Wednesday, 1 June 2022

SoftBank and Goldman Sachs Invest €500 Million in Rimac Group

June 1, 2022 - Rimac Group received an investment of half a billion euros from SoftBank Vision Fund 2 and Goldman Sachs, which raised the value of the company to more than two billion euros. According to Mate Rimac, they will employ 700 people by the end of the year.

Rimac Group announced that EUR 500 million of investments were collected in investment round D, which exceeded the total market value of the company by 2 billion euros, reports Telegram.hr. Those 500 million euros is the largest investment so far, and a larger sum than all the investments the company has attracted. The key investors in the new round are SoftBank Vision Fund 2 and Goldman Sachs Asset Management, with the participation of existing Rimac Group shareholders, including Porsche and InvestIndustrial.

The company’s founder, Mate Rimac, still has the largest stake in the company, while the Rimac Group has a majority stake in Bugatti Rimac with a 55 percent stake. The other 45 percent is owned by Porsche. With the recent spin-off, Rimac Technology has become a fully independent company wholly owned by the Rimac Group. Rimac Technology is known for being a technology partner of global automotive manufacturers, which selects it to develop and manufacture high-performance battery systems, electric powertrains, electronic systems, and user interface components.

This year the company will hire 700 new people

Mate Rimac, CEO of the Rimac Group, said they were honored by the support of new investors, but also noted that they have ambitious growth plans for the next two years. “We are honored to support significant new investors such as SoftBank Vision Fund 2 and Goldman Sachs Asset Management, who believe in our vision. We are also grateful to Porsche and InvestIndustrial, which have played an important role in our success so far, and have now stepped up their support with new investments. In my opinion, it is a huge thing that they invested in us from SoftBank, the largest technology investor in the world, and Goldman Sachs, in general, one of the largest investors in the world", Rimac told reporters.

“As we reorganize the Rimac Group, we are establishing new production processes to meet global demand, we are hiring 700 new employees in 2022 alone, and we have hired more than 300 people so far. We are opening new offices in several locations in Europe and expanding production on Campus and other locations, the support of our professional investors will help us bring the company to the next stage of life. I would also like to personally thank all our employees because without their hard work, loyalty, and enthusiasm for the vision of the Rimac Group, we would not be here where we are today", added Rimac. Rimac revealed that today, 12 years since its founding, the company has more than 1,500 employees (there are more than 700 engineers) in eight locations.

The lack of staff in Croatia forces the employment of foreigners with experience

In a conversation with journalists on the occasion of the completion of the new investment round, Mate Rimac pointed out that the company continues to record constant growth, every year and a half to two almost double the number of employees. Currently, 150 employees work in France in the plants that Rimac shares with Bugatti, while in Warwick, Great Britain, there are already about a hundred employees. As for employment, Rimac says the focus in the last two years has been on increasing seniority.

"We grew organically before and we couldn't afford to pay foreigners or we weren't very attractive to them, and there was no experience in Croatia. So, in the beginning, we were all young, there were also students for whom this was their first job. That is why we focused on bringing in foreigners who have a lot of experience in the industry since we simply do not have such staff with such experience. Now we have people from Ferrari, Aston Martin and such companies. Almost half of the new people are foreigners. Even English people work here, although we also have an office in England. Those who are more ambitious prefer to come to us, 'close to the action', although they can work from England. Everywhere it would be difficult for us to make the team we want and in such a short time with such huge growth, without hiring internationally. Even if we are in, say, Germany", explains Rimac.

Rimac also pointed out that so far they have received almost a hundred times more investments from private investors than the money they received from the EU and Croatia. "So, it is absolutely untrue that we live on EU funds. Only one percent of our total investment comes from EU and national funds, less than seven million euros, as far as I know. We paid ten times more in taxes than we received money from the state, and four times more than we received from the EU", added Rimac.

Problems are caused by a lack of materials

Asked how much Rimac Automobile is affected by a shortage of materials, such as cables, Rimac revealed that, although they are a small company, they still have problems due to their vertical integration. “We produce thousands of parts ourselves. For example, an electronic unit or board that we work on has a few hundred small components. If we are missing only one of these components, we cannot produce a tile.

