Rivian Spins Out $1B E-Bike and AI Startups to Fund Tech with VC Cash

Rivian Automotive is strategically spinning out its internal technology projects, including an e-bike division and an AI robotics firm, into new, externally-funded startups. This move, reported by Bloomberg, allows Rivian to monetize its engineering expertise and secure new funding without draining its own cash reserves as it races to launch its critical R2 SUV.

This strategy reveals the intense financial pressure Rivian faces. While rivals like Tesla fund ambitious side-projects like the Optimus robot internally, Rivian is essentially using venture capital to fund its “hobbies.” It’s a clever bet: if these startups—”Also” and “Mind Robotics”—succeed, Rivian’s tech is validated and its stake becomes valuable. If they fail, only the VCs lose.

“Also” E-Bike Hits $1B Valuation

The first spinout, a micromobility company named “Also,” reportedly began as a skunkworks project within Rivian. The venture has already raised money from Greenoaks at a staggering $1 billion valuation, with Rivian and Eclipse Ventures providing initial backing.

Also’s first product is a high-tech, powered bicycle called the TM-B, set to launch in 2026. It will start with a $4,500 model, followed by a $3,500 version. The e-bike features a complex “DreamRide” series-hybrid system where the pedals power a generator, which in turn powers the motor, rather than a traditional chain. The company also plans a four-wheel, pedal-assist quadricycle for commercial and family use.

“Mind Robotics” Tackles Physical AI

The second new venture, Mind Robotics, was driven directly by CEO RJ Scaringe. Its mission is to combine artificial intelligence and robotics to reshape manufacturing and industrial operations, starting with Rivian’s own factories.

Mind Robotics recently raised about $110 million in external capital, valuing the new startup at $340 million post-money. According to the report, Rivian itself contributed only “a few million dollars” but retains a small, strategic stake. The goal is to create “physical AI” systems that could have applications far beyond Rivian’s own production lines.

A Strategy Born from Necessity

This spinout strategy comes as Rivian continues to burn cash, cut costs, and focus all available resources on the 2026 launch of its lower-cost R2 SUV, which is widely seen as the vehicle that will determine the company’s long-term survival.

“Scaringe is funding his vision with someone else’s money, reducing Rivian’s risk,” Ludlow noted. “If those startups succeed, Rivian gains access to new markets and tech. If they fail, the losses are minimal.”

The tradeoff, however, is a potential dilution of focus at the most critical moment in the company’s history. The report draws a sharp contrast with Tesla, which is also pursuing robotics and other ventures.

“But Tesla is a different company, in every sense,” the report states. “It has far more scale, profit, cash generation, clout — and Elon Musk. So it can pursue all of these extracurriculars inside its own business.” Rivian, delivering fewer than 50,000 vehicles a year, does not have that luxury.

EVXL’s Take

This isn’t the first time Rivian has used its tech stack as a financial lifeline. The massive $5 billion partnership with Volkswagen was a similar move, validating its software and electrical architecture and, more importantly, securing a vital cash infusion. These spinouts are the next logical step: proving its engineering has value far beyond its own low-volume vehicle production.

The “Mind Robotics” venture is particularly interesting. While it sounds like science fiction, it’s a direct move into the “embodied AI” and industrial automation space that is exploding right now. As we’ve covered on our sibling site DroneXL, companies like DroneDeploy are already rolling out AI agents and ground robots to automate industrial sites. This isn’t just a “Tesla Bot” competitor; it’s an attempt to build a “robotics data flywheel” trained on Rivian’s own advanced manufacturing data—a concept we explored in the launch of 1X’s NEO humanoid robot.

The “Also” e-bike, however, carries significant risk. A $1 billion valuation for a pre-revenue e-bike company is classic venture capital froth. The e-bike market is notoriously difficult, and the complex, proprietary “DreamRide” system sounds expensive to build and service—a painful echo of the bankrupt e-bike maker VanMoof.

Ultimately, this is a savvy financial strategy to insulate the core company from risky R&D costs. But it’s also a clear admission that Rivian cannot afford to be Tesla. For Rivian’s survival, none of this matters if the R2 isn’t a runaway hit.

What do you think? Share your thoughts in the comments below.