Rivian, the electric car startup founded by Alphabet Inc.’s X Labs, unveiled details Wednesday about how it intends to raise $1 billion in an initial public offering.
Using funds from backers including billionaire Tesla Inc. chief executive officer Elon Musk, the company said it will trade on the Nasdaq Stock Market under the symbol RIV. The valuation of Rivian will rise to as much as $7.6 billion after the IPO, according to the filing.
The company plans to list shares based on its proven ability to raise funds and spend them effectively while recognizing the risks involved in a new industry, according to the filing. It said it began selling Tesla’s Model X crossover later than planned and that its Model X learning curve could have put additional stress on the startup. It also noted that some of its stores are trading at prices below the level of other companies in the industry, as is the case for Tesla.
The company is basing its IPO on four drivers:
“Positive growth: The company has enjoyed rapid product and service acceptance among drivers and companies that have invested in Rivian vehicles. The company has also seen accelerated growth and development of its industry-leading road-test fleet.” Rivian’s Model X platform will benefit from a broader operating model, as the company plans to expand into other categories of vehicles.
The company has enjoyed rapid product and service acceptance among drivers and companies that have invested in Rivian vehicles. The company has also seen accelerated growth and development of its industry-leading road-test fleet.” Rivian’s Model X platform will benefit from a broader operating model, as the company plans to expand into other categories of vehicles. Fundraising: The company plans to raise funds to acquire additional manufacturing and engineering capacity as well as additional technology and testing resources, and to move into other new segments of the market.
The company plans to raise funds to acquire additional manufacturing and engineering capacity as well as additional technology and testing resources, and to move into other new segments of the market. Flexibility: The company believes that its strategy of developing and launching commercial vehicles independent of standard processes and supply chain connections allows it to be more nimble in the face of rapid technological change.
Alphabet’s X Labs is known for developing cutting-edge technology for Google’s parent company. Musk, the founder of both Tesla and SpaceX, has said that Rivian’s battery pack is the “holy grail” of electric vehicles. Musk also has said that the only electric car company that can beat Tesla in terms of profitability is Rivian.
By highlighting the startup’s technology and forecasts, Rivian is reaching a broader investor audience ahead of its May 8 registration deadline. Musk, who has invested in the company, is also looking to use the IPO as a way to diversify his net worth. According to Bloomberg calculations, that puts Musk on track to become the world’s fourth-richest person. He has a market value of $18.4 billion and there are only a few hundred people with a net worth bigger than that.
Rivian is part of the so-called “marque era” of private car companies. Rivian will be joining a wave of startups like rival Faraday Future, which has said it will release its first car by the end of the year, and Lucid Motors, which expects to begin testing its vehicle in 2019. By comparison, GM said last month that it aims to sell 10 million electrified vehicles globally by 2028.
GM invested $400 million in Rivian this year, along with New York billionaire Ron Burkle’s Yucaipa Cos. Nissan Motor Co. joined as a strategic investor in 2015.
Rivian currently sells 10 vehicles, with three more on the way this year. It signed an agreement in March to sell its first sports car in the first half of next year. Models built at its facility in San Marcos, Calif., will be initially assembled for domestic markets, though it plans to target the burgeoning Asian market in the future.