The latest round of funding by the United States based electric vehicle startup Rivian yielded $1.3 billion in investments from the likes of fund manager T. Rowe Price as well as contributions from its existing investors including the online retailer Amazon.com Inc. and the second largest US auto maker of the Ford Motor Co.
For Rivian, this is the fourth investment round and the latest round also included BlackRock Inc. According to analysts, this latest funding round has helped the Plymouth, Michigan-based auto company to be identified as one of the companies that has a strong funding base in an industry segment that is crowded and one where Tesla Inc is the most established player.
“This investment demonstrates confidence in our team, products, technology and strategy,” Rivian Chief Executive R.J. Scaringe said in a statement.
Despite their growing popularity, only a small piece of the global automotive market is accounted for by electric vehicles. Established auto companies are being pushed to develop electric vehicles in China and Europe. While Tesla already has the early bird advantage in the EV market, established car makers such as Ford, General Motors Co and others have been pushed to announce their plans to invest billions in the development of EVs.
Development of an all-electric pickup truck, the R1T, is the primary target if Rivian, which was founded in 2009. The company also plans to roll out the companion R1S SUV. It ex[ects to be able to roll out the two vehicles in late 2020. A Rivian-designed “skateboard,” a chassis that bundles electric motor, batteries and controls, forms the basis of both the models. The platform however has the flexibility to accommodate a variety of body styles.
According to investor website PitchBook, $2.2 billion had been raised from investors by Rivian prior to the latest funding round. The estimated valuation of the company is between $5 billion and $7 billion.
The latest investment round however did not result in addition of any new board seats, Rivian said on Monday.
Other bets in the auto sector have also been made by T. Rowe Price. It owns a large chunk of Tesla shares and also has made investments in Cruise self-driving division, which is majorly owned by GM. Self-driving car software startup Aurora and British online food delivery company Deliveroo are also among the other companies where T. Rowe Price has invested.
Amazon too has developed a number of relationships and deals right across the auto industry. The online retailer was the leader in the $700 million investment round for Rivian in February this year. 100,000 electric delivery vehicles from Rivian have also been ordered by the e-commerce giant. A former Mitsubishi plant in Normal, Illinois, would be the facility where the first Amazon vans will be built starting 2021.
In April, an investment of $500 million in Rivian was made by Ford and the auto giant hads plans to aid the startup to begin production in Normal in 2020.
“We want to maintain a meaningful value in the ownership and future of that company,” Ford spokesman T.R. Reid said of Rivian.
(Adapted from Nasdaq.com)