Bolt Raises Funds to Help Grab Ridership as Uber Cuts Back

(Bloomberg) -- Bolt Technology OU closed a new funding round, boosting the Estonian ride-hailing company’s valuation by more than half, to help finance its growth and take advantage of recovering demand for transportation.

The Tallinn-based company formerly known as Taxify, a rival to Uber Technologies Inc., received 100 million euros ($110 million) from Naya Capital Management, bringing total funds raised by Bolt to more than 300 million euros, it said on Tuesday. The investment valued the company at 1.7 billion euros, compared with $1 billion in its last funding round.

Operating in more than 150 cities across Europe and Africa, Bolt has expedited the opening of new services in the past months like food delivery covering 12 countries and a new courier service. Business is growing “in double digit numbers” every week after hitting the lowest point in the crisis almost two months ago, Chief Executive Officer and co-founder Markus Villig said in an interview.

“Our goal is to be the biggest company in all our markets by orders and volumes after the crisis,” Villig said. “Uber clearly is focusing on its home markets, which are the U.S. and Latin America, and on the other hand they are cutting costs. We have a good opportunity to emerge even stronger in Europe and in Africa in the next 12 months.”

Didi Chuxing

Uber last week announced another round of job cuts as part of efforts to focus on a few key regions and businesses to survive the pandemic, while its main alternative in North America, Lyft Inc., is cutting about 17% of staff, furloughing more and reducing salaries.

A pull-back by Uber and Lyft “is really an opportunity for somebody else that has the cash to invest in these businesses and support them and look to consolidate market share,” said Bloomberg Intelligence analyst Mandeep Singh. “There is a lot of private equity capital that’s trying to chase growth in this area but that’s definitely not the case in the U.S. anymore.” Still, he said Bolt faces a challenge of building customer loyalty in ride-sharing and food delivery.

As the crisis hit, Bolt carried out some initial “information gathering” about state aid options in Estonia but then dropped that plan and tapped the market instead, Villig said.

Launched in 2013, the Didi Chuxing and Daimler AG-backed company has more than 30 million users globally. Bolt has been among the biggest beneficiaries of the Estonian government’s job retention measure.

©2020 Bloomberg L.P.