Rimac Automobili founder Mate Rimac shares lessons from bootstrapping an EV company

'We had situations where I can't even start to explain what we survived'

Mate Rimac’s founder story has the makings of automotive folklore. He started Rimac Automobili in his garage in 2009 as a literal one-person operation that has grown to a company with more than 1,000 employees, supply contracts with automakers like Porsche and a new electric hypercar moving into production.

What might not be known is how close the company came to failing. “It has been such a wild ride,” Mate Rimac said during an interview at at the virtual TC Sessions: Mobility 2021 event. “The first seven years, we were like out of money and technically bankrupt all the time.”

The founder and CEO of Croatian electric hypercar and components developer Rimac Automobili joined TechCrunch on our virtual stage to talk about the company’s new Nevera vehicle, his interest in electric robotaxis and the prospect of an acquisition of Bugatti. Throughout the interview, he gave a candid account of some of the company’s lowest points, how he and the company survived and what other founders can learn from his experience.

“It was quite a ride.”

Today, Rimac Automobili is a household name in Croatia with plans to grow even larger. Rimac is currently building a headquarters and technology campus on a 49-acre site that is slated to be completed in 2023. It was a far more solitary experience the first few years of Rimac Automobili’s existence. Even when it gained recognition, the company came close to failing numerous times, Rimac said in the interview.

It has been such a wild ride. And like the first seven years, we were like out of money and technically bankrupt all the time.

We had situations where I can’t even start to explain what we survived. I set out this company 12 years ago, I was alone for two years. The first employee joined me in 2011. So it was really built from a garage.

We were in situations where we couldn’t pay rent, couldn’t pay suppliers or the electricity company that came to cut our electricity. We were doing this in a country that didn’t have a single venture capital fund when I started. Now, there is a couple small, very small funds here. There is no automotive industry, very little industry to speak of. So it’s very, very difficult to start doing this here. International investors at that time didn’t want to touch electric cars when I started … They didn’t want to touch Croatia, like “Where the hell is that?” It was quite a ride. (Timestamp: 4:10)

“We actually bootstrapped a car company.”

Many startups, especially those working to bring an idea from the lab to the commercial sector subsists in a pre-revenue state for years. Mate Rimac said the company had to generate revenue from the beginning to survive.

We actually bootstrapped a car company. We had revenue from day one, not because we wanted to, but because there was no alternative and there was absolutely no other way for us. So most of the years in business, we are actually profitable. And that’s pretty tough.

You have these big electric car startups that have received billions of funding and so on. Hats off to them, great job. But we had to survive from the very beginning by the stuff that we were doing and making for other car companies. (Timestamp: 5:10)

“You basically never give up.”

Mate Rimac wasn’t able to specifically explain why he didn’t give up, even in the company’s darkest days. He did seem to suggest that with so much at stake there was little choice but to push forward.

I was many times, like that’s it, we are against a wall, like we have to close the company. But basically, you have nothing to lose, you have invested everything your whole life … no matter what you do in this kind of startup environment, you are all-in. And you basically never give up.

Maybe somebody will say you should give up at some point. But I didn’t give up even in the times when it was absolutely insane and everybody would say you have to stop, but I was sure there is potential that things will look good. Now electric cars, which is our business, looks like it makes a lot of sense. People are putting money in it and so on. But at many points in history, people would have told me, “Are you crazy, just stop with it and do something else.” So in our case, it was just pure perseverance. (Timestamp:  11:14)

Don’t put all your eggs in one basket

Mate Rimac had wrapped up a Series A investment round of about $10 million in 2014 and had enough runway to operate through the end of 2015. When it was time fundraise again, the company had several interested investors, including term sheets in hand. Another investor came along with bigger promises, better terms and a positive connection that suggested a good fit. Mate Rimac said they decided to ditch the other investors and go with this sole investor.

The deal dragged on and the investor ended up being “fake,” as Rimac put it.

He was a fake investor that brought us to the brink of bankruptcy when we were like 150 employees at that time, and we thought we cannot survive one more month, but we were surviving like seven months without any money. We were just struggling to pay from paycheck to paycheck, being two days late to pay the paychecks, three days late with the paychecks and I thought, our whole team will just start running away, but incredibly just one guy left. (Timestamp 7:40)

“Hardware is tough.”

In this dark hour, The Grand Tour approach Rimac Automobili to test the Concept One hypercar. Mate Rimac said the five-day-long test went perfectly, until it didn’t. On the final day, Grand Tour presenter Richard Hammond crashed the vehicle after flying off the track at about 130 miles per hour. The vehicle rolled down the hill more than 300 feet and then caught on fire. Hammond survived, ending up with a knee injury. But the incident and the immediate aftermath pushed Rimac to the edge.

So everything was fine in the end and today, looking back, we can laugh about it. But I think at that time it cost me 10 years of my life, it nearly bankrupted us, all our customers were calling like, “This car was burning, will our batteries also burn?”  So it was a very public failure, a very public near-death experience for the whole company, where somebody almost died or had high chances to die in our product. So, you know, hardware is tough. (Timestamp: 10:20)