Estonian ride-hailing startup Bolt doesn’t plan to go public in the “near term”, the firm’s CEO and co-founder Markus Villig has said, as it learns from the failed IPOs of rivals Uber and Lyft.

Bolt, formerly known as Taxify, has more than 30 million users across 35 countries in Europe and Africa.

It has raised more than €250m in funding since it launched in 2013 – a fraction of the $24.5bn raised by rival Uber before it went public last May.

However, both Uber and Lyft’s initial public offerings (IPOs) saw the value of the two US firms drop immediately after listing.

Neither company is profitable, with Uber losing $5bn in a single quarter in 2019.

Speaking at a press tour of the startup’s headquarters in Tallinn, Estonia, Villig described the amount of venture capital pumped into transportation startups as “absolutely ridiculous”.

“There has never been any industry that has raised so much money in tech before,” he said, pointing out that all of the social media companies combined raised just $6bn before going public.

Villig, who started Bolt when he was 19, believes that the vast injection of capital into the likes of Uber and Lyft created a culture that discouraged streamlined business operations.

“I think what we’re seeing is that there’s a big Silicon Valley tendency to think ‘hey, you know, it doesn’t really matter what the costs are, we’ll grow really quickly, we’ll try to kill all the competition, and then eventually, we’re going to have a monopoly and that it doesn’t really matter what the costs are.’”

This approach may have worked for the likes of Google and Facebook, he said, but “you cannot apply the same playbook to every sector”.

Bolt IPO: “We don’t need to raise that much funding to grow”

Bolt’s lower funding levels have forced the company to keep costs down from the outset, said Villig. Bolt is not yet profitable overall, but has created a clearer path to profitability. In 2019, it lost €61m on gross bookings of about €1bn.

“One of the benefits of being frugal is that we don’t need to raise that much funding to grow,” Villig said. “So more than two-thirds of the countries [where Bolt is] running today are already profitable in themselves. That means that we’re not that much dependent to raise funding. So eventually, most likely, we will IPO, but it’s not a near-term necessity.”

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Bolt keeps costs down by spending very little on marketing, instead relying on word of mouth to gain new customers. Estonia is also a more cost-effective HQ than Silicon Valley, and its automated driver verification also helps keep costs down.

The company does not plan to launch in the US, where Uber and Lyft dominate. Instead, it is focusing on markets it stands a better chance of success in, such as Europe and Africa.

Bolt is also expanding into other markets. Last year it rolled out a food delivery service in select locations. It is also expanding its electric scooters service, and exploring car rentals for weekend trips.

Bolt now has more than 1.5 million customers in London since it launched last May, following a botched attempt in 2017 when it tried to launch without an operator’s license.

Asked what stage the company would need to be at in order to consider a Bolt IPO, Villig said it would be to reward employees and shareholders, rather than raise additional funds.

“Ultimately, I think it’s more about liquidity to the employees and to the shareholders and so on,” he said.

“All of them are here for the long term. All of them are willing to wait for a few years, and most likely, eventually, people want to have some sort of liquid return for the hard work they’ve done over the years. And that’s one of the easiest ways to get it.”


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