GM takes a stake in electric boat startup Pure Watercraft

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General Motors told CNBC that this year General Motors, which claims to be “going all out for electrification,” has acquired a 25% stake in Seattle start-up Pure Watercraft, which makes marine electric outboard engines.

The Pure Watercraft engine uses lithium-ion batteries instead of 40 to 50 horsepower burning gasoline or diesel outboard engines. Traditional fuel-powered ships can cause environmental problems, including noise pollution, smog, and water pollution. These problems are obvious when they float on the water in their wakes. Pure’s system is quieter and cleaner.

For Pure Watercraft CEO Andy Rebele, a lifelong fishing and boating enthusiast and former rowing instructor, the personal drive to solve these problems is accompanied by huge market opportunities.

According to data from the National Marine Manufacturers Association (NMMA), the sales of outboard engines in the United States reached a record level in 2020, increasing for the ninth consecutive year, reaching an estimated US$3.4 billion.

“Since World War II, the boating market is growing at an unprecedented rate,” Rebele said. “During the pandemic, people want to do things with their families and bring their pods. Hanging out is one of the most ideal things.”

General Motors is also paying attention to this growing market. CEO Mary Barra hinted at GM’s interest in electric marine transportation in a blog post in October, discussing the company’s Ultium battery and Hydrotec fuel cell platform.

The pontoon is powered by Pure Watercraft’s all-electric outboard engine.

Courtesy: Pure boat

According to Rebele, the total value of the transaction with General Motors is US$150 million, including in-kind payment commitments and capital invested by auto giants. The company did not disclose the difference between cash and in-kind payments.

The two companies told CNBC that through the investment, General Motors will become a component supplier for the new product co-developer Pure Watercraft, and will provide engineering, design and manufacturing expertise to help the startup build a new factory.

Rebele said that with the development of Pure Watercraft, its new partnership with General Motors should help the startup to solve supply chain problems.

For General Motors, the investment in Pure Watercraft is another step in a series of initiatives to expand its battery and fuel cell systems beyond automobiles. Earlier this year, General Motors announced plans to develop and commercialize a Westinghouse Brake Electric Locomotive. It also expressed interest in using its batteries and fuel cells for aerospace and military applications.

Pure Watercraft’s post-investment valuation is $600 million. The 55-employee startup has previously raised $37 million in venture capital.

– Mike Wayland of CNBC contributed to this report.


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