The UK-based EV startup Arrival garners $300 million and hopes to slow the financial bleeding. The automaker is still short to start the van production. It previously announced layoffs and cost cuts. Further, they are looking for raising even more, so the van production can start.
Arrival is a UK-based startup focused on delivering urban-centric mobility by way of its last-mile Arrival Van, although at one point the EV developer was soaring high in innovation, also developing an all-electric passenger bus and a rideshare-specific Arrival Car designed alongside Uber. Like many young startups, Arrival’s need for massive amounts of funding took its toll over time. Following its public offering via a SPAC merger in March of 2021, Arrival’s stock value has tumbled, leading to an announcement last summer that it would be reorganizing its business to focus solely on Van production, halting Bus and Car development.
By October of 2022, Arrival announced it was pivoting its EV business once again, shifting its focus to US production after citing significant costs to scale overseas and a less-than-stellar at-the-market (ATM) platform. The revised strategy mentioned the cutting of “cash-intensive activities,” including staff salaries, particularly “a sizable impact on the company’s global workforce, predominantly in the UK.”
Cost cuts
By November, Arrival president and chief of strategy Avinash Rugoobur resigned for personal reasons, and CEO Denis Sverdlov stepped down into a new role as chair of the board. Simultaneously, Arrival received a letter of compliance because its stock share was too low. The company has until May to get its stock over $1.00 to avoid being delisted. As of this morning, shares are listed at $0.148. Still, the startup fights on. Its former EVP of digital Igor Torgov will take over as company CEO in late January alongside the unfortunate news that it would be cutting its staff of 1,600 in half. Arrival hopes that these cuts alongside the funding announced today will help it stay liquid through 2023 while it tries to raise additional funding to reach scaled production.
While today’s funding news should be encouraging from those fortunate to remain on staff at Arrival, the EV startup is by no means out of the red yet and has a long road ahead of it to actually reach Van production. It is known that Arrival believes the $300 million in equity financing from Westwood Capital will help it hit its targeted cash burn rate of $35 million each quarter, at least by the second half of this year. That’s when much of the aforementioned cash cuts and layoffs will take full effect.
