Bolt Raises $75M Series C Funding - Online Checkout Wars

Bolt, a company providing online checkout solutions for retailers, revealed today that it has secured an additional $75 million in funding as part of its Series C round, increasing the total funding to $125 million.

This latest investment was spearheaded by WestCap and General Atlantic. Bolt’s CEO, Ryan Breslow, informed TechCrunch that the funding was obtained at approximately double the valuation from its initial Series C round. PitchBook estimates Bolt’s original Series C valuation at $500 million post-money, suggesting the Series C1 round now values the company around $1 billion.

The company has designated this recent funding as its “Series C1.” Breslow explained the decision to avoid labeling it a Series D, stating that Bolt anticipates its future Series D round will be considerably larger in scale.

The uniquely labeled Series C1 is noteworthy, but the funding event aligns with the overall expansion occurring within the checkout technology sector. Significant capital is currently being invested in addressing a specific challenge in the e-commerce landscape.

Fast, a competitor in the online checkout software market, secured $20 million in March. Additionally, Checkout.com, a company headquartered in England with a worldwide presence, raised $150 million in June at a valuation of $5.5 billion.

Bolt initially announced the first $50 million of its Series C funding in July. Consequently, this C1 event marks the fourth substantial investment in checkout technology this year and contributes to a growing pattern of rapidly expanding startups receiving two rounds of funding in 2020 – other companies achieving this include Welcome, Skyflow, AgentSync, and Bestow. 

Shifting focus from the market landscape, let’s examine Bolt’s ongoing development efforts and the reasons behind this new substantial influx of capital.

Series C1

Bolt provides a suite of four interconnected services: streamlined checkout experiences, payment processing, secure user accounts, and robust fraud prevention.

The company’s primary focus is its checkout solution, which it asserts delivers quicker completion times and improved conversion rates compared to industry standards. Bolt’s payment and fraud services are integrated with its checkout functionality to validate transactions and facilitate payment acceptance. Furthermore, Bolt’s user account system – prompting shoppers to securely save their information during their initial purchase – encourages repeat business, benefiting both customers and bolstering Bolt’s service offerings.

An expanding shopper base translates directly into a larger pool of accounts, enriching the data used by Bolt’s anti-fraud measures and checkout personalization capabilities.

Bolt is experiencing significant growth in its user base, reporting approximately a tenfold increase in the number of accounts created through its service this year. According to Breslow, the account total stood around 450,000 last December. It has now risen to approximately 4.5 million, with projections reaching 30 million by next year.

Considering the substantial growth in anticipated account creation, TechCrunch inquired about the confidence level associated with this projection. Breslow indicated a 90% confidence level, citing the recent partnership with Authentic Brands Group (ABG), announced last month. He noted that ABG’s customer base of 50 million shoppers supports the feasibility of reaching 30 million accounts.

(Competition within the checkout technology sector is intense, and companies frequently highlight gains in their reach. For instance, Fast recently announced support for WooCommerce. Fast, however, chose not to disclose processing growth figures to TechCrunch following that announcement.)

This growth in the number of shoppers has positively impacted Bolt’s overall transaction volume. The company reported processing around $1 billion in transactions this year, representing a roughly 3.5-fold increase from its 2019 gross merchandise volume (GMV). This growth rate suggests a GMV of approximately $286 million for Bolt last year, and the success of the ABG partnership will be a key indicator of future scalability.

Breslow conveyed to TechCrunch that Bolt anticipates tripling its GMV in 2021, projecting a figure around $3 billion.

However, estimating Bolt’s revenue requires more than simply applying a payment processing percentage to this figure. The company generates revenue not only from payment processing but also from subscription fees for its other services – such as fraud protection – utilizing a Software-as-a-Service (SaaS) model. This hybrid approach, combining payments and software, is becoming increasingly prevalent, although adoption rates vary across different software categories.

Supporting Bolt’s plans for GMV tripling and substantial shopper network expansion is its recent funding. The $75 million in new capital will be allocated to meeting market demand, targeting larger clients, and strengthening its engineering capabilities. Essentially, there is considerable demand for improved checkout technology, driving venture capital investment, and larger enterprises require more extensive customization and dedicated support, which Bolt intends to provide.

Given Bolt’s recent funding round, it is likely that competitors like Fast or Checkout.com will seek additional capital in the first or second quarter of 2021. Further updates will be provided as they become available.