Photo: VCG

Rivian Automotive, which is backed by Amazon.com, is targeting a valuation of more than $53 billion for its US debut, making the electric vehicle (EV) manufacturer potentially almost as valuable as rival Honda Motor.

The start-up is looking to raise up to $8.4 billion, setting it up to be the third-largest IPO by funds raised in the past decade in the US.

Only three other companies have raised more than $8 billion while going public since 2011, according to data from Dealogic.

Alibaba raised a record $25 billion in 2014, Meta Platforms garnered $16 billion in 2012, while Uber made $8.1 billion in 2019.

Since 2020, companies in the EV sector have emerged as some of the hottest investments, especially among special purpose acquisition company investors on the hunt for the next Tesla.

While Rivian has yet to sell any significant volume of its electric vans or trucks, it could be valued higher than Ferrari, although less than Honda, General Motors  or its backer Ford Motor Co.

Founded in 2009 as Mainstream Motors by R. J. Scaringe, the company changed to Rivian in 2011, a name that is derived from "Indian River" in Florida, a place Scaringe frequented in a rowboat as a youth.

The start-up has been investing heavily to ramp up production, including for its upscale all-electric R1T pick-up truck, which was launched in September, beating out competition from established rivals such as Tesla, General Motors and Ford.

Rivian, which disclosed nearly $1 billion in losses for the first half of this year, had about 48,390 pre-orders for its pick-up trucks and R1S sport utility vehicles (SUV) in the US and Canada as of September.

It is pursuing a two-track strategy: building electric delivery vans for Amazon and developing an electric pick-up and SUV brand aimed at affluent individuals.

Amazon, which disclosed a 20 percent stake in Rivian at the end of October, has ordered 100,000 of its electric delivery vans as part of the e-commerce giant's effort to cut its carbon footprint.

Ford holds more than a 5 percent share in the EV start-up, according to a filing with the US Securities and Exchange Commission.

Stiff competition

Rivian, which confidentially filed paperwork for an IPO in August, will, however, face tough competition from automakers in the consumer and commercial van markets.

Ford said last week it has more than 160,000 orders for its F-150 Lightning electric pick-up truck and that an electric version of its Transit commercial van is "completely sold out."

General Motors is gearing up production of electric delivery vans, SUVs and pick-up trucks.

Rivian said it would sell 135 million shares at a price range of between $57 and $62 each. Reuters reported in September that it could seek a valuation of nearly $80 billion and raise up to $8 billion in its US listing. 

Morgan Stanley, Goldman Sachs and J.P. Morgan are the lead underwriters. Rivian will list on the Nasdaq under the symbol RIVN.

Reuters