Bolt, a global ride-hailing company with presence in Nigeria has raised N7.41 billion ($109M) debt funding to bolster its business against the effect of the COVID-19 pandemic.
The funding came from Naya Capital Management, which also participated in the company’s $67 million Series C in July 2019. With the new funding, Bolts value has now risen to N741.28 billion ($1.9 billion).
Bolt in Nigeria
Since Bolt initially came to Nigeria in 2016 as Taxify, its rivalry with Uber has led to an expansion spree. The company moved from Lagos to Abuja, then Ibadan, Benin and Owerri. Generally, throughout its markets, the ride-hailing company has been generally embraced as it provided an alternative to Uber.
However, the success of the ride-hailing company in Lagos, one of its biggest markets, attracted the attention of the government. Over the last couple of months, drivers of ride-hailing companies in Lagos have faced a crackdown from authorities as the government said they did not have the necessary requirements to operate in the state.
Soon after the crackdown started, reports emerged that the state government was planning to regulate the ride-hailing sector. A licencing fee of N10 million along with a 10% commission for each trip will be charged by the state.
Although the regulation has not been imposed, if it does Bolt now has a huge influx of cash to help meet that need so that they can keep operating freely.
Impact of COVID-19 on Ride-hailing
Before COVID-19, Bolt said it has 30 million users from 150 cities across 35 countries globally. However, the shelter in place policy implemented due to global pandemic significantly affected revenue for the ride-hailing company.
In Nigeria, the company had to close operations for the 3 weeks, as its major markets in the country were on lockdown. To mitigate the effects the pandemic has on its business Bolt pivoted to services like delivery, which has boomed during the pandemic.
Bolt CEO believes that although the pandemic has forced them to change the way they operate the demand for mobility will still increase in the future.
“Even though the crisis has temporarily changed how we move, the long-term trends that drive on-demand mobility such as declining personal car ownership or the shift towards greener transportation continue to grow,”Markus Villig, Chief Executive Officer and co-founder Bolt
With the new funding, Bolt will be better placed to bolster the company against the economic effects of the virus and also expand its new verticals. Apart from this recent funding, a local media in Estonia has also reported that Bolt is seeking credit support from the Estonian government.
Bolt’s rival, Uber has similarly been plagued with finding profitability after ride-hailing dropped significantly. In recent weeks, Uber has laid off nearly 7,000 employees.
Bolt, however, was able to avoid that as it has been among the biggest beneficiaries of the Estonian government’s job retention measures. More than 500 employees in the country were covered in the states fund labour cost measures during April and May.
In summary, the new influx of fund will significantly help Bolt grow its new verticals In-city Business Delivery, courier services and food delivery across the world. In Nigeria, the company may even consider entering the competitive logistics market as no one knows when ride-hailing will recover.
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