Electric boat company, Arc, raises $70 million to sweep the water sports market

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Working to mitigate the effect of traditional recreational boat engines with loud motors, fumes, and expensive gas prices; Arc Boat Company provides quieter, faster, and environmentally friendly EV boats in an innovative wave to sweep the market. Arc’s first model, the $300,000, 24-foot Arc One, is nearing completion on its deliveries. Right on its tail, Arc announced the close of $70 million in Series B funding. This brought Arc’s total funding to over $100 million.

The round was supported by existing investors Eclipse, Andreessen Horowitz, Lowercarbon Capital, and Abstract Ventures. It also welcomed new investor Menlo Ventures, led by Arc partner and boat enthusiast Shawn Carolan.

Arc's Arc One on sea with 7 cruisers sitting inside
Arc One

With these fresh funds, Arc’s primary target is the booming water sports market. Going forward, the company plans to design a high-performance electric boat for waterboarding. To that end, they’re also opening a new 150,000-square-foot factory in Torrance, California, later this year. They are also actively hiring across all departments. In the next 18 months, the company hopes to double its workforce to around 140 employees.

“This round of financing is really to get us into mass manufacturing of a wakesports boat that is actually designed to help substantially fund our operations. Our goal as a business is to make better boats and sell them for a profit,” shared Arc’s CEO and co-founder, Mitch Lee.

With the new wakeboarding boat, the founders said the goal is to build a battery-powered vessel that can compete on price and performance with popular gas-powered models, which can cost between $180,000 and $250,000. These premium boats can be potentially cheaper than engine boats in the long run. They are low-maintenance and suitable for all seasons, unlike gas engines that tend to malfunction during the winter.

About Arc – Building the next generation of watercraft

Headquartered in Los Angeles, CA, Arc Boat Company is the brainchild of Mitch Lee and former SpaceX engineer Ryan Cook. The team, led by former rocket engineers, strives to provide electric boats built by blending modern aerospace design and manufacturing techniques with traditional marine craftsmanship.

Arc’s high-performing boats promise structurally integrated batteries, over-the-air software updates, and unique tech features. Their first model, the Arc One, can reach top speeds of 40 miles per hour. Moreover, it is a 500-horsepower vessel that has three times the battery storage capacity of a Tesla Model Y.

Arc One's dock interior with touchscreen pad
Arc One’s dock interior with touchscreen pad

Right from the start, Arc’s meticulous design and development vision attracted investment from Will Smith’s Dreamers VC, Kevin Durant and Rich Kleiman’s Thirty Five Ventures, and Sean “Diddy” Combs’ Combs Enterprises. The design and spec goals of the new watersports boats are undisclosed for now. Though, Lee shares the intention to shoot for the premium boat market; with the high-performing boats costing as much as $250,000. Previously, the company described the high price of the limited-edition Arc One as a “bootstrapping tool” that helped the company streamline its manufacturing and technological processes.

The EV market is highly competitive, with Arc going against companies like Candela, Evoy, Navier, GM-backed Pure Watercraft, Seabubbles, and Zin. But investor Steve Carolan pointed out that many of these companies focus on hydrofoil electric boats instead of wakes.

“There’s a whole category of EVs that have headed towards foils. The Arc approach, and particularly in the watersports market, is sort of perfect,” said Steve Carolan about Arc’s commitment to its software and battery system.

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