Bolt valued higher as it diversifies into new business lines
By Jeph Ajobaju, Chief Copy Editor
Bolt the ride-hailing firm is now valued at $8.4 billion after a new $709 million investment that will help it create new business lines and expand beyond its current quarry in 10 cities.
The growth of the startup is notable amid challenges competitors face in the pandemic which chills the willingness of passengers to travel in a vehicle where they must share a closed-in space with others
That problem was exacerbated when businesses rebounded so quickly that many firms are experiencing a driver scarcity rather than a passenger deficit.
Bolt plans to use the funds to continue expanding to new geographies and bringing more consumers and partners to its “super app”.
Newer business lines, such as 15-minute grocery delivery service and Bolt Market, will build out “dark stores” in more cities to expand the service beyond the 10 where it is currently active.
Bolt (formerly Taxify) was founded eight years ago in Tallinn, Estonia with a mission to bring ride-hailing to emerging markets where others like Uber had yet to establish a strong foothold.
The strategy is used to expand across Central and Eastern Europe and Africa, attracting investors like China’s Didi that has a massive business in its own emerging market.
The focus of Bolt is on Europe and Africa where it discovered that many of the lessons learned from those early launches could be applied just as successfully in more industrialised countries, with more profitable payoffs.
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Diversification
Bolt’s diversification, which includes scooters, couriers, and now food delivery services in addition to automobiles, is part of its scaling strategy, Nairametrics writes.
Putting all of the alternatives and cross-promotions under a single app helps Bolt draw in new consumers and cross-sell to them with zero marketing costs, according to Chief Executive Officer Markus Villig.
“All of our business units are growing,” he said, disclosing that its ride-hailing unit “is seeing double-digit growth” and newer businesses, being smaller, are expanding even faster.
“The new trend of last year is that private cars are a bad thing and increasingly people want to use other forms of mobility.”
He said Bolt is working on partnering with more city governments to build out its services as part of their updated transportation strategies.
Higher commissions to beat competitors
Villig admitted that Bolt, too, faced some “short-term fluctuations” in demand when the lockdowns first started.
But it has made attracting and keeping drivers a major focus by paying better commissions than rivals (it pays between 10 and 20 per cent better than competitors).
“There is a massive lack of supply on these platforms, so we have focused on taking the most partner-friendly lowest commission.”
That has paid off well for Bolt, which has now seen monthly revenues more than double compared with sales pre pandemic.
“We started off in Eastern Europe and Africa because those markets had a bigger need. They had lower car ownership, higher unemployment [making for a market with many freelance drivers], it made sense.”