That was a huge problem for us and the reason why some things took us a lot longer. Being a small company, we managed to get away with paying ten or thirty times the purchase price from a broker, so that we could buy some, say, connectors from them. We had no other options. It is cheaper for us to pay more than for production to stop”, explains Rimac.

More than 200 million in development

Because they create products with very high added value, Rimac says that time means much more to them than the price of energy. "This year, our energy costs will be far less than one percent of the annual cost. We are investing hundreds of millions of euros in development, and this year alone the budget for that is more than 200 million euros. Of all the things that can affect our business or cause us problems, energy is in the 100th place. I'm worried about other, much bigger things. It is important to us that there is no delay. If something is late for us, or we have to go back to development because we screwed up, it will have a much bigger effect than the increase in energy prices. So, that is not a factor for us", said Rimac.

As for a possible IPO (short for initial public offering), Rimac says they want to do it at the best time for the company. "There is no specific timing when we have to or want to. I expect us to do that at a time when the company is a little more predictable, that is, when you are sure that you can fulfill something you announce within the given deadline. In my opinion, this is the right time to list the company. I don't know if it will be in the next three or five years, but it is a framework we are thinking about", Rimac said.

The capital will be used for the further development of Rimac Technology

In November 2021, the merger of the hypercar division, Rimac Automobili, with Bugatti Automobiles was carried out. Now both brands operate within the Bugatti Rimac company, the world's leading manufacturer of high-performance hypercars. The capital raised from Investment Circle D will be used primarily for the further development of Rimac Technology in the field of large series production for global automotive manufacturers.

The company says that based on the knowledge gained from the development of the Rimac Nevera electric hypercar, the company has developed a wide range of products and services for the entire process, from concept to series production of various key elements of electric and hybrid cars. So far, Rimac Technology has already entered into partnerships with many global brands, including Porsche, Hyundai, Pininfarina Cars, Koenigsegg, and Aston Martin. Mate Rimac also said that the company is currently cooperating with 12 world car manufacturers.

Tens of thousands of components will be produced on campus

Rimac Technology is in the process of increasing its production capacity, and the construction of the new Rimac Campus, the largest industrial building in Croatia, is currently being completed. When full on-campus production capacity is reached, Rimac Technology will be able to produce tens of thousands of components annually, ranging from hybrid battery systems to entire platforms for other manufacturers.

The Rimac Campus will also house the headquarters of Bugatti Rimac, which manages the Bugatti Automobiles and Rimac Automobiles hypercar brands. The campus will also produce the Nevera hypercar - the most powerful production car in the world. Work on campus, Rimac says, despite all the problems with the lack of materials, is progressing well, since the roof is already set on part of the building.

They are also planning another campus

Rimac also revealed that, although the first campus is not open either, they are intensively planning a second campus. In the meantime, they have rented several office buildings in the City Island business center near Buzin, because they have already realized that the Campus in Sveta Nedjelja will not be enough for them. Between 500 and 600 people now work at the temporary location in Zagreb's Skorpikova, former Pevec. When asked where and when another campus could be built, Rimac said they are planning a facility that is four to five times larger than the current Campus.

"For now, we are planning in Croatia. You know that we bought about 600,000 square meters of land near Kerestinec from Pliva and we are thinking of doing it there. Of course, we are also talking about a much larger number of employees. The campus is already filled with projects, everything is sold out. We already know where the production line for which manufacturer will come from. This campus is already too small for us", Rimac told Telegram.

What do investors say?

Jimi Macdonald, an investor for SoftBank Investment Advisers, said we are witnessing rapid growth in demand for electrification in an industry facing significant challenges in adapting to technological change. “Rimac has quickly established itself as a leading EV technology partner to the global automotive industry in the transition to an electric future. We are happy to be able to support Mate and his team in further success and raising Rimac to a new level”, said Macdonald.

Michael Bruun, Director of Private Equity at Goldman Sachs Asset Management for Europe, the Middle East, and Africa, said the company looks forward to partnering with Mate Rimac and his managers to develop innovation and make further progress in pushing the boundaries of battery and electric drive performance. Andrea C. Bonomi, Chairman of Investindustrial's Industrial Advisory Board, said they were "extremely pleased to be able to continue to support the company in achieving its industrial expansion plan, which will make Rimac a leader in the transition to electromobility solutions. We also welcome new shareholders who will further strengthen the group."

