While we watched the PayTm lose shareholder’s money here in India, an Electric Vehicle company with No Income named Rivian was making waves in the US.
Rivian, a company specialising in electric trucks and SUVs, made an IPO on November 10th. Within no time, it hit a valuation of $115 billion, making it the biggest IPO of the year.
But here’s the catch, Rivian has no revenue!! right now. The company hasn’t even begun actively delivering vehicles to the general public. The fundamentals are so bad that it makes PayTm look like gold in comparison.
Rivian’s market jumped at $100.73, up nearly 30% from its initial public offering price. Rivian has become the second most valuable automaker in the United States, after Tesla Inc, which is valued at $1.06 trillion. Rivian scored ahead of General Motors Co at $86.05 billion, Ford Motor Co at $77.37 billion, and Lucid Group at $65.96 billion, despite having only recently begun selling vehicles and having little revenue to declare.
So why is a company like Rivian worth almost equal to Tata Steel??
The reason is in the company’s backers, which gave investors confidence in Rivian’s ability to deliver.
First up was Amazon.
Amazon owns 18.5% of the company, having invested billions ibn Rivian’s funding rounds and also having pumped in $200 million during the IPO. Additionally, Amazon pre-ordered a lakh vehicles. As per Forbes, this translates to $12 billion in revenue post delivers!!!
Also, a partnership with Amazon would be extremely lucrative for any automotive company as the company is looking to improve on its logistics.Amazon.com Inc is Rivian’s largest shareholder with a 20% stake.
Amazon has ordered 100,000 Rivian vehicles to be delivered by 2030. The companies plan to have 10,000 new Rivian-Amazon delivery vehicles on the road as early as next year. Amazon, which is transitioning its fleet to renewable-energy delivery vans, announced in 2019 that it was purchasing thousands of vehicles from Rivian. According to more recent papers, Amazon has exclusive rights to Rivian’s battery-electric delivery cars for at least four years, with a right of first refusal beyond that.
Rivian relation with Ford.
And the second big name attached to Rivian is Ford, which invested over $820 million in Rivian in its funding rounds and holds 11.8% of the company.Rivian’s shares owned by Ford, were sold in an upsized IPO of 153 million shares at $78 a share, raising nearly $12 billion, making it one of the largest U.S. IPOs ever.
Ford has remained tight-lipped about its plans for its roughly 12% investment in Rivian, which was valued at $10 billion on November 10th. Rivian’s shares, which were owned by Ford, were sold in an upsized IPO of 153 million shares at $78 a share, raising nearly $12 billion, making it one of the largest U.S. IPOs ever. Ford has remained tight-lipped about its plans for its roughly 12% investment in Rivian, which was valued at $10 billion on November 10th.
More around company’s Income
The company also has public pre-orders of about 55k vehicles which translate to over $4 billion in revenue. The IPO allowed Rivian to raise about $12 billion to fund growth, and that figure could rise to $13.7 billion if the full over-allotment of shares is exercised.All this, when coupled with a general bullishness surrounding the EV sector, made Rivian wroth over $100 billion without even having a cent in revenue.
Rivian’s IPO coincides with the United Nations Climate Summit, which saw automakers, airlines, and governments make a slew of commitments to reduce greenhouse gas emissions from global transportation.