Bolt Built $11 Billion Payment Business on Inflated Metrics and Eager Investors (nytimes.com) 20
The start-up has had a meteoric rise, thanks to its charismatic co-founder, Ryan Breslow. But he sometimes stretched the truth to get there. From a report: In just over three years, Bolt has soared in valuation to $11 billion from $250 million, making it a Valley success story. But Bolt's meteoric rise has been fueled at least in part by a pattern of stretching the truth, according to interviews with over 50 former and current employees, clients, investors and others with whom Bolt discussed partnerships and fund-raising, as well as a lawsuit filed recently by a big customer. Most of them sought anonymity because they weren't authorized to speak publicly. In a rush to show growth, Bolt often overstated its technological capability and misrepresented the number of merchants using its service, some of the people said. In presentations to investors, it included the names of customers before verifying whether those merchants were able to use its technology. For a time, a fraud detection product it was pitching to merchants was more dependent on manual review than Mr. Breslow implied, according to a former employee. Mr. Breslow, 27, abruptly stepped down as chief executive in January, blindsiding some investors who, just weeks earlier, had put money into Bolt at an $11 billion valuation.
Now, Bolt's troubles are mounting. Some investors are looking to sell their stakes, while customers are questioning Bolt's technology. One of Bolt's biggest customers, Authentic Brands Group, which owns and licenses brands like Brooks Brothers, is suing the company for having "utterly failed to deliver on the technological capabilities that it held itself out as possessing." At an all-hands staff meeting last month, Bolt -- which has around 800 employees -- announced a three-month hiring freeze. Although it has cash to keep operating for a while, Bolt has talked to prospective investors about raising more funds, according to people with knowledge of the outreach. The implosion last month of Fast, a direct competitor, has only heightened investor scrutiny.
[...] The race to add merchants often meant that Bolt's sales team signed deals without always verifying that the merchant's payments technology would be able to integrate with Bolt. Ms. Neve said it was standard industry practice to include both prospective clients and those who had signed, even if they weren't using the service. Guess, for instance, was listed on Bolt's website as a "won" customer but never went live and was later removed, she said. An internal document viewed by The Times laid out what to do if a merchant asked whether Bolt's technology could integrate with its e-commerce platform. "If it's a big merchant, you probably want to act like our integration is already underway, not lie about it being done, but act as if it's close," the document said. "If it's a smaller merchant, gauge how much we want them vs how excited they are. If we want them a lot and they're not absolutely ecstatic, then act as if we'll build it." Ms. Neve said the company couldn't locate the document, but that it does not reflect "the practices or policies of Bolt." Bolt's business tactics raised questions from at least one big potential investor. As part of its due diligence, Tiger Global, a fund known for investing in hundreds of young start-ups, had talked to clients that Bolt said it had signed on. Based on those conversations, Tiger executives weren't so sure those merchants would use Bolt beyond a trial, according to two people involved in the conversations. To Tiger, Bolt's revenue projections seemed overly bullish and exaggerated, the people said. Tiger passed.
Now, Bolt's troubles are mounting. Some investors are looking to sell their stakes, while customers are questioning Bolt's technology. One of Bolt's biggest customers, Authentic Brands Group, which owns and licenses brands like Brooks Brothers, is suing the company for having "utterly failed to deliver on the technological capabilities that it held itself out as possessing." At an all-hands staff meeting last month, Bolt -- which has around 800 employees -- announced a three-month hiring freeze. Although it has cash to keep operating for a while, Bolt has talked to prospective investors about raising more funds, according to people with knowledge of the outreach. The implosion last month of Fast, a direct competitor, has only heightened investor scrutiny.
