Mate Rimac on Building an EV Company: Bootstrapping Lessons

The Remarkable Journey of Rimac Automobili

The origins of Mate Rimac’s company read like a modern automotive legend. Founded in 2009, Rimac Automobili began as a solitary endeavor in a garage.

This initial one-person operation has since expanded into a substantial enterprise, employing over 1,000 individuals.

The company now boasts supply agreements with major automakers, including Porsche, and is preparing for the production launch of its innovative electric hypercar.

Near Collapse and Early Struggles

Despite its current success, Rimac Automobili faced a precarious existence in its early years. Mate Rimac revealed during TC Sessions: Mobility 2021 that the company frequently teetered on the brink of financial ruin.

“For the first seven years, we were consistently facing cash flow issues and were, in effect, technically insolvent,” Rimac stated.

From Hypercars to Future Mobility

The founder and CEO of the Croatian electric hypercar and component manufacturer engaged with TechCrunch to discuss several key topics.

These included the unveiling of the new Nevera vehicle, his evolving interest in electric robotaxis, and the potential acquisition of Bugatti.

Throughout the discussion, Rimac offered a transparent perspective on the company’s most challenging periods, detailing how he and his team navigated these difficulties.

He also shared valuable insights intended for other entrepreneurs, drawing from his own experiences.

Lessons for Aspiring Founders

Rimac’s account provides a compelling case study in resilience and adaptability. His story highlights the importance of perseverance in the face of adversity.

The company’s journey from a garage-based startup to a globally recognized automotive innovator serves as an inspiration for those pursuing entrepreneurial ventures.

A Remarkable Journey

Currently, Rimac Automobili enjoys widespread recognition in Croatia and is actively pursuing further expansion. The company is presently constructing a substantial headquarters and advanced technology campus, encompassing 49 acres, with an anticipated completion date in 2023.

However, the initial years of Rimac Automobili were considerably more isolated. Despite eventually achieving acclaim, the company faced several near-failure scenarios, as Mate Rimac revealed in a recent interview.

Recent Developments

• The rationale behind Mate Rimac’s involvement in the development of electric robotaxis is being explored.
• Porsche has increased its ownership interest in Rimac Automobili.

The path to success wasn't always clear for Rimac. The company navigated a challenging landscape, overcoming significant hurdles to reach its present position.

This growth represents a substantial transformation from the early days, highlighting the resilience and innovative spirit of Rimac Automobili. The new campus symbolizes the company’s commitment to future technologies.

A Car Company Built From the Ground Up

The journey of many startups, particularly those focused on translating innovative concepts into marketable products, often involves extended periods without generating revenue. However, Mate Rimac of Rimac Technology emphasized that his company was compelled to produce income from its inception to ensure its continued operation.

Early Revenue Generation Was Key

Unlike businesses that can sustain themselves during initial development phases, Rimac’s venture required immediate financial viability. This necessitated a different approach to funding and growth.

Riding the Electric Vehicle Trend

Founders Ben Schippers and Evette Ellis are capitalizing on the increasing demand for electric vehicles (EVs). Their business model focuses on a growing market segment.

A Dual Focus: Sustainability and Profit

The core of their strategy involves extending the lifespan of EV batteries. This approach delivers both environmental benefits and financial gains.

Second Life for EV Batteries

By repurposing used EV batteries, Schippers and Ellis are addressing a critical sustainability challenge. This also creates a new revenue stream.

Key Takeaways

• Ben Schippers and Evette Ellis, the founders, are successfully navigating the expanding EV market.
• Their business model centers around giving EV batteries a second life, promoting both ecological responsibility and profitability.

The company’s success highlights the potential of innovative solutions within the electric vehicle industry.

The Unwavering Determination of Mate Rimac

Mate Rimac found it difficult to articulate the precise reasons behind his persistent dedication, even when facing the most challenging periods for his company.

He implied, however, that the significant investments and potential outcomes left little room for considering alternatives to continued progress.

A Relentless Pursuit

The core of Rimac’s approach appears to be a refusal to concede defeat. His statement, “You basically never give up,” encapsulates this philosophy.

This unwavering commitment was particularly crucial during times of substantial risk and uncertainty for the business.

The Weight of Expectation

It’s suggested that the considerable stakes involved – encompassing financial commitments and future prospects – inherently demanded a forward-moving strategy.

The pressure to succeed, therefore, likely played a significant role in sustaining his resolve and preventing him from abandoning the venture.

Resilience in the Face of Adversity

Rimac’s experience highlights the importance of tenacity in entrepreneurial endeavors.

Maintaining momentum, even when circumstances are unfavorable, can be a defining characteristic of successful ventures.

Diversification of Funding Sources is Crucial

In 2014, Mate Rimac successfully completed a Series A funding round, securing approximately $10 million. This capital provided the company with sufficient resources to continue operations until the end of 2015.

As the need for further funding arose, Rimac’s company attracted interest from multiple investors, and received preliminary term sheets from several parties.

Subsequently, a new investor emerged, presenting a seemingly advantageous opportunity with more substantial commitments and favorable conditions. A strong rapport also indicated a potentially beneficial partnership.

Mate Rimac recounts that the decision was made to forgo the existing investor group and pursue a deal exclusively with this single, new investor.

However, the negotiation process proved protracted, and ultimately, the investor was revealed to be fraudulent, as Rimac described.

Future Mobility Trends

• Analysts forecast that Mobility-as-a-Service (MaaS), on-demand delivery solutions, and electric vehicles (EVs) will be central to the future of transportation following the pandemic.

A Test of Resilience: The Rimac Concept One and The Grand Tour

The innovative spirit of Rimac Automobili was put to the ultimate test when The Grand Tour team arrived to evaluate the Concept One hypercar.

Mate Rimac initially reported a flawless five-day testing period. However, this positive trajectory was abruptly altered on the final day of filming.

The Incident

During a high-speed run, Grand Tour presenter Richard Hammond lost control of the vehicle, resulting in a dramatic crash.

The Concept One left the track at approximately 130 miles per hour and tumbled down a hillside for over 300 feet before igniting.

Fortunately, Hammond sustained only a knee injury, escaping the wreckage with his life.

Impact on Rimac

Despite Hammond’s survival, the accident and its immediate consequences presented a significant challenge for Rimac Automobili.

The incident pushed the company to its limits, demanding immediate response and assessment.

The event served as a stark reminder of the inherent risks associated with pushing the boundaries of automotive performance.

It highlighted the demanding nature of hypercar development and testing.

The crash underscored the fragility of even the most advanced engineering in the face of unforeseen circumstances.

The situation required Rimac to demonstrate both technical expertise and operational resilience.

The company’s ability to navigate this crisis would prove crucial to its future success.

The incident became a defining moment, testing the strength and resolve of the entire Rimac team.

It was a moment where the phrase “hardware is tough” took on a new, profound meaning.