The European Investment Bank (EIB) has given a sum of 50 million Euros to Bolt, a ride hailing service firm support its product development and research as well as the sustainability of its services. The investments will be used to foster growth in its ride-hailing business as well as improving their food delivery service. EIB is the nonprofit, long-term lending arm of the European Union, and this financing in the form of a quasi-equity facility.
According to a statement by EIB’s Vice President Alexander Stubb;
“Bolt is a good example of European excellence in tech and innovation. As they say, to stand still is to go backwards, and Bolt is never standing still. The Bank is very happy to support the company in improving its services, as well as allowing it to branch out into new service as well as allowing it to branch out into a new service fields. In other words, we are fully on board.”
With this latest investment, Bolt has raised more than €250 million in funding since opening for business in 2013, and as of its last equity round in July 2019 (when it raised $67 million), it was valued at over $1 billion. The funding means the company is keen at pursuing its growth plans squarely. Bolt’s existing backers include the Chinese ride-hailing giant Didi, Creandum, G Squared and Daimler (which owns a ride-hailing competitor, Free Now — formerly called MyTaxi).
Also known as venture debt, the financing is structured as a loan, where repayment terms are based on a percentage of future revenue streams, and ownership is not diluted. The funding is backed in turn by the European Fund for Strategic Investments, as part of a bigger strategy to boost investment in promising companies, and specifically riskier startups, in the tech industry. It expects to make and spur some €458.8 billion in investments across 1 million startups and SMEs as part of this plan.
Opting for a “quasi-equity” loan instead of a straight equity or debt investment is attractive to Bolt for a couple of reasons. One is the fact that the funding comes without ownership dilution. Two is the endorsement and support of the EU itself, in a market category where tech disruptors have been known to run afoul of regulators and lawmakers, in part because of the ubiquity and nature of the transportation/mobility industry.
“Mobility is one of the areas where Europe will really benefit from a local champion who shares the values of European consumers and regulators,” said Martin Villig, the co-founder of Bolt (whose brother Markus is the CEO), in a statement. “Therefore, we are thrilled to have the European Investment Bank join the ranks of Bolt’s backers as this enables us to move faster towards serving many more people in Europe.”
In statement by Paolo Gentiloni, the European Commissioner for the Economy addressing why the Bolt’s research and development strategy will enhance urban mobility : “Estonia is as the forefront of digital transformation in Europe,” said Paolo Gentiloni, European Commissioner for the Economy, in a statement. “I am proud that Europe, through the Investment Plan, supports Estonian platform Bolt’s research and development strategy to create innovative and safe services that will enhance urban mobility.”
Bolt tends to use the funding to specifically to develop their technology to “improve the safety, reliability and sustainability of its services while maintaining the high efficiency of the company’s operations.”
Besides improving their service nature, Bolt wants to expand more into Kenya around Nyeri, Meru, Embu, Nanyuki, Karatina, Kilifi and Malindi as the company cements its footprints across the country, which is all part of its plan to make urban transportation more convenient and affordable.
“Estonia is as the forefront of digital transformation in Europe,” said Paolo Gentiloni, European Commissioner for the Economy, in a statement. “I am proud that Europe, through the Investment Plan, supports Estonian platform Bolt’s research and development strategy to create innovative and safe services that will enhance urban mobility.”