By
Steve Muchoki
February 9th, 2024
Bolt has intimated plans to become profitable in 2024 and leverage its African presence, while mulling a potential public listing in 2025.
Ride-hailing and food delivery startup Bolt expects to be profitable within the next 12 months ahead of a planned IPO in 2025. The Uber rival, valued at over $8 billion, generated 628 million euros from investors in January 2022 and expects to report post-operating income profitability in 2023.
In an interview, Bolt CEO Markus Villig stressed the Estonian company’s intentions to attain profitability next year. The 29-year-old chief executive added that Bolt would not raise external capital through another funding round. Instead, the Tallinn-based mobility company will float an initial public offering in 2025. However, Villig also pointed out that a final decision on Bolt’s IPO ambitions will depend on market conditions.
Defending Bolt’s pricing model, Villig explained:
“Our philosophy is not always to be the cheapest rider … the mistake that some platforms make is that if you only focus on the lowest prices, you can end up with very bad availability of cars because drivers will not be happy.”
Ride-hailing is Bolt’s most lucrative business and sees the company charge as high as 23% of fare rates as commission from drivers. However, the mobility platform also charges far less (10%) if drivers opt for promotional schemes like putting Bolt stickers on their cars.
In addition to ride-hailing, Bolt offers grocery delivery, car-sharing, and micromobility (electric scooter) services. Although the European company operates in over 500 cities in more than 45 countries globally, it has a renewed focus on Africa.
Bolt to Become More Profitable Even as Its Priorities Increased Visibility in Africa
Bolt has a solid customer base of 50 million in Africa, around a third of its global customer numbers. The company has a strong presence in West Africa and seeks to scale up to other sections of the region. Therefore, Bolt’s agenda to become profitable would likely factor into the African market and explore opportunities there. As Villig put it:
“Out of all the African countries, we’ve so far only launched in seven… over the next 10 years, Africa remains a massive opportunity for us.”
Bolt also hopes to address the payment landscape in Africa, where there are more people with mobile phones than bank accounts. Several Africans remain unbanked, meaning they do not use debit or credit cards, which often poses a limiting factor in transactions. Commenting on this headwind, Villig said Bolt could “go into that” in the near future.
Although Bolt has yet to disclose its revenue publicly, the company CEO said it does single-digit billion-dollar transactions yearly. Furthermore, the ride-hailing platform also expects its grocery business to at least break even in two to three years.
Bolt faces stiff competition in grocery and food delivery from other mobile platforms such as Just Eat Takeaway.com and Uber Eats. However, the industry, as a whole, also faces growing macroeconomic restraints, including more stringent government oversight. As a result, Uber Eats and Just Eat Takeaway.com charge more for deliveries to cover higher wage costs.
The food delivery sector experienced a boom during the pandemic as customers stuck at home ordered edibles to their doorsteps. However, the trend has tapered off, with the same customers forced to cut back on discretionary spending due to surging prices.