Ride-hailing start-up, Bolt has raised $709 million in investment, valuing the technology company at $8.4 billion.
Bolt’s growth is also notable in light of the challenges that some of its competitors have faced in the aftermath of Covid; the pandemic had a significant chilling effect on people’s willingness to travel in a vehicle where they must share a closed-in space with another person.
That problem was subsequently exacerbated when businesses started up again, but so quickly that many firms are experiencing a driver scarcity rather than a passenger deficit.
What you should know
Bolt will use the funds to continue expanding to new geographies and bringing more consumers and partners to its “super app,” while newer business lines, such as its 15-minute grocery delivery service, Bolt Market, will be building out “dark stores” in more cities to expand the service beyond the ten where it is currently active.
Bolt (formerly Taxify) was founded eight years ago in Tallinn, Estonia with a mission to bring ride-hailing to emerging markets and countries where others like Uber had yet to establish a strong foothold, a strategy that it used to modestly expand across regions like Central and Eastern Europe and Africa, attracting investors like China’s Didi, which had built a massive business in its own emerging market.
The focus has stayed on Europe and Africa over time, but Bolt discovered that many of the lessons learned from those early launches could be applied just as successfully in more industrialized countries, with more profitable payoffs.
Meanwhile, Bolt’s diversification strategy, which includes scooters, couriers, and now food delivery services in addition to automobiles, is part of its scaling strategy.
Putting all of the alternatives and cross-promotions under a single app not only helps Bolt draw in new consumers and cross-sell to them, but it also does so with basically zero marketing costs, according to Villig.
What they are saying
“All of our business units are growing,” founder and CEO Markus Villig said in an interview this week. Villig said that even its most mature business, ride-hailing, “is seeing double-digit growth,” while the newer businesses, being smaller, are expanding even faster. “The new trend of last year is that private cars are a bad thing and increasingly people want to use other forms of mobility.” He added that Bolt is working on partnering with more city governments to build out its services as part of their updated transportation strategies.
Villig admitted that Bolt, too, faced some “short-term fluctuations” in demand when the lockdowns first started. But it has made attracting and keeping drivers a major focus by paying out better commissions than its rivals (typically, Villig said, it will pay between 10% and 20% better than competitors).
“There is a massive lack of supply on these platforms, so we have focused on taking the most partner-friendly lowest commission,” he said. That has paid off well for Bolt, which has now seen monthly revenues more than double compared to sales pre-Covid, Villig said.
“We started off in Eastern Europe and Africa because those markets had a bigger need. They had lower car ownership, higher unemployment [making for a market with many freelance drivers], it made sense,” said Villig.