[...] The race to add merchants often meant that Bolt's sales team signed deals without always verifying that the merchant's payments technology would be able to integrate with Bolt. Ms. Neve said it was standard industry practice to include both prospective clients and those who had signed, even if they weren't using the service. Guess, for instance, was listed on Bolt's website as a "won" customer but never went live and was later removed, she said. An internal document viewed by The Times laid out what to do if a merchant asked whether Bolt's technology could integrate with its e-commerce platform. "If it's a big merchant, you probably want to act like our integration is already underway, not lie about it being done, but act as if it's close," the document said. "If it's a smaller merchant, gauge how much we want them vs how excited they are. If we want them a lot and they're not absolutely ecstatic, then act as if we'll build it." Ms. Neve said the company couldn't locate the document, but that it does not reflect "the practices or policies of Bolt." Bolt's business tactics raised questions from at least one big potential investor. As part of its due diligence, Tiger Global, a fund known for investing in hundreds of young start-ups, had talked to clients that Bolt said it had signed on. Based on those conversations, Tiger executives weren't so sure those merchants would use Bolt beyond a trial, according to two people involved in the conversations. To Tiger, Bolt's revenue projections seemed overly bullish and exaggerated, the people said. Tiger passed.
What's the story? (Score:2)
A charismatic founder of a start up behaves like a charismatic founder of a start up? The sales team at a startup behaves like a sales team at a start up?
Investors or customers surprised by any of this need to stay away from start ups.
Re: (Score:1, Informative)
He also told his employees that taking out huge loans using their stock options as collateral was a good idea.
SPOILER: It wasn't
Re:What's the story? (Score:4, Informative)
Source: https://www.axios.com/2022/02/... [axios.com]
Horrifying.
Re:What's the story? (Score:4, Insightful)
There's a difference between eager sales staff and outright fraud.
Re:What's the story? (Score:4, Insightful)
Here's some context: https://techcrunch.com/2022/01... [techcrunch.com]
That article aged really poorly.
What I still haven't been able to figure out is what innovation Bolt had supposedly come up with. Online checkout has been solved for over 20 years, what merchants are there exactly that are crying out for a new solution here?
Re: (Score:3)
The solution is actually a good one. Amazon has "buy it now" and their own entire department of folks who handle identity verification.
Bolt is offering that same technology platform to small businesses, too, and they're purporting to also handle risk management, identity verification, etc.
I'm not associated with them but I own or operate or am invested in a lot of small businesses and the idea of one-click purchasing for a customer without requiring them to sign up on my system and requiring me to verify t
Re: (Score:3)
It was supposed to be single sign-on across e-commerce sites. In theory this should be good for the vendors, as they don't have to handle payment processing, fraud mitigation, storage of payment methods, and so on themselves, and also good for the customer, as they don't have to sign up for every site, or trust as many parties with their personal data. In practice, they likely charged far too much for the services, while providing an API that lacked functionality, and requiring both the vendor and custome
Re: (Score:1)
The story is that Tiger Global actually passed on a deal.
Wikipedia didn't help here (Score:2)
Wikipedia didn't help here:
Bolt is an Estonian mobility company that offers vehicle for hire, micromobility, car-sharing, and food delivery services headquartered in Tallinn and operating in over 400 cities in over 45 countries in Europe, Africa, Western Asia and Latin America.
But this is about a "fin-tech" startup that has no wikipedia page although it managed to get a lot of investor money, as many such startups do. In any case, if we had a story about every overvalued startup, we'd... well, who am I kidding, we have lots of those, it's common for slashdot.
Re:Wikipedia didn't help here (Score:4, Informative)
The takeaway is this confirms the tech bubble has started to burst.
Re: (Score:2)
heh (Score:2)
[EVERY TECH STARTUP EVER] built on inflated metrics and eager investors.
Well... (Score:2, Funny)
It's not like the founder was making claims of a world-changing medical device or something. [go.com]
Maybe it's just me (Score:3)
...but it seems like we're approaching a new dot.com crash when (apparently gullible as fuck) venture capitalists start to realize that they were 'sold' a tissue of exaggerations, nearly-lies, obfuscations, and flat out falsehoods.
Mid 1990s crash incoming again, apparently?
Hey, well at least we'll get Aeron chairs on clearance again?
Comment removed (Score:4, Informative)
Impossible! (Score:3)
Metrics are the be all and end all. If a metric says something, it's the truth. Always and forever.
To claim that metrics were fiddled with is simply impossible.
* Yes, sarcasm.
Can you say "Wirecard" (Score:3)
I knew you could.
If not, https://www.youtube.com/watch?... [youtube.com]
Stretching the truth? (Score:1)
The picture is the summary is the article (Score:2)