- Bolt, a major rival to Uber and backed by Daimler and China's Didi Chuxing, is trying to make sustainability and value its key pitches to cities as it fights for customers.
- Following tepid performances from SoftBank-backed Uber and Lyft since they went public, Bolt wants to demonstrate that transport companies are still great value.
- Uber faces losing one of its major markets after it failed on Monday to secure a new operating license for London. Should it quit the market, that leaves a gap for rivals such as Bolt to fill.
- "For us as a brand, we come from Europe and that means from the beginning we said we wouldn't do things like other companies did," Markus Villig, Bolt CEO, told Business Insider in an interview.
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Youth is no barrier for the best entrepreneurs, but it can take a long time to convince investors that their view of the market is wrong.
Markus Villig founded $1 billion-valued Bolt aged 19 in Tallinn, Estonia and is still Europe's youngest unicorn founder at 25.
In recent years, the CEO has spent time looking for investors who share his view of the urban transport space, namely that it's not a winner-takes-all market.
Villig's Silicon Valley peers have spent billions trying to prove him wrong, with mixed results.
Uber, Bolt's main rival, raised $20 billion before its public float this year to essentially outspend the competition and dominate the markets in which it operates. But investors are worried about that heavy spending, and the company's share price has wobbled post-IPO. Both Uber and its main US rival Lyft remain unprofitable.
Other "mobility" companies have followed the same playbook, to mixed success. Scooter startups such as Bird and Lime have raised billions to expand as rapidly as possible globally and to try and outgun the competition. Both remain unprofitable.
Villig said he's had to fight the narrative that there would only be one major ride-hailing company.
"Conversations with investors were tough in first few years because investors thought in the regular paradigms of the past and saw that there would be only one global winner," he told Business Insider in an interview. "It took us a lot of convincing to tell them that you need to work with cities which means they have local champions which can beat global companies.
"It took us many years to build up our case and prove that this was going to be the case."
For all that Villig talks to Bolt's differences, it is remarkably like Uber. It offers people cheap, on-demand cab rides through an app, relying on a network of contractor drivers who pay a cut of their fares to Bolt. Like Uber, it has branched out into food delivery and electric scooters in some cities.
And, like Uber, it ran into some regulatory trouble in its early days. When the firm first launched in London, it took a regulatory shortcut that meant it could launch quickly — and authorities quickly booted the firm out. Bolt was finally granted an operating license for London in 2019.
But a key point of difference is how much less Bolt has raised. To date, the firm has raised $244 million, significantly less rivals, from investors including German carmaker Daimler, Chinese ride-hailing giant Didi Chuxing, and Swedish investors Creandum. The company could be in line for another funding round in the coming weeks from investors including Goldman Sachs, according to Sky News.
Bolt claims to have more than 25 million users in over 30 countries globally since its launch in 2013 with a major focus on Europe and Africa. For comparison, Uber boasts 110 million users across 600 cities worldwide.
Meanwhile, the competition is consolidating. Uber pulled out of China in 2016 and sold its business to Didi Chuxing. Middle East competitor Careem sold to Uber in a $3.1 billion deal this year. Southeast Asian rival Grab acquired Uber's local business.
And Bolt will doubtless be helped by Monday's news that Uber did not have its London license renewed thanks to the city's regulator discovering fraudulent drivers.
Uber is unsurprisingly angry at the decision, since some 24% of its revenue globally comes from just five cities, including London, LA, the Bay Area, New York and Sao Paolo. "Any inability to operate in London, as well as the publicity concerning any such termination or non-renewal, would adversely affect our business, revenue, and operating results," Uber noted in a regulatory filing this year.
Bolt was quick to respond to the news saying: "We spent a year working with TfL on our successful London licence application and we continue to pay the utmost attention to the credentials of drivers we permit to use our platform," in a statement.
The company says it has occasionally been profitable despite being absent from the US market, according to Villig. Bolt remains private so it's hard to verify this claim.
Bolt talks up its sustainability credentials
Bolt has placed sustainability at the heart of its plans, something which Villig says has appealed to investors.
Bolt recently announced that it would create a dedicated environmental impact fund with seed capital of €10 million ($11 million) aimed at initiatives designed at offsetting the company's carbon footprint, including forest planting in Scotland and green power projects in Africa.
"When I started this business at 19 I had most of my life is ahead of me so in 30, 40 years I don't want to live in a world where millions of people have to mass migrate away from places that are no longer inhabitable," Villig added. "It's clear that politicians are not moving fast enough and consumers on the whole are not moving fast enough so companies need to step up. We have a responsibility to do something about it."
Sustainability also extends away from environmental projects into how the company is run. In an age where investors are questioning the value of capital intensive companies with uncertain paths to profitability, see WeWork, delivering value in a competitive space is part of Bolt's appeal.
"For us as a brand, we come from Europe and that means from the beginning we said we wouldn't do things like other companies did," Villig said. "We want to stand for better customer service, better pay for drivers, better privacy, working closer with cities, as a long term approach to get people out of private cars and through our carbon offset."