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.
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