Bolt, a rival to Uber and others providing on-demand ridesharing, scooters and other transportation services across some 150 cities in Europe and Africa, is today announcing another capital raise as it weathers a difficult market climate where, because of COVID-19, many are staying in place and avoiding modes of transport that put them into contact with others.
The Estonia-based company is today announcing that it has picked up an additional €100 million ($109 million) in a convertible note. Bolt also confirmed that is now valued at €1.7 billion (or nearly $1.9 billion at today’s rates).
The money is coming from a single investor, Naya Capital Management, which was also a major backer of the company in its last round, a $67 million Series C in July 2019.
The funding is one more example of how investors are continuing to support their most promising, and/or most capitalised, portfolio companies as they face drastic losses of business during the COVID-19 pandemic, which can only be more complicated for a startup built on a business model that — even in the best of times — is very capital-intensive.
Before this round, in April we were hearing that Bolt was running out of runway and that they were in discussion also with the Estonian government — traditionally, a big supporter of the country’s tech industry — to underwrite debt in the company. But with political shifts it’s had some detractors too.
Bolt has confirmed that this whole funding is in the form of a convertible note (that is, debt), with no additional equity at this point. “We have no plans that we can discuss at the moment,” a spokesperson said, so it sounds like a further equity round is something it’s working on regardless, given these take more time to close.
Bolt — which says it has 30 million users in over 35 countries globally — says that the worst of the lull in business was two months ago and that it’s been slowly recovering since. A spokesperson said that the company was closing in on breakeven at the end of last year, and it was preparing an equity round “mostly for food delivery and micromobility.”
Now, the picture is somewhat different, with ride-hailing and recovery measures putting more financial need into the business model.
Altogether, however, the company is still on the relatively smaller side when it comes to capital raise for its on-demand transportation model. Bolt has now raised over €300 million including debt and equity, with other investors including Nordic Ninja — a new fund out of Helsinki backed by a number of Japanese LPs to invest in Northern European startups (Bolt is based out of Tallinn) — Creandum, G Squared, Invenfin (a fund out of South Africa backed by investment holding company Remgro) and Superangel, a fund out of Estonia that has been backing the startup since its earliest days, as well as Didi (and, by association, SoftBank and Uber), Daimler, Korelya Capital and Spring Capital.
Formerly known as Taxify, Bolt rebranded last year as it expanded beyond private car rides into other areas like electric scooters and food delivery — and the plan will be to use this funding to expand all three business areas in the coming months, along with newer product categories like Business Delivery in-city same-day courier services and Bolt Protect for people to continue to use its ride-hailing services by kitting out cars with plastic sheeting between driver and passenger seats.
Uber, Bolt’s publicly traded business rival, has laid bare just how painful the pandemic has been for business. The company, which had raised billions of dollars as a privately-backed startup, has laid off nearly 7,000 employees in recent weeks, and while we currently have little visibility of the impact this has had on the contractors Uber engages to move people, food and other items in its network, its next quarterly earnings (which will cover the full brunt of the pandemic) should more clearly spell out the drop-off in overall business.
Bolt notes that so far, it hasn’t laid off any of its 1,500 employees as Uber and others have, although it has cut salaries between 20 percent and 30 percent across the board. The spokesperson said that it’s now slowly returning salaries to pre-COVID levels. While it doesn’t go into financial details, it does acknowledge that business is not business as usual.
“Even though the crisis has temporarily changed how we move, the long-term trends that drive on-demand mobility such as declining personal car ownership or the shift towards greener transportation continue to grow,” said Markus Villig, CEO and co-founder, in a statement.
“We are happy to be backed by investors that look past the typical Silicon Valley hype and support our long term view. I am more confident than ever that our efficiency and localisation are a fundamental advantage in the on-demand industry. These enable us to continue offering affordable transportation to millions of customers and the best earnings for our partners in the post-COVID world.”
A lot of people have talked about how fundraising has become more complicated in the current climate. Not only are founders and investors not able to meet in person and get more embedded in evaluating an opportunity, but many are unable to see what the future will hold in terms of market demand and the overall economy, making the bets all the more laden with risk.
That’s left a lot of the activity spread between startups that are seeing business lift precisely because of present circumstances; startups that have businesses that are continuing to enjoy a lot of trade despite present circumstances; and startups that are strong enough (or already so highly capitalised) that investors want to support them to make sure they don’t go under. More typically, startups that are securing funding are falling into more than one of the above categories, as is the case with Bolt.
“We are delighted to have the opportunity to invest in Bolt at this stage in the company’s growth story,” Masroor Siddiqui, managing partner, CIO and founder of Naya Capital Management, said in a statement. “Under Markus’ leadership, Bolt has established itself as one of the most competitive and innovative players in global mobility. We believe that Bolt is helping drive a fundamental change in how consumers interact with the transport infrastructure of their cities and look forward to the company’s continued execution on its strategic vision.”
Update: Bolt confirmed after we published that this is actually all in the form of a convertible note, so this is not a Series D. Also updated with more information about the state of the business.