Rivian Automotive, the electric truck maker’s initial public offering (IPO), is set at $78 a share, according to people familiar with the matter. The EV maker earlier filed to offer 135 million shares at $57 to $62. It boosted the price range to $72 to $74 a share on Nov. 5, according to a prospectus, pushing the valuation at $70 billion. Rivian said it expects the IPO to bring in $11.9 billion. The historic size of Rivian IPO will benefits some of its biggest backers including Amazon and Ford, which hold a 20% and 12% stake respectively.
Rivian will trade Wednesday on the Nasdaq under the ticker RIVN. The $70 billion valuation pushes it ahead of the market capitalization of Honda Motors, which ended Tuesday with a $51 billion market cap. Ford has a valuation of $80 billion, and General Motors capped at $85.1 billion on Tuesday.
Rivian IPO Debut Surges Value to Almost $88 Billion
Rivian’s prospectus says that the company might lose up to $1.28 billion in the third quarter, while revenue will range from zero to $1 million. The prospectus also revealed a backlog of 55,400 pre-orders for its R1T and R1S electric vehicles. The R1T truck is priced at $67,500, and its SUV R1S starts at t $70,000.
The company said it expects to fill those orders by the end of 2023.
Rivian got a $2.5 billion round of investment led by T Rowe Price. Rivian is backed by Amazon and Ford Motor, and the new round takes its total investment to at least $10 billion, including a $1.3 billion round in December led by T. Rowe Price and including Amazon, Ford and BlackRock, according to Reuters.
Rivian received $440 million as a direct investment from Amazon’s Climate Fund. According to the filing, the e-commerce giant holds equity investments, including preferred stock of Rivian with about 20% ownership interest. The stock value is worth $3.8 billion.
Amazon has invested overall $1.345 billion into Rivian, according to the filing report. Amazon also recently purchased $490 million worth of convertible notes that will convert to Class A shares after the Rivian IPO.
Rivian will see the majority of its initial sales from a pre-existing order for 100,000 electric delivery vans from Amazon.
The filings revealed that the company lost $1.02 billion in 2020 and lost $994 million in the first six months of 2021 as it geared up for the launch of the new R1T electric pickup and R1S electric SUV.
There are some risks involved in having such hugely invested backers for a startup that has yet to take off. Launching a startup is expensive, and one on such a large scale is doubly so. With an IPO seeking nearly a $70 billion valuation with no significant revenue or profits generated, it seems an over-reach.
“We expect that a significant portion of our initial revenue will be from one customer that is an affiliate of one of our principal stockholders. If we are unable to maintain this relationship, or if this customer purchases significantly fewer vehicles than we currently anticipate or none at all, our business, prospects, financial condition, results of operations and cash flows could be materially and adversely affected,” the company said in its filing.
Should you buy into an eventual Rivian IPO? You may read our expert analysis here.
