business and had no expertise in automobiles but was actually a very strategic decision for the internet giant amazon spends billions of dollars every year on logistics one of the most expensive parts of delivering a package is the last mile historically amazon has outsourced most of its last mile delivery to third parties such as u.s postal service or ups in recent years they've been building up their own last mile logistics fleet where they will deliver the packages themselves by cutting out the middleman of usps and ups they can increase efficiency and dominate more of the value chain but if they want to be completely self-sufficient they will need hundreds of thousands or possibly millions of vans shortly after making the investment amazon signed a contract with rivium to purchase NUMBER_TOKEN NUMBER_TOKEN fully electric delivery vans by NUMBER_TOKEN. this was potentially a genius strategic move on the part of amazon with them being both the largest shareholder and largest customer of rivien they can collaborate to tailor the delivery van exactly to amazon's desired specifications from their perspective the few hundred million dollars they shelled out to buy their stake in riven is chump change compared to the strategic relationship which could be worth billions of dollars over the next decade just a few months later ford invested an additional NUMBER_TOKEN million dollars into the company at a valuation between five and seven billion dollars they originally planned to partner with rivien to develop an electric vehicle under their luxury lincoln brand however they ended up calling off the partnership in the spring of NUMBER_TOKEN due to uncertainty around the pandemic having raised more than a billion dollars from blue chip investors including amazon and ford rivian went full steam ahead on the development of their pickup truck in suv with a plan to launch both of them in NUMBER_TOKEN but they ended up delaying the launch multiple times blaming the pandemic and resulting semiconductor shortage they started making their first deliveries in october of NUMBER_TOKEN and by the time of their ipo they had delivered a grand total of NUMBER_TOKEN vehicles the majority of which were to rivien employees but regardless of this fact investors still decide this company should be worth more than NUMBER_TOKEN billion dollars and more than gm which delivered almost NUMBER_TOKEN million vehicles last year so who is so excited about rivian to bid its shares up so high surprisingly even arc invests kathy wood said rivien is overvalued and declined to buy shares wood made her name by buying high growth technology companies such as tesla when most analysts on wall street said it had ridiculous valuations the fact that even kathy wood won't buy rivien makes you wonder who is buying the shares they raised more than NUMBER_TOKEN billion dollars from their ipo most of this came from large long-term institutional investors including blackrock t rowe price and multiple sovereign wealth funds from around the world unlike amazon these investors have no strategic relationship with rivian and are purely buying the stock as an investment because they think it's undervalued but at a NUMBER_TOKEN billion valuation can this pre-revenue company really be undervalued tesla currently has a market cap of about NUMBER_TOKEN trillion dollars if rivien can eventually become the next tesla the stock could theoretically NUMBER_TOKENx from there and with a NUMBER_TOKEN NUMBER_TOKEN order from amazon they certainly have credibility the base case of rivien's valuation implies that they'll eventually have to grow into being at least within the same order of magnitude as tesla in terms of scale but
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