Bolt is an app that offers various mobility-related services, including ride-hailing, food delivery, as well as e-scooter and car rentals.
Bolt makes money via commission fees, e-scooter and car rentals, software subscription fees, as well as franchising fees. Bolt operates on a marketplace business model.
Launched in 2013 as Taxify, Bolt has grown to become one of the world’s leading mobility platforms. It now counts over 75 million users.
What Is Bolt?
Bolt is an app-based mobility platform that offers ride-hailing, food delivery, as well as e-scooter and car rental services to customers in over 150 cities.
The company works together with independent contractors to offer these services. Those contractors work on an on-demand basis, meaning they only get paid when fulfilling a job.
Similarly, Bolt partners will local restaurants and supermarkets, which then provide the food and beverages that are being delivered by the contractors.
As the operator of the platform, Bolt takes care of facilitating payments and matching available supply (here: drivers) with demand (customers).
Apart from its ride-hailing and food delivery services, users can also book electronic bikes and scooters via the app.
Bolt has also developed the Bolt Scooter Platform, which allows local entrepreneurs to take advantage of Bolt’s infrastructure and product supply to operate their own scooter fleets.
This franchise model also extends to its food delivery and ride-hailing products, thereby allowing local operators to partner with Bolt and bring its products to their home markets.
Lastly, Bolt has also developed a software called Bolt Dispatcher, which enables taxi companies to effectively manage their fleet.
The Bolt app can be downloaded and used on both mobile phones and tablets that run Android or iOS software. Alternatively, users can use the Bolt Web App to access the service via a browser.
How Bolt Started: Company History
Bolt, headquartered in Tallinn, Estonia, was founded in 2013 by brothers Markus (CEO) and Martin Villig as well as Oliver Leisalu.
From an early age, Markus was already set to become a technology entrepreneur. His brother Martin was probably his biggest influence as he became one of the first employees at Skype and subsequently founded startups himself.
During his high school years, Markus began his first entrepreneurial endeavor by building websites for local businesses.
Markus, who was still attending high school at the time, and Martin were the ones that developed the idea for what would eventually turn into Bolt.
At the time, ordering a cab in their home base of Tallinn was an extremely frustrating experience. The city was dominated by a few operators, which limited supply, thus leading to high prices and long waiting times.
In the very early days, the business was launched under the name mTakso, which was later rebranded to Taxify, and was an aggregator of local taxis.
Markus borrowed €5,000 from his parents to build the first prototype version of the app. He then approached dozens of local taxi drivers, of which around 100 signed up for the app’s launch in August 2013.
Unfortunately, as the app went live, he realized that many drivers had provided false contact details. The app, therefore, only had a few actual drivers available for bookings.
This prompted Markus to walk to the taxi stands himself, walk drivers through the app, and have them sign up next to him. After about six months of trying to convince drivers, all while pursuing his first Computer Science semester in university, the app finally began to take off.
He then convinced his brother Martin as well as Oliver Leisalu, a freelance software developer at the time, to join him as full-time co-founders. Oliver almost completely rewrote the code base, for instance allowing customers to see a driver’s location in real-time.
With his co-founders on board, Taxify was able to raise its first-ever seed round, netting them $100,000 from a variety of angel investors. At the time, Taxify was operational in Estonia as well as Latvia where it had just expanded to.
The next accelerant in its growth came when it removed its cab-driver-only restriction and essentially allowed anyone to drive for Taxify. As a result, the team was able to raise their second round of funding, worth €1.4 million, in December 2014.
Over the course of the following years, Taxify quietly expanded into new countries. Unfortunately, the team had serious struggles in raising outside funding since investors were convinced that ride-hailing was a winner-take-all market – and Uber was destined to become the unquestioned global leader.
While Taxify raised around $5 million throughout the first four years of its existence, Uber managed to source over $24 billion during that very same time span. Nevertheless, its positive image soon began to crumble.
Damning reports revealed an extremely toxic company culture that was supported from the very top by its eccentric CEO Travis Kalanick. After dozens of senior executives left the company, CEO Kalanick, in June 2017, eventually stepped down from his role as well.
Other ride-hailing startups began to take advantage of Uber’s weakening position. Uber had previously sold its Chinese business to Didi Chuxing. Subsequent exits in Southeast Asia (Grab) and Russia (Yandex) followed suit.
And it was Didi that helped Taxify to take the next step. In August 2017, the Chinese ride-hailing giant invested an undisclosed sum into Taxify and helped it to strengthen its presence in new and existing markets, including Hungary, Romania, South Africa, Nigeria, and Kenya. At the time, Taxify had 2.5 million users.
One distinct advantage that Taxify had over its American counterpart was its pricing structure. The company often only charged 15 percent in commissions while Uber demanded twice as much.
This was grounded in the fact that Taxify’s cost structure was simply much lower compared to Uber’s. For instance, hiring a software engineer in Tallinn would only cost a third of what a San-Francisco-based developer would earn. Additionally, unlike Uber, Taxify did not burn through billions of dollars by investing into research on self-driving car technology.
As such, Taxify was able to expand into more competitive locations, including metropolitan areas like Paris or London. Unfortunately, the latter proved to be a bigger challenge than initially expected.
Just three days after launching in England’s capital, the Transport for London (TfL) forced Taxify to shut down, stating that the platform is not a licensed private hire operator. To meet the regulatory requirements, Taxify had previously purchased City Drive Services, a local taxi company with over 3,000 drivers.
Apart from Paris, Taxify also made a big splash in Australia where it launched in Sydney and Melbourne (alongside Indian ride-hailing platform Ola).
