Amazon Reveals 20% Stake in Rivian Ahead of IPO

Amazon's Significant Stake in Rivian Revealed

Amazon announced on Friday its ownership of a 20% equity stake in Rivian, the electric vehicle manufacturer currently undergoing an initial public offering (IPO) process.

Investment Details and Growth

According to a recent filing, as of September 30th, the e-commerce company’s investments in Rivian, including preferred stock, equated to approximately 20% ownership. This holding is recorded at a “carrying value” of $3.8 billion, representing an increase from the $2.7 billion valuation as of December 31, 2020.

The disclosure within the regulatory filing offers further clarity regarding the strong relationship between Rivian’s prospects and Amazon’s involvement.

Financial Commitments

Amazon has already invested $1.345 billion directly into Rivian, as detailed in the EV maker’s IPO documentation. Furthermore, a recent purchase of $490 million in convertible notes is expected to translate into Class A shares following the IPO, contingent upon specific pricing conditions.

Beyond Investment: A Key Customer

Amazon’s relationship with Rivian extends beyond financial investment; the company is also a significant customer.

An agreement established in September 2019 stipulated that Rivian would manufacture 100,000 electric delivery vans for Amazon. Rivian anticipates delivering a minimum of 10 vehicles in December 2021, with the remaining 99,990 vans scheduled for delivery by 2025.

Prominence in Rivian's IPO Filing

The importance of Amazon to Rivian was evident when the initial IPO filing became public. The name Amazon appeared 81 times within the Rivian S-1 filing, a substantial number reflecting Amazon’s dual role as both investor and customer.

Initial estimates suggested Amazon owned at least 5% of Rivian, but this latest disclosure confirms a considerably larger stake.

A Double-Edged Sword

As previously highlighted, Rivian’s close ties to Amazon present both opportunities and potential risks. The company’s S-1 filing includes a section outlining risk factors related to this dependence.

This strong connection to a single major partner could influence Rivian’s future operations and market position.