Economies of scale are the cornerstone of on-demand businesses, and to that end one space aspirant has raised a grand tour to grow his business. Bolt – the startup and on-demand application of the same name for a shared car, car and scooter reservation service; and deliveries of restaurants and groceries – raised 628 million euros ($709 million at current rates), at a valuation of 7.4 billion euros ($8.4 billion). Funds will be used to continue expanding into new geographies and bringing more consumers and partners to the Super App; And newer business lines, such as the 15-minute grocery delivery option, Bolt Market will build “dark shops” in more cities to expand service beyond the ten in which it operates today.
“All of our business units are growing,” founder and CEO Markus Village said in an interview this week. Villig said that even its most mature business, the relay service, “is seeing double-digit growth,” while new businesses, being smaller, are expanding faster. “The new trend in the last year is that private cars are a bad thing and that people increasingly want to use other forms of mobility.” He added that Bolt is working to partner with more city governments to build their services as part of updated transportation strategies.
Sequoia Capital and Fidelity Management and Research Company LLC led the tour with Whale Rock, Owl Rock (a division of Blue Owl), D1, G Squared, Tekne, Ghisallo and other unnamed backers.
Financing news culminates in a few eventful months for the company, which raised €600 million at a valuation of over €4 billion just four months ago in Series E also led by Sequoia. Bolt now has more than 100 million customers in 45 countries and more than 400 cities using its services. As a measure of its growth, in August, when the company announced the previous round, it had 75 million customers.
Bolt’s growth is also notable given the difficulties some of its competitors have faced in the wake of Covid: First, the pandemic has had a huge scary effect on people who want to get into a car where they have to sit indoors. With another person (the driver). This situation then worsened when things recovered again but so quickly that many services are short on drivers rather than passengers.
Village admitted that Bolt, too, experienced some “short-term swings” in demand when the shutdowns first started. But it has made attracting and retaining drivers a huge focus by paying better commissions than its competitors (typically, Village said, you’ll pay 10%-20% better than competitors).
“There is a huge shortage of supply on these platforms, so we focused on getting the lowest favorable commission for partners,” he said. Village said this has paid off well for Bolt, which has now seen monthly revenue more than double compared to pre-Covid sales.
Bolt was founded eight years ago in Tallinn, Estonia (originally as Taxify), with a mission to bring delivery service to emerging markets and countries where others like Uber haven’t gained a strong foothold, a strategy it has used to expand modestly across regions such as Central and Eastern Europe and Africa, In the process it attracts investors like China’s Didi – it has built a huge company in its own emerging domestic market. (Diddy quietly gave up her stake in Bolt last year.)
Over time, the focus has remained on Europe and Africa, but Bolt has found that much of what he learned from those early editions can be easily applied in more developed countries, with more lucrative profits.
We started in Eastern Europe and Africa because those markets were in greater need. They had less car ownership, higher unemployment [making for a market with many freelance drivers]Village said. “But now we know that this model works everywhere, and it’s actually easier to grow in Western Europe because they are developed markets. We found that if you can make this model work in really cheap thrift markets, as soon as you go to London or Stockholm, it’s Financially easier. And the economy unit is definitely better because the prices are higher.” However, it is not a perfect system. Working in developed markets is “more regulation,” he said, and the limits that come with those restrictions.
Meanwhile, Bolt’s diversification approach, moving beyond cars into scooters and couriers, and now also food delivery services, is also part of his expansion strategy. Villig said offering multiple services within one app not only helps Bolt attract and sell new customers, but does so essentially without marketing costs by putting all the options and cross-promotions inside one app.
“There are two elements that set us apart and turn in our favour, which are the synergies and shared costs between these sectors,” he said. Most of Bolt’s competitors generally focus on one thing in every app, Villig continued, “and neither are we,” so it’s easier and less expensive for Bolt to build more services off each other’s back. “Now we’re passing on those savings to clients.”
“We are excited to deepen our partnership with Markus and Bolt to advance their mission to make urban travel affordable, sustainable and safe,” Andrew Reed, Partner at Sequoia, said in a statement provided to TechCrunch. “At Sequoia, we believe in the global potential of technology and entrepreneurship and have been inspired by the growth of Bolt from Tallinn, Estonia to more than 400 cities and 100 million customers across Europe and Africa. We are dedicated to helping them expand their footprint, increase their product offerings and improve the quality of life in cities over the long term “.