The Rivian IPO: An Update after the Launch

In Lochhead on Marketing episode 136, our own Al Ramadan unpacked the Rivian IPO through a category design lens with legend, Christopher Lochhead. Specifically, how Rivian was able to use their IPO not just as a financing event, but a category-defining event.

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Al and Chris recap what Rivian was doing during the public offering, which had a market cap of $60 billion at the time. This was already a very impressive number, considering that it was still an IPO.

What people didn’t anticipate is that after Rivian’s launch, they blew well past that and it now sits at over $100 billion in valuation. As a result, they are now the third largest automotive company behind Tesla and Toyota.

All in all, it is an incredible IPO, and one to observe in the future as it develops.

Betting on Potential vs Performance

Despite all that, there are those who are still skeptic of what had happen, and consider it as a fluke or a big risk. But it all boils down to betting on the potential of an idea, rather than just prior performance. Right now, some investors are seeing things in a new light.

“I think it’s hard for investors to understand because that’s been just been the way they are. They look at multiples of revenue or multiples of trucks shipped, or all of those other vital metrics within an organization. But the new investors I think, are starting to look past that.” – Al Ramadan

Paving the Way into a New Category

What Al finds interesting is that currently, 70% or more of the market cap for the electronic car category is cornered by Tesla. Yet Rivian might have to potential to great its own category within it, and be the category king for it.

Because Rivian is not just planning on the electronic cars and trucks. They are also including everything else that comes along with it. We’re talking charging networks and stations, dealerships, and the like. It’s taking into consideration the whole ecosystem, as supposed to just that one product.

“So if you go into this with the mindset of like, I’m going to value this as an automotive industry as it was over the last 125 years, you’re gonna miss big time.” – Al Ramadan

Lochhead on Marketing is the number one charting podcast for marketers, category designers, and entrepreneurs with a different mind.

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