Arc, a firm that debuted ten months ago with the goal of electrifying everything on the sea, starting with a $300,000 limited-edition boat, has attracted the interest and funding of some of Hollywood’s greatest names. The business has added additional investors, including cash from Will Smith’s Dreamers VC, Kevin Durant and Rich Kleiman’s Thirty-Five Ventures, and Sean “Diddy” Combs’ Combs Enterprises, after closing a seed round headed by VC firm Andreessen Horowitz in February. Arc’s total capital now exceeds $7 million, according to the latest investment, which co-founder and CEO Mitch Lee sees as a strategic round. Arc’s seed round was funded by Chris Sacca’s Lowercarbon Capital and Ramtin Nami’s Abstract Ventures.
In a recent interview with TechCrunch, Lee said, “All of these folks, in addition to being world-class at what they do, have a ton of experience establishing brands, selling things, and generally fostering a community.” In other words, Combs, Durant, and Smith have a sphere of influence that taps into the market that Arc is targeting. According to Lee, the higher luxury market, which includes that first $300,000 boat, is not Arc’s end aim.
With the purpose of creating and marketing electric watercraft at various price ranges and use cases, Lee and Ryan Cook, a former SpaceX engineer, established arc. The hull was the starting point for a team of more than ten employees, many of whom had previously worked at SpaceX. Despite the fact that electric boats are quieter, faster, more dependable, and less expensive to operate, they have yet to gain traction, according to Lee. According to Lee, there has never been a supply chain for boat batteries, high-voltage electrical systems, or a hull built to withstand the weight and space required for huge battery packs.
“When we approached this, we said we’re going to start with a purpose-built hull and purpose-built battery packs that are laid out in a way that makes sense if you were to start from scratch,” Lee explained, noting that SpaceX’s engineering talent was crucial in developing the hull and high-voltage electrical system required. The Arc 1, a 24-foot aluminum boat with 475 horsepower and a range of 3 to 5 hours on a single charge, is currently a functional alpha prototype for the firm. Arc will only construct 25 Arc 1 boats.
According to Lee, the Arc 1 is not visually finished, since the focus has been on building the hull, electrical system, and battery packs. The boat, though, is functional; the team just took it waterskiing. Arc 1’s serial manufacturing is set to begin next month, with the first customer deliveries likely early next year. Arc’s objective is to leverage investor funding to increase manufacturing and build boats that are cost-competitive with gas-powered boats, similar to Tesla’s model.
“We don’t aim to produce many of them,” Lee explained, “but it sets the tone for what an electric boat might be in this market and establishes a new anchor for us.” By the end of 2022, Arc aims to develop and begin selling a new boat that is directly targeted customers in the mainstream watersports sector. Arc has not established a price for its next boat, but it will need to be in the $150,000 to $200,000 range to compete with its gas-powered counterparts. The date of the next boat will determine by the time and quantity of further funding raised by Arc, according to Lee. For the time being, the business is hoping that the success of its first boat will boost demand for its future electric products.
