Arc

Arc closed a $70 million Series B in September 2023, bringing total funding to approximately $110 million. The Series B was led by Eclipse Ventures, with participation from Andreessen Horowitz, Menlo Ventures, and Lowercarbon Capital.

The company previously raised $30 million in a Series A round in November 2021, also led by Eclipse Ventures. Arc has also secured investments from celebrity investors, including Will Smith through Dreamers VC and Kevin Durant via Thirty Five Ventures, alongside traditional venture capital firms.

Eclipse Ventures has led both funding rounds, establishing itself as Arc's primary institutional backer as the company transitions from prototype development to production manufacturing.

Arc builds high-performance electric boats designed to replace traditional gas-powered recreational watercraft. The company manufactures three consumer models and has expanded into commercial applications.

The Arc One is a 24-foot aluminum day cruiser constructed using aircraft-grade techniques. It is equipped with a 220 kWh dual-battery pack that powers a 500-horsepower inboard motor, enabling top speeds of 40 mph and an all-day range at cruising speeds. Additional features include wireless charging, premium audio, and over-the-air software updates.

The Arc Sport is designed for the wake boat market, featuring a 23-foot fiberglass hull optimized for water sports. It utilizes the same 500-horsepower motor but incorporates a larger 226 kWh battery pack to accommodate ballast weight for wake generation. The boat includes joystick controls with thruster systems for precise docking and operates on an 800-volt electrical architecture that powers pumps and accessories continuously.

Arc Coast is the company's entry into the center console fishing boat segment, with a starting price of $168,000. Deliveries are scheduled to begin in 2026, marking the company's expansion into a broader market.

The company also develops commercial electric tugboat systems, collaborating with operators to retrofit existing vessels with Arc's battery-electric drivetrains and charging infrastructure.

Arc operates as a vertically integrated electric boat manufacturer, managing all aspects of production from hull construction to battery pack assembly. Boats are built to order through a direct-to-consumer model, with customers configuring and purchasing directly via Arc's website.

Revenue is primarily derived from boat sales, with margins enhanced through optional packages. Buyers of the Arc Sport model can select navigation, wake, and sound packages priced between $9,300 and $19,800 each, increasing average selling prices beyond base model levels.

The company designs and manufactures its own battery packs instead of sourcing complete systems from suppliers. This approach involves higher upfront research and development costs but achieves approximately 50 percent savings on material costs and improved weight optimization compared to off-the-shelf alternatives.

Arc's 800-volt electrical architecture distinguishes its boats by supporting high continuous power draw for accessories and enabling faster charging. Proprietary power electronics and thermal management systems create technical challenges that are not easily replicated by traditional boat manufacturers.

The business model incorporates software-driven features and over-the-air updates, similar to Tesla's strategy in the automotive sector. This approach fosters ongoing customer engagement and potential future revenue opportunities from software features and services.

X Shore, based in Sweden, competes in the premium electric boat segment with models starting at approximately $250,000. In 2025, the company raised $4.5 million to expand its Stockholm manufacturing facility and secured a commercial order for 32 boats from European dealers.

Candela specializes in hydrofoil technology, which reduces energy consumption by 80 percent compared to conventional hull designs. The company raised $40 million in Series C funding and partnered with Groupe Beneteau to scale production of both leisure boats and commercial ferries.

Navier produces 30-foot hydrofoil boats with a range of 75 nautical miles, targeting technology-focused customers through exclusive demonstration events and corporate partnerships. The company has initiated water taxi pilots in San Francisco Bay, competing for early adopters who might otherwise consider Arc's premium offerings.

Vision Marine Technologies and Evoy develop electric motors and battery systems designed for integration into existing hull designs by traditional boat manufacturers. These companies compete by enabling established marine brands to offer electric-powered options without requiring in-house propulsion system development.

Brunswick's Mercury Avator represents the traditional marine industry's response, utilizing existing dealer networks and service infrastructure to distribute electric propulsion systems. This strategy challenges Arc's direct-to-consumer model by making electric boats accessible through established marine dealerships.

Legacy boat builders such as Sea Ray, Boston Whaler, and Mastercraft benefit from extensive dealer networks, service infrastructure, and strong brand recognition within their respective markets. As battery costs decrease and electric propulsion becomes more widely adopted, these incumbents could introduce electric versions of popular models, potentially reducing the differentiation provided by Arc's technology.

Arc's transition from speedboats to wake boats has expanded its addressable market to include the 25,000 to 30,000 unit annual North American tow boat market. The Arc Coast center console model targets the largest segment of the U.S. recreational boat market, where fishing and day cruising boats account for over 60 percent of sub-30-foot powerboat sales.

The company's entry into commercial tugboats expands its TAM beyond the $4 billion to $5 billion U.S. recreational boat market. Arc has secured a $160 million contract with Curtin Maritime to produce eight hybrid-electric ship-assist tugs, with the first four slated for delivery by 2027.

Electrification mandates for harbor craft in California and other regions create a global retrofit and replacement market valued at over $15 billion. Arc's commercial partnerships provide access to this market as ports worldwide implement zero-emission requirements for working vessels.

Arc's initial West Coast customer base is growing through nationwide lake demonstration tours in North Carolina, Florida, and California. These events test the company's charging and service models across diverse water environments and customer profiles.

International port electrification mandates, particularly in European Union Tier III emission zones and major Asian shipping hubs, present export opportunities for Arc's commercial tugboat systems. California's clean port grant programs, valued in the billions, are being adopted as models by other jurisdictions, potentially driving global demand.

Collaborations with watersports athletes and demonstration events at major lakes connect Arc with the four million participants in the U.S. wake sports community. These customers typically replace boats every three to five years, creating recurring sales opportunities within this engaged segment.

Partnerships with commercial operators such as Diversified Marine and Curtin Maritime provide direct access to approximately 2,000 U.S. tugboat operators. These relationships allow Arc to scale its commercial sales without the need to establish dedicated industrial sales teams.

Battery technology: Arc's reliance on battery performance, weight, and cost improvements introduces significant risk, as these factors are not entirely within the company's control. Competitors gaining access to more advanced battery technology, or delays in Arc's custom battery development relative to industry standards, could quickly diminish its performance differentiation.

Manufacturing scale: Arc's vertically integrated model demands substantial capital investment and expertise across complex systems, including hull construction and power electronics. Established marine manufacturers with existing production capabilities and supplier networks may achieve comparable performance while benefiting from cost efficiencies tied to their scale.

Regulatory dependence: Arc's market potential is closely tied to environmental regulations mandating harbor craft electrification, particularly in California ports. Shifts in regulatory priorities, implementation delays, or successful lobbying efforts against emission mandates could materially reduce the addressable market for Arc's commercial tugboat systems.