A team of former SpaceX rocket engineers have joined the race to build the first commercial electric speedboat. The Arc Boat company announced it had raised $4.25m (£3m) in seed funding to start work on a 24ft 475-horsepower craft that will cost about $300,000. The LA-based company, which is backed by venture capital firm Andreessen Horowitz (an early backer of Facebook and Airbnb), said the first model of the Arc One boat would be available for sale by the end of the year. Mitch Lee, Arc’s chief executive, said he wanted to build electric boats because of the impact conventional petrol- or diesel-powered boats have on the environment. “They not only get just two miles to the gallon, they also pump a lot of those fumes into the water,” Lee said. “In addition, there is the huge noise pollution factor [of conventional boats] and that is awful for the marine life. With gas-powered boats it’s not just carbon emissions into the air, it’s also polluting the water and causing noise pollution. Electric boats eliminate all that.” Lee said electric vessels would also reduce the hassle of boat ownership. “I love being out on the water, being on a boat is so much fun, but owning a boat is so awful,” he said. “I have always believed that electric boats make sense. They will be quicker, quieter and way cheaper and easier to operate and maintain.” While the first models will be very expensive, Lee said the cost was mostly in developing the technology and cheaper versions would be available in the future. “It is very much the Tesla approach – we are starting up market and using that income to finance research and development and work our way down market,” he said. Lee said the technology could be applied to larger craft, and even ferries could run on electricity in the future. “We started in February with no team, no money and no warehouse,” he said. “By December we are going to be selling the Arc One, and we are hiring aggressively because we want to accelerate the adoption of electric boats across a whole range of craft.” Lee founded the company with fellow mechanical engineer Ryan Cook. Cook, the company’s chief technology officer, was previously the lead mechanical engineer at Elon Musk’s space exploration company SpaceX where he worked on the Falcon 9 rocket, the world’s first orbital class reusable rocket. Apart from Lee, all of Arc’s employees have some experience working at SpaceX. The Arc boat, which would have a top speed of 40 mph, joins a number of startups rushing to make the first large-scale production of electric-powered speedboats. The Monaco Yacht Club this month held a competition for electric boat prototypes to “instigate a new vision and promote all positive approaches to bring yachting into line” with global carbon dioxide emission reduction targets. Sweden’s Candela C-7 hydrofoil boat was crowned the fastest electric vessel. An international electric powerboat race competition is scheduled to start in 2023.