GoKawiilLos Angeles startup Arc Boat Company wants to expand its nascent commercial business and even sell electric propulsion systems to defense contractors, in an attempt to fulfill founder Mitch Lee’s desire to “electrify everything on the water.”
To do that, Arc has raised $50 million in a Series C funding round from Eclipse, a16z, Menlo Ventures, Lowercarbon Capital, Necessary Ventures, and Offline Ventures.
The expansion into these newer markets won’t come at the expense of Arc’s consumer boat business, Lee told TechCrunch in an interview. He said sport boats are a category that generates “meaningful revenue” for Arc, and helps prove to commercial customers that the company’s technology is both capable and durable.
It’s a plan that roughly approximates how Tesla got started, and one that Greg Reichow — a former VP at Tesla and a general partner at Eclipse — said can work for Arc.
“The right strategy was go develop the technology, get it to work on the high end of consumer boats, then take that technology as you get some experience with it and make sure the economics really work well for the commercial sector, and you have the reliability for the commercial sector,” he said in an interview with TechCrunch. “And so that’s where we’re at today with Arc.”
This approach appears to be working. Lee said organic interest from commercial and defense players was so strong that it accelerated the startup’s plans to expand into these sectors.
“Our thesis is the entire industry is going to go electric in the same way that lawn equipment is all going electric, because it’s just a way better experience,” he said.
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