In May 2018, Taxify raised $175 million Korelya Capital and Taavet Hinrikus, founder of Estonian FinTech startup TransferWise. The funding round valued Taxify at the $1 billion mark, making it a unicorn just five years after launching. At the time, Taxify had more than 10 million users, four times the count it had a few months back in August.
With its loaded war chest, Taxify began to expand into other mobility-related verticals. In September 2018, it launched an e-scooter solution in Paris under the brand name Bolt. That is the name it completely rebranded into a few months later in March 2019.
The company was, furthermore, able to re-enter London again. It first launched under the brand name Hopp and later, in June 2019, also was changed to Bolt. At that point, Bolt was present in 30 countries, mainly centered around Europe and Africa.
Since Uber was busy burning through billions in other territories such as the United States, it did not have the necessary capital to invest in more under-developed regions. Bolt took advantage of that, oftentimes by marketing its platform with aggressive discounts.
Possibly one of Bolt’s biggest moves was its expansion into food delivery back in August 2019. The food vertical ultimately became its safety net once the coronavirus pandemic began wreaking havoc across the world.
As a result, Bolt’s passenger trips fell by over 70 percent. The company even had to pull out of Australia. However, the company’s significantly lower cost base would prove to be highly advantageous in weathering the effects of the virus.
While Uber had to let go thousands of employees, Bolt was actually able to keep all of its workers. Instead, Bolt raised another €100 million in May 2020, valuing its business at €1.7 billion. The funding allowed the company to not only stay afloat but double down on its food delivery business.
By the end of 2020, it not only became evident that Bolt would survive, but that it might actually come out of the crisis as a serious competitor to the likes of Uber.
Strategically, the company is now focusing on becoming a full-fledged mobility platform that satisfies all the possible transportation needs users might have. To that extent, Bolt, for instance, announced in November 2020 that it would invest a combined €100 million in 2021 to become Europe’s leader in the e-scooter segment.
To fulfill that vision, Bolt continued to add additional capital to its balance sheet. The company raised another €150 million and €600 million in December 2020 and August 2021, respectively. It, furthermore, launched a car-sharing product, allowing users to rent temporary vehicles.
Despite the firm’s rapid ascend, its growth hasn’t been without issues. There had been repeated instances of guests being (sexually) harassed by drivers. As a consequence, Bolt had implemented various measures, including SOS buttons within the app.
Additionally, its drivers had also protested some of the firm’s decisions. For example, in March 2021, drivers in Johannesburg deleted the app for two days in response to the platform’s increased rates and safety concerns. Many of its counterparts, including DoorDash or Uber, had faced similar troubles in the past.
Today, Bolt counts over 75 million users in 45 countries across Africa and Europe. Furthermore, more than 2,000 people are now employed by the company.
How Does Bolt Make Money?
Bolt makes money via commission fees, e-scooter and car rentals, software subscription fees, as well as franchising fees.
Bolt effectively operates on a marketplace business model. For its marketplace to function properly, it has to ensure steady supply (here: restaurants and drivers) which it then matches with existing demand.
Let’s take a closer look at each of the company’s revenue streams in the section below.
The bulk of the revenue that Bolt generates comes from the various commission fees that it charges to both drivers and restaurants.
Drivers pay anywhere between 10 to 25 percent in commission from the final price of the order. The percentage is primarily dependent on the location he is driving in.
Similarly, Bolt also charges restaurants a percentage commission for every order facilitated through the platform.
The company, unfortunately, does not publicize its rates. For reference purposes, Deliveroo charges anywhere between 20 to 35 percent (again, dependent on location). It can be assumed that Bolt Food is somewhere around that range as well.
Bolt, furthermore, imposes a service fee of 10 percent for each ride. On top of that, Bolt also charges delivery and payment processing fees, which are used to compensate delivery drivers as well as the payment networks (such as Mastercard and Visa).
Apart from ordering food or a cab, users on Bolt can also rent e-scooters and cars in proximity. With regards to the scooters, users pay a fee to unlock them (€1) and another €0.15 per minute of usage.
With regards to its cars business (called Bolt Drive), users pay a fee on a minute-basis as well. On top of that, if the car is reserved for longer than 15 minutes, a reservation fee will be applied as well.
The e-scooters and possibly vehicles are owned and operated by Bolt. As such, the company gets to keep all the income it generates. Nevertheless, running these types of operations can be extremely costly, for instance requiring them to regularly recharge scooters and replace the damaged ones.
Another revenue source for Bolt, albeit likely a small one, comes from selling its dispatch software to taxi companies.
The software allows for automatic dispatching based on a driver’s location and custom queues. Furthermore, it comes with its own Android and iOS app, thereby helping taxi companies to attract new customers.
As previously stated, the dispatch software actually has been the model with which Bolt (or rather Taxify) got started. Back then, it charged a monthly subscription fee of €12 to €15 for each driver in the system. The pricing structure is likely still in place.
Lastly, Bolt also generates revenue via a franchising model which allows entrepreneurs to use the firm’s technology to start local ride-hailing applications.
The franchise model allows business operators to take advantage of Bolt’s name recognition and technological prowess. This, in turn, significantly decreases their time to market.
Potential partners will have to possess the necessary financial backing as well as a local network to be able to join.
While not publicized, it can be assumed that Bolt has some sort of revenue-sharing agreement with its franchisees. This means the company takes a percentage cut from the income that the local partner generates.
Bolt Funding, Revenue & Valuation
According to Crunchbase, Bolt has raised $1.3 billion across twelve rounds of debt and equity funding.
Notable investors include D1 Capital Partners, Creandum, Naya Capital, G Squared, Sequoia Capital, and many others.
Bolt is currently being valued at $4.75 billion after raising a $713 million Series E round back in August 2021.
Bolt’s most recent revenue figures are from 2019 during which the company generated €148 million in annual income.