A range of products from the Estonian ride-hailing start-up Bolt.
LONDON – European ride hailing company Bolt announced Monday that it has raised € 600 million ($ 713 million) in new funding to enter the fast-growing online grocery delivery industry.
The new round of investments values Bolt at approximately $ 4.75 billion, more than double its last private valuation of $ 2 billion.
Venture capital firm Sequoia and fund managers Tekne and Ghisallo provided funding, while existing investors G Squared, D1 Capital and Naya increased their holdings.
“A year ago we got into the biggest crisis the company has ever experienced,” said Bolt’s CEO and founder Markus Villig in an interview with CNBC on Monday. “We are down over 80% as all cities were closed and carpooling was still the core business.”
“What has happened in the last 18 months is that we are now a completely different company,” added Villig. “Ride-hailing has since recovered completely. Delivery has grown from a relatively small business to one of the fastest growing food delivery companies in Europe.”
Bolt, formerly known as Taxify, started out as a taxi calling app in Estonia. The company has since branched into several new services, including food delivery, car sharing, and electric scooter and bike rentals.
Now Bolt is taking a big step into grocery delivery. The company, which promises to deliver groceries in 15 minutes, plans to roll out the service in 10 European countries including Sweden, Portugal, Croatia and Romania over the next few months.
Grocery delivery is a highly competitive sector, especially in Europe, where several new on-demand shopping apps are emerging with billions of dollars in venture capital behind them. One of the leading providers in the market, Getir from Turkey, was valued at $ 7.5 billion by investors in June.
Villig said his company will need billions of dollars in investment over the next few years as it aims to become a “super app” with multiple services touching different industries.
“The capital required will be enormous,” he told CNBC. “We are aware that we will have to raise billions in funding over the next few years to accelerate here, otherwise it will simply be too slow to achieve our mission.”
Bolt’s rise in market value is a boon to early financiers like German automaker Daimler and Swedish venture capital firm Creandum. The company also counts the World Bank and the European Investment Bank as investors.
Like other ride hailing companies, Bolt was hit by a sharp drop in sales at the start of the Covid-19 pandemic. It has grown rapidly in recent months as multiple countries emerged from the lockdown and now has more than 75 million users in 45 countries across Europe and Africa.
However, Bolt is now facing another source of uncertainty in the UK after the country’s Supreme Court ruled that Uber drivers should be treated as workers eligible for benefits like minimum wage and vacation pay. The case sets a precedent for competing ridesharing services like Bolt, Ola, and Free Now, which operate a business model similar to Uber.
Uber has subsequently classified all 70,000 of its UK drivers as workers rather than independent contractors and is now asking other operators to do the same.
“It just doesn’t make sense for drivers to take us on a trip where they as employees are entitled to vacation pay and a pension, and five minutes later, because many drivers are multi-app, they take a separate trip where they are not Eligibility for benefits, “Jamie Heywood, Uber’s regional general manager for Northern and Eastern Europe, told CNBC.
For his part, Bolt has proposed not to change its driver agreements.
“We are in talks with all drivers and regulators about what is the best way to go in each country,” said Villig. “What we want to offer, and what most of these drivers and couriers value most, is independence and freedom.”
“We see the best way to live up to this, having the best independent contractor model in the world,” he added, noting that there are a number of “pretty stark” differences between Uber’s and Bolt’s models.