One of the world’s biggest asset management funds, BlackRock, has agreed to invest US$118m (£91m) in Arrival, a British start-up which is aiming to carve out a slice of the lucrative commercial van market.
Arrival - which was set up in 2015 by Denis Sverdlov, a Russian entrepreneur - has already produced a prototype electric van which is being trialled by UPS, DHL and the Royal Mail.
BREAKING: New York-based BlackRock, the world's largest asset manager, invests $118 million (£91 million) in British electric vehicle manufacturer Arrival. The funds will be used to support the firm's growth plans as it ramps up production https://t.co/y7JF2vge8D #UKmfg #GBmfg— MTDMFG (@mtdmfg) October 14, 2020
Earlier this year two South Korean motor companies, Hyundai and Kia, invested $116 million (£90 million) to buy a three percent share in Arrival, valuing the firm at $3.5 billion (£2.7 billion).
Now New York-based BlackRock has come on board and will help fund the creation of a factory in South Carolina.
Arrival has another factory in Bicester, Oxfordshire and research sites in nearby Banbury and Reading.
The Bicester factory can produce 10,000 vehicles a year, which is a fraction of the output of a traditional factory, hence why it is being described as a microfactory.
But Arrival has big ambitions.
BlackRock has invested $118 million in UK electric van startup Arrival pic.twitter.com/VKMpoW7M07— Whole Mars Catalog (@WholeMarsBlog) October 15, 2020
On its website it says: "These microfactories, combined with proprietary in-house developed components, materials and software, enable the production of best in class vehicles that are competitively priced to fossil fuel variants."
Currently its electric van costs £36,000 ($46,500), which is much more expensive than an equivalent conventionally-fuelled van, such as the Mercedes Sprinter, which costs £25,000 ($32,000).
Mr Sverdlov, who set up Arrival using capital from the sale of his Russian mobile phone business, Yota, in 2012, said: "We are excited to welcome BlackRock as a strategic financial investor…This additional capital will be invested into Arrival’s growth, as we deepen and expand our presence in the US and other new markets globally."
Arrival says it has received an order for 10,000 electric vans from UPS.
On its website the company says: "This investment is a reflection of the significant market opportunity for electric vehicles, particularly in the commercial segment, which continues to grow with increasing demand for ecommerce and is predicted to reach eight million commercial and passenger fleets by 2030 in the US alone."