Rivian IPO: Everything you need to know about Rivian

What happened on the day of Rivian's IPO?

The Rivian IPO occurred on November 9 2021 on Nasdaq. The company priced 153 million shares at $78 a share to raise $11.9 billion, for a valuation of some $66.5 billion. The pricing was above the initial target range of $72-74.

The company had filed paperwork with the Securities and Exchange Commission to become a publicly-traded company on September 1. In preparation for the transaction, Rivian worked with advisers including Goldman Sachs Group Inc, JPMorgan Chase & Co, and others.

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What's happened to Rivian shares since listing?

After the Rivian IPO, the company's shares accelerated sharply upward - after a week they were trading at $172, which is a 120% increase from its $78 opening price. However, over the last 8 months, Rivian shares have had an equally dramatic fall. They currently go for just over $26 each - 66% lower than its IPO price. 

The company doesn't have any cash flow or earnings for us to look at to assess whether the new price tag makes it attractive. But, it's not unusual for high growth companies to have higher price-to-earnings ratios. 

Shareholders and management believe the outlook is still positive for Rivian shares. 

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How much is Rivian worth?

Rivian was worth some $66.5 billion based on its initial pricing of $78 a share as of November 9 2021. However, the company's market capitalisation now sits at less than half that price, at $23.66 billion. 

Prior to the IPO, the company's valuation sat around $27.6 billion as of July 2021, based on its $2.5 billion fundraising round that month. 

What does Rivian do?

Rivian is a California-based electric car (EV) and automotive technology manufacturer, with a factory located in Normal, Illinois, and other facilities in the US, as well as an outpost in the UK.

The company was started in 2009 by Florida-born mechanical engineering graduate Robert ‘RJ’ Scaringe. Initial debt finance fuelled early-stage plans for a gas-powered sports car; but after pivoting and spending four years developing a coupe EV, Scarange saw a gap in the market instead for an electric truck and SUV.  

Years of planning and prototype development followed. Scarange bought a former Mitsubishi plant in 2017 for production, and Rivian secured $200 million more of debt in 2018 for development and testing of the company’s seven-seater R1S and the electric pickup truck R1T, equipped with camper-friendly features such as a pull-out kitchen and rooftop tent. The models were finally unveiled at the Los Angeles Auto Show in 2018, which was the springboard to the funding spree the company attracted the following year.

In 2019, Rivian was able to raise several substantial equity rounds, with Amazon leading a $700 million round in February 2019, Ford a $500 million round just two months later, and investment giant T. Rowe Price a $1.3 billion round at the end of the year. Amazon said it was ‘inspired by Rivian’s vision for the future of electric transportation’, and itself ordered 100,000 vans to be delivered by 2030.

An additional round of $2.5 billion in 2020, again led by T. Rowe Price, prepared the company to roll out its models for the following year.

The latest round of funding before the planned IPO saw the company raise $2.65 billion in January 2021, for the continued development, production and delivery of its vehicles, as well as building a vehicle charging network.

In 2020 Rivian had projected delivery of 20,000 vehicles in 2021 and expected to double that figure for 2022. This would have meant a potential $1.4 billion and $2.8 billion in sales respectively.

However, in its more recent S-1 filing released in September, Rivian stated that it has more than 48,000 preorders for its R1T pickup and R1S SUV. For Amazon alone it has projected delivery of 10,000 vehicles by 2022.

Rivian has in excess of 9,000 employees as of October 2021.

Who are Rivian’s competitors?

Rivian’s main competitors will be the likes of Tesla, Lucid, and traditional automobile manufacturers that decide to adapt more to the EV space. Specifically, the Rivian R1T will be going up against the Tesla Cybertruck and the Lucid SUV, among other models such as the Nikola semi truck offerings. The R1S, with a base price of $70,000, will come in less expensive than the latest Tesla Model X at a base price of $89,990.

China is also an important part of the EV conversation, with Nio manufacturing the ES8 SUV that currently is only being sold domestically, but could be set to expand distribution at some point overseas. The Shenzen-based BYD, backed by Warren Buffett, is another company to watch out for in the space, as well as Xpeng Motors.

How does Rivian make money?

Rivian will make money through sale of its range of EV automobiles. At present the company offers only two models, with the R1T starting at around $75,000, and the R1S. The pre-order launch editions of the two vehicles sold out at the end of 2020.

What is Rivian's business strategy?

Rivian’s business strategy is centred on setting itself apart from other EV names through its focus on SUV and pickup offering, with plans to deliver smaller models of its R1T and R1S for the Chinese and European markets.

The company has also revealed its intention to produce more range per battery charge than existing electric cars, with its 180 kWh pack reportedly set to deliver 410 miles of range for the 2022 R1T. The company also looks to expand its production with a potential plant earmarked for Europe that would help fulfil the Amazon order.

Developing surrounding EV technology is also a key part of the strategy. Fast-charging stations are in the pipeline, which will be located not only on highways but also in such places as hiking trails, parks and various off-road spots.

Those trading Rivian shares will be well advised to keep an eye on the offerings from GM and other competitors listed above, to see how its strategy to dominate the heavy-duty truck part of the EV market unfolds.

Is Rivian profitable?

Rivian is not currently profitable; deliveries of its pickup truck are in their early stages still. As with many heavily-backed companies of this type, outgoings so far have been considerable, with the business comfortably having moved into ten figures of outgoings. More than $1 billion has been invested in its factory alone.

Who owns Rivian?

The ownership of Rivian is split between a range of companies, such as Amazon and Ford, individuals, such as founder RJ Scaringe, and financial institutions such as T. Rowe Price and Soros Fund Management. The exact equity split is not currently in the public domain.

Key personnel of Rivian

• Robert J. Scaringe – Founder/Chief Executive Officer
• Rod Copes – Chief Operating Officer
• Claire McDonough – Chief Financial Officer
• Jiten Behl – Chief Growth Officer
• Helen Russell – Chief People Officer
• Nick Kalayjian – Executive VP, Engineering
• Nick Mulholland – VP, Communications