European Uber rival Bolt valued at $8.4 billion in new funding round

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  • Estonia-based ride-hailing start-up Bolt says it has raised $711 million in a new round of funding led by Sequoia Capital and Fidelity.
  • The eight-year-old company’s investment is about $8.4 billion, up from $4.8 billion just five months ago.
  • Asked if Bolt would seek an IPO, CEO Marcus Willig said, “There is no urgency for us at the moment.”

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LONDON – Competition for Uber in Europe is getting tougher.

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Estonia-based ride-hailing start-up Bolt said on Tuesday it has raised 628 million euros ($711 million) in a new funding round led by Sequoia Capital and Fidelity.

The investment, which was also backed by some existing investors in WhaleRock, OwlRock and Bolt, valued the eight-year-old company at 7.4 billion euros — or about $8.4 billion — from about $4.8 billion just five months ago.

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“Cities are increasingly seeing that they want to switch from private car ownership to ride-hailing and other “sharing,” Bolt CEO and co-founder Marcus Willig told Businesshala in an interview. mobility” option.

Founded in 2013, Bolt has become a fierce competitor to Uber, challenging the US ride-hailing giant in key markets such as London and Paris. It has since expanded into several other lines of business including online food and grocery delivery and e-scooters.

Willig said investors are starting to see the value of a “super app,” a concept that involves multiple services combined into a single platform. The trend is particularly popular in parts of Asia, but has been slow in Europe and North America. Bolt says it now has 100 million customers in 45 countries in Europe and Africa.

‘No urgency’ for IPO

It’s been nearly three years since Uber went public, and the stock has been on a whirlwind ever since, reaching all-time highs before falling below its first price in 2021. Asked whether Bolt could meet demand for an initial public offering, Willig said there is more than enough funding available in private markets.

“In the long term? Most likely, yes, we will be public,” he said. But, he added, “there is no urgency for us at the moment.”

Willig sees on-demand grocery as a key area of ​​focus for the company in the coming years. The area has become overly crowded, with an influx of start-ups from Getir to Gorilla looking to entice consumers with the promise of ultrafast delivery times from convenience stores and supermarkets.

Bolt launched its 15-minute grocery delivery service in Estonia last year, called Bolt Market. Similar to competing services, the firm relies on so-called dark grocery stores that only fulfill orders online and do not serve customers in-store. It is now live in 10 countries, with dozens of dark stores installed. The company is seeing notable traction in Central and Eastern Europe, Willig said, with plans to open hundreds of new sites this year.

Bolt’s CEO said the company is likely to spend “hundreds of millions” on building out its grocery business over the years. He increasingly questioned the sustainability of grocery delivery firms, noting that the industry operates on low profit margins.

“It’s not a software business,” Willig said. “It’s going to be a heavily competitive operating business. What most of these companies are hoping to be a big profit driver are all going to be very disappointing in a few years.”

Bolt often describes its operating model as leaner and more cost-effective than Uber. company A loss of 44.9 million euros in 2020, according to its most recent financial report, down slightly from a loss of 85.5 million euros a year ago. Revenue grew almost 75% to EUR 221.4 million.

Uber, which has long been mired in concerns about whether it could become a profitable business, reported its first adjusted EBITDA profit (earnings before interest, taxes, depreciation and amortization) in the third quarter of 2021.

Bolt’s business initially suffered heavy losses at the start of the coronavirus pandemic, with revenues falling by as much as 80% in 2020. The company focused on food delivery and other sectors to boost its business when times got tough and benefited from the growing demand for ride-hailing. Post-lockdown. Bolt’s ride-hailing business more than doubled in 2021, according to Willig.

driver shortage

However, Uber and its competitors have struggled to meet that demand with a supply of drivers amid ongoing labor shortages. This has led to increased fares and unusually long wait times in large cities such as London and New York.

“Everyone is fighting for the drivers,” Willig told Businesshala. “We have always been positioned as the most driver-friendly platform in terms of better earnings, better treatment, and so on.”

In November, Uber said it would increase prices in London in an effort to attract more drivers, while Bolt allowed drivers to set their own fares in three UK cities.

Still, Bolt has faced Uber over the years, coming from a landmark UK court ruling last year that said Uber drivers should be treated as workers, thanks to upcoming European regulations that would allow gigs. Threats to elevate the business model of the economy platform.

Willig said most of Bolt’s drivers prefer the flexibility that comes with gig work and don’t want to be treated like employees – a position that would give them significant benefits such as minimum wage and vacation pay.

“We think common sense is going to prevail over the long term,” Willig said. “I don’t think it makes sense to force them all into a model that they really obviously don’t want.” He added that most countries are likely to get a “flexible system” that enables both full-time and flexible working hours.

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