Makers of baby food that are looking to reap the benefits of China’s growing middle class are benefiting as the country’s economic growth rates slow. Rivian Inc., the little Michigan-based company that has hit the ground running in emerging markets, is now contemplating a very high valuation. Rivian has achieved more than $230m of funding, a substantial amount that for a company of its size dwarfs its rivals. The company’s near double in value since the beginning of the year is placing a few bankers on high alert. The manufacturer of electric vehicles, electric cars and electric buses is seeking to raise more money. The RV maker has had an up and down four years as it limped through the financial crisis with tens of millions of dollars in bank debt while it developed its products. That is now changing. The company is experiencing rapid growth and it appears to be poised to make a big impact.
The big question is what the company’s valuation will be. Rivian is looking for the value of its stake in the company to be between $5bn and $10bn. It is targeting a $1bn valuation if it is interested in going public. The company is looking to achieve a $200bn valuation in just five years. The company, founded by a former Volkswagen executive, has shifted from being a niche player into a leader in the growing markets for electric vehicles and electric buses.
Rivian now has $260m in funding after it successfully raised $200m this summer. The vehicle maker has also landed about $180m of projects and customers, in a move that was critical to its future business. Some of those customers include Daimler AG, Ford Motor Co., Citigroup Inc. and Lufthansa. Rivian is currently gearing up to roll out its first electric buses in the Southeast Asian markets next year. By 2025, Rivian hopes to have completed more than 300 electric vehicles, representing more than 200,000 passenger miles driven per year.
The company is hoping to use those numbers to become profitable by 2022. It is also offering up the opportunity for more VC funds to offer up their money for the SUV maker. Before it goes public, the company may consider mergers with other companies as well as buyouts and could start the process with Saudi billionaire Prince Alwaleed bin Talal and his investment vehicle Kingdom Holding Co. The prince owns a stake in Tesla Inc. and took a stake in Aspen Automotive Inc. The potential acquisition and the merger are being done for consideration, according to a source.