Lutz Meschke, Deputy Chairman of the Management Board of Porsche AG and a member of the Management Board for Finance and IT, reminded us that already in 2018 they were convinced that Rimac has great potential. “We are happy to have been able to contribute to the progress and success of the Rimac Group. With the new investors, Rimac will further strengthen its position in electromobility and thus become an even stronger partner for Porsche. This close cooperation creates added value on both sides in terms of technological and innovation strength”, says Meschke.

For more, check out our business section.

Monday, 3 January 2022

Rimac Offering €1000 to Anyone Who Recommends Someone He Employs

January the 3rd, 2022 - Mate Rimac is Croatia's shining star when it comes to entrepreneurship, having shown that anything is possible in Croatia, despite the many barriers to success in his field. He has even turned the eyes of the demanding automotive world to Croatia, who wouldn't have given this country as much as a second glance otherwise. Porsche is now firmly tied to the country through him.

The Livno-born businessman who is the head of the currently Sveta Nedelja-based Rimac Automobili, is now offering a very handsome 1000 euro amount to anyone who recommends a person they end up deciding to employ in another move in which he is giving back to people.

As Poslovni Dnevnik writes, the entrepreneur is looking for new employees, and he is looking for candidates through recommendations. Anyone can recommend someone, and should they get lucky and get hired by the company, they'll have 1000 euros show up in their bank account. A nice surprise indeed for the one month of the year (January) in which everyone feels skint.

Anyone who refers to a candidate who is eventually hired by this enterprise will receive a 1000 euros cash - whether or not that person is employed by the Rimac Group or not.

“As we expand our project work for many global automotive companies, we're expanding at all levels. Anyone who nominates a candidate we hire in the end will be rewarded with 1000 euros (gross) - regardless of whether they're an employee of the Rimac Group or not,'' wrote Mate Rimac on his Facebook page.

Rimac is looking for experienced procurement and logistics experts who can take responsibility for challenging, large projects.

"Managing the requirements of such complex projects is not something for beginners, so please don't waste your and ours with recommendations for unskilled people," Rimac concluded in his Facebook post.

For more, check out our dedicated business section.

Wednesday, 8 December 2021

Mate Rimac: We Want to Develop Profitable Company, Create Something New

December the 8th, 2021 - Mate Rimac has done more to show the world that it is very much possible to succeed in Croatian entrepreneurship than anyone else. Perhaps Ivan Mrvos comes a close second, but for the automotive world which would never have given the country a second look, what he has done is truly historic.

As Poslovni Dnevnik/Zoran Vitas writes, after a joint venture with Bugatti and the creation of the new Rimac Group, Mate Rimac and his dedicated team have a much harder job on their hands in Sveta Nedelja near Zagreb than they did before. When the German Manager Magazine announced that it was considering going public with an expected estimated value of five billion euros, a lot was written about that possibility.

It was even mentioned by Lutz Meschke, Deputy Chairman of the Executive Board and a member of the Finance and IT Management Board at Porsche AG. One day an IPO would make sense.

''Mate Rimac must first implement his company's operational plan, but he can count on our support,'' said the leader of the cult German company.

Mate Rimac explained back in November for Automobilwoche what the implementation of such an operational plan means. He was short and clear - profitability. That is, significantly improved profitability.

“At Bugatti Rimac, we're focused on profitability. We don't want to rush, but instead we want to give ourselves time to prepare everything thoroughly. This could be done in 5-10 years,'' said Mate Rimac about the brand with which, realistically, Volkswagen had some trouble.

"It would be easiest to take the Nevera, redesign it and call it Bugatti. But that is absolutely not what we're going to do,'' Rimac repeated. When Bugatti's last Chiron leaves the factory in Molsheim, it will be Bugatti's turn,'' which, as he said during Ursula von der Leyen's visit, makes the most sense.

“Porsche runs on carbon-neutral or even positive fuel because of the way it is produced. In the medium term, it would make the most sense for Bugatti to be a hybrid. It is true that Porsche wanted us to go to electricity immediately, but we said that we'd like to work with petrol engines for some time to come, with a new generator. But that's where I'll stop,'' said the head of Bugatti Rimac, stating that they have been working on the development of the new Bugatti in Croatia for a year now.

