Economies of scale are an essential cornerstone for on-demand businesses, and to that end, one of the hopes in the industry has launched a big round to grow his business. Bolt – the startup and app of the same name that operates on-demand ride hailing, shared cars, and scooters; and restaurant and grocery deliveries – raised $ 709 million at current rates at a valuation of $ 7.4 billion. It will use the funds to further expand into new regions and attract more consumers and partners to its “super app”; and newer businesses, such as the 15-minute grocery delivery option, Bolt Market, will be building dark stores in more cities to expand the service beyond the 10 in which it operates today.
“All of our business areas are growing,” said founder and CEO Markus Villig in an interview this week. Villig said that even its most mature business, ride-hailing, “has seen double-digit growth,” while the newer businesses, which are smaller, are expanding even faster. “The new trend over the past year is that private cars are a bad thing and more and more people want to use other forms of mobility.” He added that Bolt is working to work with more city councils to expand his services as part of their updated transport strategies .
Sequoia Capital, Fidelity Management and Research Company LLC led the round with Whale Rock, Owl Rock (a division of Blue Owl), D1, G Squared, Tekne, Ghisallo and other unnamed supporters who also attended.
The financial news ends some eventful months for the company, which just four months earlier had raised € 600 million on a valuation of over € 4 billion in a Series E also led by Sequoia. Bolt now has more than 100 million customers in 45 countries and over 400 cities using its services. As a measure of its growth, the company had 75 million customers in August when the company announced the previous round.
Bolt’s growth is also noteworthy given the difficulties some of its competitors faced in the wake of Covid: First, the pandemic had a major deterrent effect on people’s willingness to get into a vehicle in which they were sitting in an enclosed space need to be with another person (the driver). This situation got worse when things picked up again, but so quickly that many services suffer from a shortage of drivers rather than passengers.
Villig admitted that Bolt was also faced with some “short-term fluctuations” in demand at the beginning of the lockdowns. But it has made driver attraction and retention a major focus by paying better commissions than its competitors (usually, Villig said, it will pay between 10 and 20% better than the competition).
“There is a massive shortage of supply on these platforms, so we focused on getting the most partner-friendly lowest commission possible,” he said. That paid off well for Bolt, which has now more than doubled monthly revenue compared to pre-Covid sales, Villig said.
Bolt was founded eight years ago in Tallinn, Estonia (originally as Taxify), with a mission to bring ride-hailing to emerging markets and countries where others like Uber have yet to gain a foothold, such as Central and Eastern Europe and Africa, and is moving in Investors like China’s Didi, who has built a massive business of her own in her own emerging market. (Didi tacitly sold his stake in Bolt last year.)
Over time, the focus remained on Europe and Africa, but Bolt found that much of what he learned from those early launches could just as easily be applied in more developed countries with more lucrative payouts.
“We started in Eastern Europe and Africa because these markets had greater demand. They had fewer car ownership and higher unemployment [making for a market with many freelance drivers]”It made sense,” said Villig. “But now we have learned that this model works everywhere and it is even easier to grow in Western Europe because they are developed markets. We found that if you can get this model working in really cheap, thrifty markets, it will be a lot easier when you go to London or Stockholm. And the piece economy is definitely better because the prices are higher. ”However, it’s not a perfect system. When working in developed markets, he said the compromise is “more regulations” and the limits that come with that.
Bolt’s diversification approach, moving beyond cars to scooters and couriers and now to grocery delivery services, is now part of his scaling strategy. Offering multiple services in a single app helps Bolt not only attract new customers and allow them to cross-sell, but also with essentially zero marketing costs by bringing all of its options and cross-promotions together into a single app, Villig said.
“Two elements that differentiate us from others and turn in our favor are the synergies and shared costs between these industries,” he said. Most of Bolt’s competitors generally focus on one thing in each app, Villig continued. “And we don’t,” so it is easier and cheaper for Bolt to build more services in a row. “Now we are passing these savings on to the customers.”
“We are excited to deepen our partnership with Markus and Bolt to advance their mission to make urban travel affordable, sustainable and safe,” said Andrew Reed, partner at Sequoia, in a statement to TechCrunch. “At Sequoia, we believe in the global potential for technology and entrepreneurship and have drawn inspiration from Bolt’s growth from Tallinn, Estonia to over 400 cities and 100 million customers in Europe and Africa. We strive to help them expand their presence, expand their product range and improve the quality of life in cities in the long term. “
