Croatian Hypercar Startup
An electric-vehicle technology attracts Japanese investment
This is a fictional story.
When a group of Japanese automakers sent a representative CFO to a small Croatian vehicle venture on the spotlight, he turned pale and asked the first question to the founder, Mate Rimac. “Sir, what is your business model?” The answer from the 32-year-old entrepreneur in beard could be something like this. “It is going to be a little bit long for you if you want financial description in details.” The conversation started with a vague mission statement followed by vision, business domains, client, investor, product, and organization.
Rimac’s unique approach challenges conventional style in start-up. In almost all business domains for analysis, his firm is opposed to venture scheme which has been understood and practiced in such incubation place as Silicon Valley. The Valley attracts so many young entrepreneurs from around the world with a hope to turn their ambitions into a reality to make the buck stop at them. Mate Rimac is not in Silicon Valley but in the far side of Europe, which is located 1,330 km or 825 miles from the firm.
Japanese CFO made an appointment with Mr. Rimac in advance and tried to find the strategic course of action. Mr. Rimac would have gone with this mission statement; the Rimac mission is help the automobile industry become electric. The industry eyes on battery-powered transport but the conventional internal engines are still prevalent. Electric-vehicle technology is still in infancy. But along with 700 employees in Croatia, he believes in his vision that the firm is becoming the best maker of electric hyper cars in the industry.
The client list includes almost all of Europe’s big carmakers. Britain, Swedish, German, France, and Italian brands constitute the list of Rimac’s roster. When the Croatian firm announced 150 C electric hypercars in 2018, it was sold out immediately with build-to-order contract from the clients. Their technology attracts investment from Asia. Kia and Hyundai are said to be interested in the supply of electric-vehicle technology.
Main business will be supplying electric-vehicle parts and software to automakers in Europe. Battery packs, cooling system, and management software will improve the speed and save energy for a range of product line of automakers. The three lines of business houses 700 engineers under Mr. Rimac. The organizational structure would be hierarchal with some layers. Negotiation with European suppliers requires a long and enduring decision-making process, in his words, “five non-disclosure agreements and six-meetings…and months to get anything started.” It took seven hours to find out this.
On his way back to Tokyo, CFO brought with him tons of interview documents and digital materials. He was now busy reorganizing the information to develop a visit report to the executives of Japanese automakers. He didn’t have enough sleep because it was his first trip to Croatia where deadly memory of Serbia dispatch was clearly in his history book. The flight was not comfortable, either. He had only three hours left until his airplane lands on Narita International Airport. A big excuse to develop a full business with data required an excessive time from him. As it turned out, the report came into a one-page executive summary before the temporary board room in VIP rest counter at the Narita Airport.
He scribbled something in the-back-of-the-envelop manner. It looked like this.
At the end of brief fifteen minutes presentation, one executive asked a question, “Thank you for the presentation. How much should we invest in Rimac? Should we go for it?” In a deep sigh, CFO said, “Well, I will find out it. Authorize the next business trip to France. I will be meeting with clients over there.” His face turned in full smile.
Reference: “Rimac is making a big name” by The Economist