"We want to make a profitable company, but we won't recycle anything. We will not redesign the Chiron and thus make a new model, or just hybridise it, we're developing an entirely new product. And that product will still have an internal combustion engine. We're also looking at it in the long run knowing how Bugatti has known diversity throughout history that can be used not only to make hypercars. It's an opportunity to produce different and exciting cars that will be both electric and electrified. We'll have fully electric Bugattis in a decade,'' Mate Rimac said in conversation with the British Top Gear.

For more, check out Made in Croatia.

Friday, 9 July 2021

Porsche Controls 58.2% of Rimac Company Following Spectacular Bugatti Deal

July the 9th, 2021 - The incredible Mate Rimac Bugatti deal has blown the myths about not being able to succeed in Croatia straight out of the water. If he hadn't managed to convince you of that before, which is difficult to believe, he certainly has now. This remarkable Croatian entrepreneur's dogged determination is tireless, and Porsche has become even more deeply involved in the Rimac company.

As Poslovni Dnevnik/Ana Blaskovic writes, drowning in the proverbial Croatian sea of ​​gloomy news about the failure of the vaccination rollout amid the pandemic and a new wave of mutated coronavirus posing a potential threat, the news that young entrepreneur Mate Rimac has taken over the cult figure of the automotive world, Bugatti, resounded like a nuclear bomb.

The historical success of the Rimac company, which operated out of a mere garage back in 2009, is astonishing. Very few people believed in the company's plans to create hypercars right here in Croatia, where cars are imported but not produced, but it turned out to be an astronomical success. The business side of the story, however, went under the radar.

The merger of Rimac Automobili and Bugatti Automobiles created a joint venture, known as Bugatti Rimac (in which the newly formed Rimac Group will hold a majority stake), which will be (in)directly controlled by Porsche with 58.2 percent ownership, while Mate Rimac will remain at the forefront, but with a minority stake of 20.4 percent.

The transaction isn't accompanied by cash flow as such but is a matter of exchanging shares, which reflects the consequent rearrangement of the structure of the Rimac company. With this move, Rimac's startup actually ceases to be a startup and is being additionally integrated within the umbrella of the VW Group, of which Porsche is of course a part. Rimac Automobili is becoming the Rimac Group (divided into Bugatti Rimac and Rimac Technology) in which Mate Rimac formally holds the largest single stake of 37 percent, Porsche 24 percent, Hyundai 12 percent and other shareholders 27 percent.

The Rimac Group will have a 55 percent stake in the Bugatti Rimac package, which includes the separate brands Bugatti Automobiles and Rimac Automobili. The remaining 45 percent of the shares of the joint venture are held by the German manufacturer, which has been following the Rimac company financially for the last three years.

Despite these figures, which lean significantly in the favour of the German investor, it has been agreed that Mate Rimac will remain at the helm, as the CEO of the Rimac Group he will lead the business of Bugatti Rimac and the new company Rimac Technology. It's here that the core business that broke through in the automotive industry remains - the development, production and delivery of battery systems, powertrains and other EV components. All of the above will be 100 percent owned by the Rimac company.

“What's important to note is that the Rimac Group is managed by director Mate Rimac. The owners participate in the management of the company through the Supervisory Board,'' stated an explanation regarding German shares. They added that “Rimac Group is the largest shareholder of Bugatti Rimac d.o.o. where Mate Rimac is also the director. Mate is also the director of Rimac Technology, which is 100 percent owned by the Rimac Group.''

Car buffs who follow such news aren't too surprised by this outcome, although it is almost certain that there was resistance to such a solution. The new Rimac company remains under the control of a young businessman who, despite all the objective obstacles to doing business in Croatia, raised the company from scratch in an industry that is markedly capital intensive. Only twelve years has passed from the aforementioned garage adventures to the presentation of the stunning Nevera, the fastest electric hypercar in the entire world. 

The fact that all of the above was done at all is exceptional, but knowing it has been done by a Croat, in Croatia, is bordering on miraculous.

For more, follow our dedicated business section.

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