Bolt is talking to SoftBank about its next funding round

Bolt could be raising funds in the next six months and SoftBank would be one of the investors.

Bolt is talking to SoftBank about its next funding round

Bolt—the archrival of Uber in emerging markets—is talking to SoftBank—the audacious telecom company cum investor—over its next round of funding.

It would be interesting to see how the conversation between both parties pan out because Bolt had just raised $67 million (₦24.2 billion) in a Series C round in July—a year after it raised $175 million (₦63.4 billion) to become a unicorn—and SoftBank recently lost $8.2 billion in WeWork's failed initial public offering (IPO).

SoftBank is a Japanese multinational conglomerate and through its $100 billion Vision Fund, it has invested in more than 69 companies across different industries, including fintech, health tech, real estate (WeWork), consumer and enterprise technology. In the transportation and logistics sector particularly, SoftBank has invested in 19 startups, including Didi Chuxing, DoorDash, Grab, Uber and Uber's Advanced Technologies Group—researching and building self-driving transportation.

Speaking on the sidelines of the 2019 Web Summit in Lisbon, Portugal, Markus Villig, CEO of Bolt (formerly Taxify) said, "Didi is one of our investors, so from there, we've had some talks with them [SoftBank]." Didi Chuxing, which emerged from a merger between Didi Dache and Kuaidi Dache, is the dominant ride-hailing company in China.

Bolt could announce a new round of funding in the next six months, Sifted reported. According to Markus, the next funding round is dependent on the roll out of Bolt's additional services: food delivery (Bolt Food), electric scooter (Bolt e-scooter) and motorbike taxis. Launched in August, Bolt Food is currently available only in Tallinn, Estonia capital.

The Estonian techpreneur told Sifted, "We expect we can roll those [services] out pretty cost-effectively, but if we see there's really, really great potential there, then we might be more aggressive and raise funding".

The pursuit of profit and market dominance

The competition in the transportation and logistics space, especially among ride-hailing companies such as Uber, Bolt, Lyft and inDriver, is fierce. They continuously experiment with new services as they strive to get their economics right, breakeven and eventually make profit.

> **Side note:** ["Uber may not be able to achieve or maintain profitability in the near term or at all".](

For instance, last month, Uber ran a two-week pilot of UberBOAT in Lagos. And more recently, it introduced Uber Money—a bundle of financial products, including Uber Wallet, Uber Credit Card, Uber Debit Account and Debit Card, that will be rolled out to drivers and riders in the United States later this year.

Competing with such a nimble and innovative rival like Uber, Bolt would expectedly be aggressive in pushing its additional services, if not for profit—since according to Markus, Bolt has had profitable quarters— but for growth and market dominance at least.

We launched our service in over 50 new cities last year. We have also attained profitability in several mature markets without making any concessions in terms of growth. We'll continue to raise capital and expedite growth when we find an investor under the right conditions. The company's main focus for expansion is aimed at new cities in Europe and Africa.

'Cast your bread upon many waters'

Technically, SoftBank has invested in Bolt—because Didi Chuxing, which is a beneficiary of SoftBank's Vision Fund, was part of Bolt's $175 million funding round last year.

Since Bolt launched in August 2013 in Estonia's capital, Tallinn, it has raised about $244 million (₦88.4 billion) from Ragnar Meitern, who recently invested in Kuda Bank, Taavet Hinrikus, Co-founder of TransferWise, Daimler—German automotive company, Korelya Capital and Didi Chuxing. It currently operates in over 30 countries, including 44 African cities across Kenya, Nigeria, South Africa, Tanzania and Uganda.

It makes good business sense for SoftBank to invest in Bolt, which is more likely to become profitable, as it will hedge their loss if their bets on Uber and its ilk fails.

SoftBank announced its first quarterly loss in 14 years, which resulted primarily from its investment in loss-making startups like WeWork and Uber, in the third quarter of 2019 on Wednesday. Lamenting about the loss, Masayoshi Son, CEO of SoftBank, said, "My investment judgement was poor in many ways and I am reflecting deeply on that. We created a monster in WeWork by investing billions [in it] only to end up bailing it out".

While Son is still bullish about WeWork and Uber, he would expectedly, henceforth, place more bets on startups with signs of profitability like Bolt, rather than cash-burning ones.

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