Amazon, Ford Among the Big Winners in Rivian's IPO

Rivian, the Amazon-backed electric vehicle startup, exceeded even its expectations as it hit the public markets Wednesday at a value of nearly $70 billion. Late Tuesday, the company announced it would set the price per share at $78, above even the revised range of $72 to $74 per share it said in a Securities and Exchange Commission filing on Friday.

Morgan Stanley MS, Goldman Sachs GS, and J.P. Morgan JPM were the lead underwriters. Rivian plans to offer 153 million shares to the public.

In its regulatory filing, Rivian RIVN said it lost $994 million in the first six months of this year and has yet to turn a profit. 

Many have compared Rivian to Tesla TSLA, but with the fortunes of the company likely hinging on the success of its electric delivery van rather than its pickup truck (R1T) or SUV (R1S), it is dissimilar to Tesla in that Rivian's future relies on its commercial products, not its consumer products.

The R1T and R1S are nice projects for the company (Rivian has said it will deliver 1,000 R1T vehicles by the end of the year and has orders for about 41,000) and are spurring the development of the Rivian Adventure Network, which is a chain of electric charging stations for outdoor enthusiasts, but its contract with Amazon for 100,000 electric delivery vans by 2030 will drive the real success of the firm.

Amazon AMZN has invested nearly $1.3 billion in the startup of the nearly $10.5 billion raised to date and has been testing Rivian vans since March in the San Francisco area. The vans, which feature a 150-mile range on a single charge, three levels of shelving with a bulkhead door that can be opened and closed for additional driver protection while on the road, and a suite of highway and traffic assist technologies are being driven by Amazon employees.

Related:

Read: A San Francisco treat: Amazon testing electric Rivian vans

Read: Rivian considers Texas, Arizona for $5B electric vehicle plant

Rivian is expecting to pull around $11.9 billion for operations from the IPO, but there are a number of well-known companies that are going to really benefit.

Amazon is the largest shareholder in the electric vehicle company with nearly a 20% ownership stake. That amounts to approximately 160 million shares that are worth around $12.5 billion now. The etailer is also the biggest booster of Rivian, having already ordered 100,000 of the company's electric vans with plans to have 10,000 on the road by 2022 and the remainder by 2030. Some reports have said that number could rise significantly in the years to come.

Amazon is not the only company that is poised to benefit from Rivian's fortunes. According to Pitchbook data, Ford Motor Co. F holds a 14.4% stake worth around $8 billion and Cox Enterprises business unit Manheim has a roughly 5% stake worth $3.1 billion. T. Rowe Price, with 133.67 million shares at a value of about $3.1 billion, and Global Oryx Co., with 113.93 million shares at a value of $8.9 billion, are also poised for big paydays.

"Now these backers all stand to make huge fortunes on paper with Rivian," Pitchbook wrote in an analysis of Rivian's backers. "They're involved not just for financial returns but because they're all auto industry veterans strategically trying to cement their position in the industry of the future."

Click for more articles by Brian Straight.

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