Powering the Next Wave of the Marine Industry: Our Series B in Arc

As a kid in Minnesota — the Land of 10,000 Lakes — I grew up on the water swimming, water skiing, and sailing in particular. The exciting, yet serene experience of being out on a sailboat was both energizing and restorative, in stark contrast to the noisy, noxious — yet powerful — gas boats sharing the water. I never expected to find a boat that combined the peacefulness of sailing with the power of gas boats, but that all changed when I first rode the Arc One. Suddenly, I could rocket across the water and hold a conversation without yelling. It reminded me of the first time I went for a ride in a Tesla — it was clear that the Arc One would fundamentally change the experience of boating. This limited-edition electric boat was designed and built by Arc’s team of rocket, EV, marine, and software engineers. Arc’s team — led by Co-Founders Mitch Lee and Ryan Cook — not only delivered a new way to experience the water, but accomplished a major engineering feat. Today, less than two years since Arc first embarked on its mission to electrify the world of boating, the team has started proving their vision through the water sports market. To unlock its next phase of growth, the company has announced its $70M Series B led by Eclipse and in partnership with Menlo Ventures, Andreessen Horowitz, Abstract Ventures, and Lowercarbon Capital. The problem the Arc team is solving aligns with a major problem in transportation broadly: moving from fossil fuels to sustainable energy sources. The marine industry contributes $57B to the U.S. economy, but is also one of the largest sources of carbon emissions. As such, it has always been ripe for electrification. However, until recently, the price per watt of lithium-ion cells was too high to justify the cost of powering boats primarily by batteries. Instead, it made sense to start the electric movement with cars. Indeed, over the past couple of decades the auto industry developed and scaled the lithium-ion battery ecosystem, with costs falling dramatically. This progress opened the door for Arc to electrify the marine industry.

Taking a similar approach as that of Tesla, Arc started with the premium end of the market (the Arc One is reminiscent of the Tesla Roadster) and prioritized vertical integration, designing things like the battery pack and hull themselves from day one. This strategy not only enabled the team to build a far better product than anything else on the market, but also unlocked one of the company’s greatest strengths: its remarkably fast rate of iterating, learning, and building. As Co-Founders, Lee and Cook anchor and exemplify this approach, driving incredible results in a short amount of time. Their deep conviction in the marine market, their experience building similar systems at companies like SpaceX, and their ability to assemble a world-class team have led to the team’s rapid success. Since being founded in 2021, Arc has designed, manufactured, tested, and brought to market the most advanced, high-performing, software-enabled electric watercraft available today. To found a company and deliver a fully vertically integrated boat to a customer in under two years is nothing less than groundbreaking. With this latest round of funding, Arc will continue its momentum by developing the next wave of high-performance electric boats. To facilitate its expanded capacity, the company is opening a new 150,000-square-foot factory in Torrance, California, later this year, and is actively hiring across all departments.

While the marine industry has been historically slow to innovate, the time is right for an electrical upgrade. Arc’s top-tier team, its vertically integrated approach, and its proven execution mean that it is poised to build the Tesla of the marine industry. Eclipse is thrilled to partner with the Arc team as it transforms boating, beginning with watersports. Congratulations Mitch, Ryan, and the entire Arc team! More on today’s news from Bloomberg Tech

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