Bolt is a mobility-related app that offers various services, including transportation hailing, food delivery, and auto and scooter rentals.
Bolt earns money through commissions, e-scooters, automobile rentals, software subscriptions, and franchising agreements. Bolt’s business model is based on the marketplace.
Known initially as Taxify, Bolt was founded in 2013 and has risen to become one of the world’s most effective mobility solutions. Today, Bolt has a user base of over 75 million.
What is Bolt?
Bolt is a firm that provides vehicle-on-demand, micro-mobility, courier, and food delivery services. It is a formidable competitor to many other companies like Uber.
Bolt Business Model is based on charging its users for various services provided by the firm. The business model of Bolt is based on the marketplace.
It offers on-demand ridesharing of scooters and other modes of transportation in over 150 cities across Europe, Africa, Asia, North America, and several cities in South America.
Bolt was previously known as Taxify. Markus Villig created it in 2013 when he was 19 years old. He began his firm with €5000 borrowed from his parents.
He successfully started the business mTakso in August 2013 with the assistance of his parents and a developer. A year later, the company expanded internationally.
|Founded Date||August 3, 2013|
How Does Bolt Work?
Bolt provides taxi, food delivery, e-scooter, and automobile rentals through its app-based mobility platform in 150 locations.
The company offers these services in collaboration with independent contractors. The contractors are paid only when they complete a project, so they work on an as-needed basis.
Bolt works with local eateries and grocers, which then supplies the contractors with food and drinks.
Bolt is the platform’s operator, connecting available supply (in this case, drivers) with demand (customers) and enabling payments.
The app offers users the option of renting electric bikes and scooters, in addition to hailing vehicles and delivering food.
The Bolt Scooter Platform provides local businesses with the infrastructure and inventory to operate their scooter fleets.
This franchise model also applies to Bolt’s food delivery and ride-hailing services, enabling local operators to partner with Bolt and bring its products to their respective areas.
Finally, Bolt has built a software platform called Bolt Dispatcher that helps taxi operators to manage their fleets more effectively.
The Bolt app is available for download and uses on Android and iOS smartphones and tablets. Alternatively, users can access the service via a browser by using the Bolt Web App.
Bolt Business Model
Taxi or ride-sharing apps have grown in popularity worldwide in recent years. Uber and Bolt are the two most prominent companies that offer this service.
The Bolt app, created in 2013, began as a ride-sharing app for taxis but now offers food delivery in several countries.
Bolt established its partnership with Google in February 2020 (last year). The global pandemic affected ride-sharing applications around the world.
Bolt, however, had a positive outlook at the time. Uber and other companies have announced layoffs; on the other hand, Bolt has not made any significant layoffs or salary reductions.
The popularity of private automobile ownership is on the decline, and Bolt intends to pursue alternative modes of transportation that are environmentally friendly.
Bolt Business Delivery, a new offering, was announced in March 2020.
How Does Bolt Make Money?
Bolt earns money through commissions, e-scooter, and automobile rentals, software subscription fees, and franchising.
Bolt runs well through a marketplace business strategy. To operate its marketplace effectively, it must maintain consistent supply, in this case, restaurants and drivers, which matches current demand.
Bolt generates revenue in the same way that any other ride-sharing app does, namely through its consumers. Additionally, it provides food delivery services and earns revenue from this.
Bolt charges drivers a commission for every ride as a ride-sharing app. This is still 10% less than other platforms offering the same service.
Bolt consumers will pay less, and drivers will earn more money as a result of this reduction. The company was designed from the start to be cost-effective, which explains why it earns less money out of commission.
Bolt charges roughly Rs. 5 for outstanding service from local eateries as a food delivery app. This represents a significant reduction in restaurants’ fees to other aggregators of between 25% and 35%.
Numerous local restaurants have joined the Bolt Food partner program, attracted by the platform’s affordable delivery fees and business-friendly attitude.
The company operates on a trustworthy business model without any Chinese backing, making it an ideal fit for local businesses looking to register on the platform.
We will take a closer look at each of the company’s revenue streams in the following sections.
The Bolt app not only allows users to order food or get a cab, but they can also rent e-scooters and vehicles nearby. Scooter users pay an unlocking fee of €1, plus an additional $0.15 for each minute they use their scooter.
Users can pay a charge per minute for its car company (dubbed Bolt Drive). Additionally, a reservation fee will be assessed if the vehicle is reserved for more than 15 minutes.
