While establishing a viable new car maker surely takes at least $10 billion in investment, I’m pretty sure they don’t need nearly that much to bring their first vehicles to market…

    I’m not quite sure what to think of Rivian’s prospects in general. They were careful to position their first vehicles not to compete with Tesla head-on, which is smart. Still, between Tesla and legacy makers getting more serious about EVs, Rivian’s niche is likely to be too narrow to become a viable car maker based on this… However, their deal with Amazon, as well as supplying power trains to other makers, should provide them with a reliable income stream, and help a lot with economies of scale — quite possibly enough to make this all work out, if they do well on execution…

    1. I don’t think that’s a fair comparison at all. Rivian seems to be making much smarter decisions: unique niche, beneficial partnerships… Plus they don’t seem to emanate the same sort of hubris.

      Having said that, they are yet to face the really difficult problems of getting production going and creating a viable business — so we should reserve judgement for now…

        1. That’s an interesting thought…

          It’s not quite comparable though: when an established maker fails, they are very likely to get bailed out in one form or another, and continue much as they were. When a startup like Rivian fails, they are more likely to cease existence in their current form. (Though some parts might get bought out and live on…)

          As for the actual chance… While legacy makers are certain to face existential troubles in the upcoming disruption(s), with Rivian we simply don’t know yet whether they are viable to begin with… I don’t think I’d place any bets at this point.

          1. I think that they have enough orders that they’ll be viable. meanwhile legacy auto has huge legacy costs. both are in a very risky position with what’s happening, but rivian is probably a little better off overall

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