Arc, the Los Angeles-based electric boat startup, has secured $70 million in a Series B funding round. The funding round was led by returning investors Eclipse, Andreessen Horowitz, Lowercarbon Capital and Abstract Ventures, with new investor Menlo Ventures also joining in. With this fresh capital injection, Arc plans to scale up its operations and venture into the watersports market, specifically targeting wakeboarding and wakesurfing activities.
Key Takeaway
Arc, the electric boat startup, has raised $70 million in funding to fuel its expansion into the watersports market. With plans to develop a higher volume electric boat for wakesurfing and wakeboarding, Arc aims to create top-notch vessels that match or exceed competitors in terms of performance and price. This move opens up exciting prospects for the company in a niche market that demands high-quality electric boats for watersport activities.
An Impressive Journey So Far
Arc, founded in January 2021 by co-founders Mitch Lee and Ryan Cook, has quickly gained attention and financial support. The startup initially focused on designing and developing a purpose-built hull and battery packs for electric watercraft. Thanks to early investments from Dreamers VC, Thirty Five Ventures, and Combs Enterprises, they were able to produce the limited edition Arc One boat, a 24-foot aluminum vessel with a 500 horsepower electric motor. With wireless software updates and modern features like a touchscreen interface, the Arc One boats have become highly sought after. The company has delivered fewer than 20 Arc One boats, with the remaining ones set to be delivered this fall.
Funds for Expansion and Innovation
The $70 million funding round will help Arc advance to the next phase of its business, focusing on mass manufacturing of high-performance wakesports boats. The company’s co-founders plan to use their newly acquired capital to develop a new electric boat that excels in wakeboarding, wakesurfing, and other watersport activities. They aim to design top-of-the-line vessels that provide exceptional performance and quality, with the goal of generating sustainable profits.
In line with their expansion plans, Arc intends to move into a larger facility in Torrance, California later this year. This expansion will allow them to increase production capacity and accommodate their growing team. The startup is also actively hiring for nearly 30 positions.
The Premium Market and Promising Prospects
Arc’s approach to the electric boat market sets them apart from their competitors. While the sector is becoming increasingly crowded with companies such as Candela, Evoy, Navier, Pure Watercraft (backed by GM), Seabubbles, and Zin, Arc has identified a niche in the watersports market. By focusing on wakesports boats, which create larger wakes ideal for watersport activities, they aim to capture the attention of enthusiasts and professionals in the industry.
Although Arc has yet to reveal the design, specifications, and price point of their future wakesports boat, they are positioning themselves as a premium brand. Lee compares their strategy to the automotive industry, where there is a clear distinction between affordable and luxury vehicles. Despite the premium pricing, high-performance wakesports boats have proven to be successful in terms of sales.
