Bolt Near Deal to Raise $450 Million at $14 Billion Valuation
The Takeaway
• Founder Breslow to return as CEO
• New round would value it at $14 billion
• Existing investors have to increase investment
As startup founder comebacks go, this may rank as one of the most remarkable.
Bolt founder Ryan Breslow is returning as CEO to the embattled e-commerce startup, two and a half years after he stepped down. And he potentially comes with another $450 million: The company is finalizing a $450 million Series F funding round from investment firms in the United Arab Emirates and the U.K. that will value Bolt at $14 billion, up from its $11 billion round in 2022 and far higher than its valuation in a share buyback arranged by the company earlier this year.
Bolt couldn't immediately be reached for comment.
The new capital, detailed in a letter sent to Bolt investors by interim CEO Justin Grooms, comes with an expensive ultimatum for existing investors. They have to agree to buy into the new round in a proportion that is double their existing percentage stake. If not, their preferred shares automatically turn into common stock, losing preferences that typically give the investor more rights in a sale or public offering. And the company says it may buy back many of those shares for about a penny.
The aggressive demands on its investors add to the series of unusual funding moves, often driven by Breslow, that have roiled its shareholders over the years. It also comes five months after Bolt’s board forced out Maju Kuruvilla, the former Amazon executive who had succeeded Breslow in 2022. Kuruvilla was replaced by Justin Grooms, Bolt’s global head of sales, as interim CEO.
During the pandemic e-commerce boom, Bolt emerged as the best funded in a group of startups selling merchants software to enable the kind of ‘one-click checkout’ that made Amazon shopping so seamless.
Breslow, a young Stanford University dropout, proved a master fundraiser. He raised most of its nearly $1 billion in capital from firms in back-to-back rounds between 2020 and 2022 from investors including BlackRock and General Atlantic.
But attempts to raise even more, at a valuation of $14 billion, faltered as its business soured. Bolt earns the bulk of its revenue by taking a percentage of the transactions that go through its checkout software.
Over the next two years since the failed raise, Bolt’s revenue barely budged. In the first nine months of 2023, Bolt’s revenue totaled $19 million, essentially flat from the same period the year earlier, The Information reported earlier this year.
Since then, it’s gone through a series of board changes and disputes with its investors.
Earlier this year, it offered to buy shares back from investors at a valuation of $300 million, down roughly 97% from its late 2021 valuation.
The offer was masterminded by Breslow, who was seeking to regain control of the company, investor Activant Capital alleged. Breslow pushed for the buyback to retain his controlling stake in the company.