Auto startup Rivian to become Nasdaq’s highest-valued startup

Rivian, maker of retro portable record players, self-driving cars and plans to automate your home, IPO’d in September

The deep-pocketed Rivian Automotive Group said Friday it will begin trading its shares on the Nasdaq exchange later in the day, becoming the US’s highest-valued startup.

The Anaheim, California-based company, which raised more than $750m in an initial public offering in September, will trade under the symbol RIV for more than $69 a share. It will also trade under “RVN” in Israel, where it makes its $3,000 portable speaker.

“From going from being a start-up to operating the highest valued public company in the US, let alone one of the most valuable in the world, the automotive industry is but one of many platforms where we are driving innovation for the masses,” explained Rivian’s CEO, Christian Stadler.

Since the company was founded in 2008, its growth has been meteoric: since 2011, its revenue has surged more than 300% to $634m, the company said in a regulatory filing with the US Securities and Exchange Commission.

But its rapid expansion hasn’t been without its setbacks.

Many of the people tasked with developing future vehicles for Rivian left the company during the transition. The company has also repeatedly put its development plans on hold, delaying a Cadillac partnership and putting all planned self-driving vehicle development in flux until it raised $150m last year from Saudi Arabia’s Public Investment Fund.

The company first announced a partnership with Cadillac in 2011, when it began developing a Cadillac-branded self-driving vehicle, but it later cancelled the deal when it was clear that none of the testing necessary to win insurance approval could be completed within a two-year window.

Rivian has also delayed the development of its Avion autonomous vehicle, which was originally planned to go into production by 2018. The company has not said if it still plans to do so.

Rivian plans to begin testing its autonomous prototypes in the fall, according to a report published in the San Francisco Chronicle in January.

Tech and startups continue to find gains on public markets. The median valuation of newly public companies reached more than $3.6bn in the first quarter of this year, up 17% from the same period last year, according to research from EY.

By comparison, luxury brands took an 81% dive and domestic names and companies classified as mid-market languished by 6%.

“Even though the US public market is small, it is still representative of the public market,” said Ellen Zentner, a New York-based IPO analyst for Nomura Securities International. “When a lot of the big tech names have had IPOs, it’s given a lot of room for companies that wouldn’t have had this type of valuations historically.”

The large tech IPO market may be waning in the US, though it does not mean other companies are getting a brighter go at it. The European Union’s withdrawal of tax breaks for the industry reduced the number of European IPOs by 30% this year, according to Bloomberg.

Companies also appear to be piling on capital raising rather than following the money to a lucrative IPO, suggesting that early success in an IPO may not translate into a sustained boost in investors’ fortunes.

The boom may be over for Rivian, at least for now, as the company said in its filing that it expects its growth to slow. It has narrowed its revenue and net income forecasts for this year, and it lowered its forecast of 2019 revenue to $1.1bn.

Those numbers place the company at the lower end of the $1.5bn to $1.8bn revenue range it previously indicated would be feasible.

“While Rivian’s future is bright,” the company said in its filing, “the outlook for the US consumer auto market remains challenging.”

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