Bolt owns and operates the e-scooters and, potentially, the vehicles. As a result, the business retains all revenue generated.
Nonetheless, operating these types of companies can be incredibly costly, as they are required to recharge scooters and replace damaged ones regularly.
The majority of Bolt’s revenue comes from the different commission fees it charges drivers and eateries.
Drivers receive a commission of between 10% and 25% of the order’s final price. The proportion varies significantly depending on the place in which he is driving.
Bolt, therefore, charges restaurants a 10% commission on each order placed via the network.
Unfortunately, the company doesn’t publish its rates. Deliveroo charges between 20% and 35%, depending on the area. There is also a good chance that Bolt Food is nearby.
Bolt charges 10% as a service fee for each ride. Bolt also charges delivery and payment processing fees to compensate delivery drivers and payment networks such as Mastercard and Visa.
Bolt’s dispatch software sale to taxi companies is another revenue source, albeit a minor one.
The software takes a driver’s location and a custom queue into account when it calculates automatic dispatch.
Moreover, the company has its Android and iOS apps which help taxi firms to attract more customers.
Bolt (or, more precisely, Taxify) was founded upon the dispatch software model.
It paid a monthly subscription fee of between €12 and €15 for each driver in the system at the time. The pricing structure is almost certainly still in place.
Finally, Bolt earns money through a franchising strategy that enables entrepreneurs to use the company’s technology to launch local ride-hailing services.
The franchising concept enables entrepreneurs to use Bolt’s brand recognition and technological prowess. This results in a significant reduction in their time to market.
To join, prospective partners must have the appropriate financial backing and a local network.
While not disclosed, it is reasonable to presume that Bolt and its franchisees have some form of revenue-sharing arrangement.
This means that the corporation takes a share of the revenue generated by the local partner.
What is Funding and Valuation of Bolt?
Crunchbase reports that Bolt has raised $1.3 billion in debt and equity funding throughout twelve rounds.
A few noteworthy investors are D1, Creandum, Niya Capital, G Squared, and Sequoia Capital.
Bolt currently has a valuation of $4.75 billion, following a $713 million Series E financing in August 2021.
What is the Revenue of Bolt?
Bolt’s most recent revenue data dates back to 2020 when the firm earned €221 million in yearly revenue, an increase of €73 million over the previous year’s revenue of €148 million.
Success Story of Bolt
Bolt was formed in 2013 in Tallinn, Estonia, by Markus (CEO), Martin Villig, and Oliver Leisalu.
Markus was destined to be a technological entrepreneur from an early age. The most influential person in his life was probably his brother Martin.
He was one of the first employees at Skype and later established his own business.
Markus established his first entrepreneurial venture during his high school years by developing websites for local businesses.
Markus and Martin conceptualized Bolt while still in high school.
They found ordering a cab in Tallinn, their base of operations, to be cumbersome. There were a limited number of operators in the city, resulting in high prices and long wait times.
The business, formerly known as mTakso, was rebranded as Taxify and served as a taxi aggregator.
The prototype of the app was developed by Markus with money borrowed from his parents. A few hundred taxi drivers in the area signed up for the launch of the app in August 2013.
Once the app went live, he discovered that some drivers had entered fake contact information. This resulted in the app only having a limited number of real drivers to choose from.
This inspired Markus to walk to taxi stands, explain the program to drivers, and have them sign up alongside him.
He spent roughly six months convincing drivers, all while completing his first semester of undergraduate Computer Science.
He subsequently convinced his brother Martin and Oliver Leisalu, a freelance software engineer, to join him as co-founders full-time.
Oliver updated the code base nearly entirely, including the ability for customers to view a driver’s whereabouts in real-time.
Taxify raised its first seed round, netting them $100,000 from several angel investors, with his co-founders on board.
Taxify was operating in Estonia at the time and Latvia, where it had recently expanded.
The company’s growth was accelerated further when it lifted its cab-driver-only restriction, effectively allowing anyone to drive for Taxify.
As a result, the team closed their second fundraising round in December 2014, raising €1.4 million.
Taxify discreetly expanded into other countries over the next few years.
It was difficult for Uber to raise outside funding because investors believed ride-hailing was a winner-take-all business and that the company would soon dominate the world.
