Electric boating insiders react to Pure Watercraft’s demise as court documents reveal sell-off details

More than three months into the process of liquidating the assets of Seattle-based electric boat company Pure Watercraft, the firm in charge of that effort is seeking buyers for a variety of materials and parts of the business. But as the high-profile startup sinks, electric boating backers and executives remain enthusiastic about the market as a whole.

Founded in 2011, Pure Watercraft raised $37 million and attracted backing from General Motors, which acquired a 25% stake in the company in November 2021 in a cash and payment-in-kind stake that cost the automaker $150 million.

Even with a major investment and the launch of a Pure Pontoon boat meant to disrupt the $44 billion global leisure boating industry, the company ran into financial troubles and was placed into receivership on July 19. The legally appointed trustee for Pure’s assets is Bellevue, Wash.-based Turnford Consulting.

Documents filed in King County Superior Court this month (see below) detail Turnford’s efforts to liquidate millions of dollars worth of assets — everything from boat parts and lithium battery cells to service vans — to satisfy creditors and address liabilities.

Operations at Pure’s headquarters facility at the north end of Lake Union in Seattle have ceased, according to the documents, with all valuable and hazardous materials relocated or disposed of. A facility south of Seattle in Tukwila remains operational. Pure shut down a multi-million manufacturing facility in West Virginia where it planned to build “the next generation of boats,” and court documents reveal that access to that space “is being denied by the landlord” and complicating liquidation efforts.

Other highlights in the court documents include:

• The company, which employed more than 100 people at its peak, has reduced payroll by approximately 70%. Key staff members have been retained to increase value for potential buyers, because they “represent the enterprise knowledge base which is required to realize the value of the company IP.”
• There are at least nine potential buyers interested in Pure assets, particularly the pontoon boat business, with two buyers wanting to resume operations in West Virginia. Meanwhile, the sale of 750,000 lithium battery cells faced challenges due to market fluctuations and regulatory changes. A sale was eventually arranged in late September.
• The sale of about 100 rigid inflatable boats, which Pure powered with its electric outboard motors, and about 10 service vehicles has run into roadblocks as offers have been below expected market value.
• Pure’s insurance portfolio and a company payroll service, which included an employee healthcare plan, all expired in September.

Financial details in the documents show that from July 19 to Sept. 30, approximately $976,000 was collected, mainly from asset sales. Distributions amounted to about $506,000, with expenses including payroll, insurance, and other fees.

It’s unclear what all led to Pure Watercraft’s abrupt downfall. Founder and former CEO Andy Rebele has declined to discuss what happened, and GeekWire has also reached out to Turnford Consulting. A representative for GM previously told GeekWire that it was “unfortunate to hear about Pure Watercraft’s recent difficulties,” but that the automaker’s work to help accelerate EV adoption would continue and “remains as strong as ever.”

Others in the electric boating space are not cheering the demise of a competitor, because the industry needs multiple success stories to speed consumer adoption. David Donovick, president and COO of Seattle-based Zin Boats, said it was a “bummer,” but he wasn’t concerned about any bigger headwinds or investor fatigue around e-boating. He called Pure’s circumstance a “one-off failure.”

“In any category, including cars, you’re going to have a few companies that won’t make it,” Donovick said. “Tesla made it. Fisker didn’t. This is not a new phenomenon.”

Jon Roskill, a Microsoft vet who is also the former CEO of business technology company Acumatica, sits on the board of Swedish e-boat company X Shore. He said he liked the position Pure carved out for themselves going after the electric pontoon segment. But he said bankruptcies, including among car companies, point to an EV industry that got ahead of itself a bit.

“Any companies going bankrupt right now is more a factor of believing in an unrealistic ramp and creating a cost structure that the fundraising couldn’t sustain,” Roskill said.

A year ago, Los Angeles-based electric boat startup Arc raised $70 million and the company is looking to make a splash in the sport-boat category with a $258,000 model for wakeboarding. Rhode Island-based Flux Marine was reportedly raising $50 million this summer to ramp up production of its electric outboard motor.

Stephen Petranek is one of the backers of Flux Marine, and he believes all boating will become electric.

“The fund I am operating partner of, Ocean Zero LLC, considered long and hard an investment in Pure Watercraft,” said Petranek, a longtime journalist-turned-climate-impact-investor. “I decided in the end to pass, but I was impressed by the CEO and what he was trying to do. There were some decisions they made that caused them problems down the road, but the attempt was noble.”

Zin Boats’ Donovick said Pure was simply “mismanaged” and that it’s a blip in an otherwise growing market category that’s still in the early stages.

“We need more boat bros, less tech bros, because building boats is hard, there’s just a lot of additional engineering considerations that you have to account for,” he said. “I think the most successful companies will marry the two — strong technologists with strong boat builders. That’s going to be the winning formula.”

See below for a report from the receiver on ongoing efforts to liquidate Pure Watercraft’s assets:

Pure Watercraft receivership report by GeekWire on Scribd