On a gloriously sunny day, I took Silicon Valley’s latest status symbol, a 23-foot, $258,000 electric wakeboarding boat, for a spin across Sausalito’s Richardson Bay. At 30 mph, the boat sliced effortlessly through the water, leaving a trail of frothy white foam in its wake. And yes, I did doughnuts, just for the hell of it.
The throttle was crisp, responding instantly as I weaved around stand-up paddleboarders and harbor seals. At low speed, it was eerily silent, with just a low vibration from the motor, though at full throttle, the wind and water drowned out the quiet.
“We’re delivering better boats to people,” said Mitch Lee, the 35-year-old CEO and cofounder of Arc, who has raised a reported $137 million to bring his super-silent extreme aquatic vision to life. “We’re not trying to invent augmented reality or crypto. We have a compelling mission and a really fun product. Gas boats are so noxious and noisy; electrifying them just makes sense.”
It’s no secret that gas-powered boats are an environmental nightmare — pollutant levels in busy marinas can be up to 100 times higher than in boat-free waters. But there are reasons many electric boats aren’t silently sailing the seas; namely, battery limitations, lack of charging infrastructure, and the high cost of materials.
This is changing, said Lee, thanks to breakthroughs in electric car technology. “Money was flowing into Rivian and Fisker, and we took advantage of that electric automotive R&D,” he said.
In 2021, the electric boat market was valued at $5.1 billion. When you couple that with the global wakeboarding market, which hit $1.64 billion in 2022, you start to see the synergy. (It doesn’t hurt that Mark Zuckerberg is a big wakeboarding stan.)
Zuckerberg is exactly the type of customer Lee is targeting, being that no one — literally no one — needs a wakeboarding boat that runs upward of $300,000 once you include the cost of a charger, trailer, cover, and taxes.
Lee touts the cost savings involved with electric boat ownership, given that you can recharge it for around $65, versus the $335 it costs to fuel a 67-gallon outboard tank with diesel at $5 a gallon. But if you’re dropping $300K on a boat, you’re likely not concerned with fuel costs.
And the wealthy wakeboard market is real, and real excited. Lee would not reveal if Zuckerberg has placed an order, but one Friend of Zuck, former Facebook executive Dave Morin, is an investor who has extolled the joys of the Arc on the podcast he hosts with fellow FoZs, Jessica and Sam Lessin. His partner, Brit Morin of Brit + Co and Offline Ventures, also took the boat for a spin. “You can surf this crazy wave on it,” she said on the podcast. “It was insane.”
The Arc Sport 15-seater boat is priced competitively for the luxury market and packed with tech touches. It features a retractable hardtop that doubles as wakeboard storage and three HD cameras strategically placed for capturing rides for social sharing and to analyze boarding prowess.
Hidden speakers pump out tunes, and the giant, Tesla-like touchscreen control panel gives real-time readings of boat speed and water depth and temperature, as well as a cruise control setting. Also like Tesla, Arc provides over-the-air software updates.
The absence of a gas engine means the wakeboarding experience is cleaner — no foul fumes in your face as you balance on the board. An intelligent ballast system, featuring “wake-shaping technology,” sculpts the ideal wake, letting riders adjust the height, width, and position of their wave. The boat even stores riders’ profiles, remembering their preferred settings.
An overnight charge via a Level 2 electric charger — commonly installed at residential buildings — provides four to six hours of juice. “People aren’t trying to go on road trips on boats,” Lee said. “That’s enough for most use cases.”
While that limitation might bother hardcore boaters, it hasn’t hurt pre-orders, said Lee. Early buyers include Jonathan Coon, the founder of 1-800-Contacts and CEO of Impossible Ventures; Tom Shields, the San Francisco-based CEO of Eridani Ventures; and Shawn Carolan, a venture capitalist at Menlo Ventures, ranked No. 75 on the Forbes Midas List, who was part of Arc’s Series B. “I know the pain of gas boats — the breakdowns, the refueling, the noise,” said Carolan. “My gas boat breaks down every third time I take it out.”
As part of his due diligence, Carolan took the boat for a wakeboarding session on Lake Tahoe. “It accelerates really fast to get you out of the water,” he said. “I felt very stable in the wake and was getting plenty of push, to the point where I tried a backflip.” He watched his trick back on the Arc’s screen. Soon, clips like that will be accessible via the Arc app, Lee notes.
The genesis for Arc came from Lee’s love of watersports, he said. Growing up in San Jose, he spent most weekends on the water. He worked at Boeing as an engineer before joining Y Combinator in 2017 with a personal finance app, later acquired by Intuit. “My two great passions are financial literacy and wakeboarding,” he said.
Lee used the buyout to fund Arc, co-founding it with Ryan Cook, a former SpaceX engineer whom he met at Northwestern University. In a year, they developed a proof of concept, releasing the $300,000 Arc One, a limited-edition electric pleasure cruiser. They used that experience to build out their “mass-market boat,” the Arc Sport.
The biggest challenge was designing a battery that was powerful enough to propel the boat but lightweight and cost-effective, said Lee. To reduce costs, they decided to build their battery packs, powertrain, and other systems in-house, which also helped speed up development.
Arc isn’t alone in the electric wakeboarding space; Swedish company X Shore and Florida-based Nautique are also vying for a slice of the market. But Lee sees his real competition in gas-powered boats, which command 98% of the market.
Like Ed Kearney, who developed the Valo, an electric hydrofoil jetski I drove this summer, Lee sees the luxury market as the quickest path to adoption. “The fact that we can do this interview on the boat and you can hear me is a game changer,” he said. “The idea came when I saw a Tesla for the first time.” (Yes, he drives a Tesla.) “It just made sense for boats.”
Carolan has already future-proofed his dock in Lake Tahoe for his Arc Sport, which is set to be delivered next summer. “I put a 240-volt charger there, so I can charge my Tesla and my boat. It feels like the future.”