Uber raised nearly $24 billion in its first four years, while Taxify raised less than $5 million in its first four years. The formerly favorable image of the company began degrading rapidly.
Damning studies revealed an exceedingly toxic corporate culture that was actively promoted from the top by the company’s erratic CEO Travis Kalanick.
CEO Kalanick stepped down from his role in June 2017 after scores of senior staff left.
Other ride-hailing businesses have begun to capitalize on Uber’s deteriorating position. Uber already divested itself of its Chinese operations to Didi Chuxing. Subsequent exits occurred in Southeast Asia (Grab) and Russia (Yandex).
And Didi was instrumental in Taxify taking the next step. Taxify expanded its reach into new and existing areas, including Hungary, Romania, South Africa, Nigeria, and Kenya, after the Chinese ride-hailing giant invested an undisclosed sum in the company in August 2017. There were 2.5 million Taxify users at the time.
Taxify’s pricing structure provided a unique benefit over its American counterpart. Often, the company charged only 15% in commissions, whereas Uber sought twice that amount.
Taxify’s cost structure was much cheaper than Uber’s. A software engineer in Tallinn would cost around one-third of what a developer in San Francisco would earn.
Additionally, Taxify did not waste billions of dollars research self-driving cars, contrary to Uber.
Taxify was thus able to enter more competitive markets, such as Paris and London. This was a more difficult task than expected.
Taxify was forced to shut down by Transport for London (TfL) just three days after starting in the English city, claiming that the site is not a permitted private hire operator.
Taxify had previously acquired City Drive Services, a local taxi company with over 3,000 drivers, to comply with regulatory standards.
Taxify made an impression in Australia (in tandem with ridesharing platform Ola) apart from Paris.
Taxify raised $175 million in May 2018 from Korelya Capital and Taavet Hinrikus, the creator of Estonian fintech company TransferWise.
Taxify was valued at $1 billion in the investment round, making it a unicorn just five years after beginning.
Taxify had more than 10 million users at the time, more than four times the number it had a few months prior in August.
Taxify began expanding into other mobility-related verticals after amassing a sizable war chest.
Paris was the debut city for the Bolt electric scooter in September 2018. It adopted that name a few months later, in March 2019.
Additionally, the corporation was able to re-enter London. It was initially marketed under the brand name Hopp before being rebranded as Bolt in June 2019.
Bolt was then present in 30 countries, primarily in Europe and Africa.
Since Uber was burning through billions in other markets, like the United States, it lacked the resources essential to expand in more underdeveloped nations.
Bolt capitalized on this frequently by aggressively discounting its platform.
Perhaps one of Bolt’s most significant actions was its August 2019 entry into food delivery. Once the coronavirus pandemic began wreaking havoc across the globe, the food vertical became its safety net.
As a result, Bolt’s passenger travels decreased by more than 70%. The corporation was forced to exit Australia entirely.
However, the company’s substantially reduced cost base would be highly beneficial in mitigating the virus’s impacts.
While Uber was forced to lay off thousands of staff, Bolt retained all of its personnel. Rather than that, Bolt raised an additional €100 million in May 2020, putting the company at €1.7 billion.
The money enabled the company to stay viable and grow its meal delivery service exponentially.
By the end of 2020, it was clear that Bolt would not only survive but would emerge from the crisis as a significant competitor to the likes of Uber.
Strategically, the company is developing into a full-fledged mobility platform capable of meeting all users’ transportation demands.
To that end, Bolt said in November 2020 that it would invest a combined €100 million in 2021 to establish itself as Europe’s top in the e-scooter category.
Bolt continued to add capital to its balance sheet to realize that objective. In December 2020 and August 2021, the company will raise a further €150 million and €600 million, respectively. Additionally, it created a car-sharing service that allows customers to borrow temporary vehicles.
Despite the company’s meteoric rise, its expansion has not been without setbacks. There had been numerous incidents of guests being harassed (sexually) by drivers.
Bolt responded by implementing a variety of measures, including SOS buttons within the app.
Additionally, its drivers have objected to some of the company’s decisions. For instance, in March 2021, drivers in Johannesburg temporarily uninstalled the app due to the platform’s rising charges and safety concerns.
Numerous competitors, including DoorDash and Uber, have encountered similar difficulties in the past.
Bolt now has over 75 million users in 45 African and European countries. Additionally, the organization now employs over 2,000 individuals.