Lit Motors Gets Funding From Mark Pincus And Surfer Kelly Slater

Posted: Mar 6 2014, 4:14am CST | by , in News | Cars & Vehicles
Updated: Mar 6 2014, 4:16am CST

 

Lit Motors Gets Funding from Mark Pincus And Surfer Kelly Slater
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Lit Motors’ much-hyped C-1 prototype lies in pieces in the back of the startup’s South of Market offices in San Francisco. With green and red wires protruding and the doors taken off the frame, the enclosed, electric two-wheeled vehicle is a shell of what it was a year ago. Back then, it was awing spectators on a gyroscope-balanced test drive down a musty city alley across the street.

Despite gutting his science project-cum-business, Lit Motors CEO Danny Kim is optimistic. The company is closer than ever to having a fully-functioning vehicle, he says, and now they have a little money to get them there.

In an exclusive with Forbes, the much hyped vehicle builder announced that it had closed a $1 million seed round with an eclectic set of investors who range from billionaires Mark Pincus and Kim Jung-Ju to world surf champ Kelly Slater. Total funding in the company now totals just over $2 million, a small, but workable amount of capital that will enable the company to piece together a more functional C-1 model by the end of March, according to its founder and CEO.

“[The funding] is basically enabling us to hire a full engineering team and build a brand new driving prototype–a high-speed driving prototype that will be able to fully execute the full driving experience,” says Kim.

To that end, Kim has found investors, though not the ones in khakis and button-up shirts, whose venture capital firms line Menlo Park, Calif.’s famed Sand Hill road. Instead, he’s assembled icons of what he’s termed “California culture,” heroes from his youth like action sport entrepreneurs Damon Way and Steve Rocco, both of whom skateboarded to the office for an informal meeting of investors late last month. Also present was Slater, and Yves Béhar, chief creative officer at Jawbone who’s signed on to be a design advisor as well as a backer.

“If this works, it is a non-incremental jump into another form of transportation,”says Béhar. “When I came [to the offices] what impressed me about what Danny and his team were doing was how much they were doing with so little.”

That’s come to define a company whose final product has to be so much more than an app on a smartphone. With only $1 million from friends and family to start, Kim and his team built the first C-1, an electric, self-balancing motorcycle that can carry two passengers in an egg-shaped cockpit. That initial build-out could only do straight-lines at a generous 10 miles-per-hour.

A year on, the Lit Motors CEO say the new tranche of funding will get them to an 100 mile-per-hour model that will be able to do 45-degree banked turns–he just needs to put it together first. Currently the vehicles components, from in-house built gyroscopes to steel wheel frames, are spread out across the office’s floor, ready to be pieced together. Assembly though, seems like an after-thought, as Kim seems convinced that he’s done the necessary calculations to get everything to work once the new C-1 is intact.

That’s probably what Lit’s early believers are hoping to hear. The company has has about 850 people place pre-production orders, with some already agitating for the finished product.

“Most people don’t understand product development, especially not vehicle development,” says Chief Marketing Officer Ryan James. “We get emails like, ‘Why haven’t your released the vehicle already?’ As if we’re sitting on something that we wouldn’t release.”

Now at 20 full-time employees, Kim says his company is working around the clock to get something that is ready for production within eight months. They’ve put a scooter side project, which has a failed Kickstarter experiment, “on the horizon” as Kim put it gently and are now completely focused on the C-1. That’s a smart move in a space where the lessons of failures like Aptera and Fisker leave little room for distraction.

“It seems like a logical step for me in terms of transportation,” says Slater, who admits he put a payment down for one of Aptera’s promised three-wheeled electric vehicles. That dream never came to fruition and the company went bankrupt.

“When they said they were going to have a car in 2009, that didn’t happen,” he remembers. “And they were like 2010 for sure, and that didn’t happen. Then they lost me and I stopped paying attention.”

Attention is something that Lit Motors can’t afford to lose. And now with billionaire backing from Zynga cofounder Mark Pincus–a friend of Béhar’s–as well as the inclusion of Korean rich lister Kim Jung-Ju, Kim does not seem too worried about the future.

“We’re going to be raising in the next round or two, $20 million to $40 million pretty easily just to get to production,” he says. “There’s no way around it… but if you have a billionaire helping out in the seed round, with the [Series] A round that’s just a drop in the bucket.”

Follow me on Twitter at @RMac18 or email me at rmac@forbes.com.

Source: Forbes

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