eCommerce Checkout Platform Bolt Raises $68 Million in Funding
Bolt, the San Francisco-based startup that operates an eCommerce checkout platform in the cloud, raised $68 million in venture funding bringing its total capital raised to date to $90 million.
The Series B round of funding was led by Activant Capital and Tribe Capital and included personal investments from current and former retail and brand executives from REVOLVE, Crocs, Forever 21 and Jet.com among others. It’s the largest round of funding the startup has raised since launching in January of 2018.
Founder and Chief Executive Ryan Breslow credits the interest on the part of venture capitalists to Bolt’s ability to take something complex and make it easy for retailers to integrate into their back end. As it stands, many online merchants use different software to enable checkout, which adds complexity. Bolt’s cloud-based platform combines checkout, payments and fraud protection in one product to allow retailers to better compete against Amazon which has perfected the one-click shopping experience.
“We have a product that's both important and difficult to build in a very big market,” said Breslow. “Traditionally retailers had to build their own checkout and buying experience.” That has proved difficult for online merchants big and small alike which end up losing business to Amazon. “One of the biggest reasons people shop on Amazon is because it’s convenient,” he said.
Since coming out of stealth mode, Bolt has obtained annualized payment processing volume of more than $1 billion, conducted more than 1.5 million transactions through the platform, and helped customers realize more than $25 million in new sales. It’s success so far flies in the face of Google, which tried to do what Bolt is doing with Google Checkout, only to shutter the service in November of 2013.
“There are thousands of different tools eCommerce companies use,” said Breslow. “Couple that with discounts, loyalty payments, new user registration and all the things that happen at checkout and it was far more complex than Google thought.” Bolt, said the executive, is the plumbing that surrounds the checkout for e-commerce businesses allowing them to use their current system rather than a platform like Google Checkout that needed to be integrated.
Bolt’s success comes at a time when the business of selling directly to the consumers is booming. Thanks to the Internet and Amazon, scores of new brands are coming online selling everything from apparel to furniture. These brands are forgoing the middleman, selling direct to consumers online and in pop up stores around the country. One of the downsides is that these brands don’t have the buying experience that Amazon has, which hurts business. The more hoops a consumer has to go through the less likely they are to complete the sale. Called shopping cart abandonment, it's a major issue for lesser known brands online. That trend hasn’t been lost on venture capitalists and is one of the reasons Bolt was able to close its largest funding round to date, said Breslow. But Bolt isn’t the only one trying to help eCommerce companies process transactions. Square, the payment company founded by Twitter’s Jack Dorsey is a heavy hitter in the marketplace.
Proceeds from the capital raise will go to expand Bolts product offering and build out its engineering team. The company has grown from ten employees last year to more than 125 with staff coming from Google, Facebook, Uber, Airbnb, Pinterest, and Braintree. The money will also go to expand into new markets and to capture more business from enterprise companies. Bolt isn’t profitable to date, but Breslow said the company has “healthy” revenue and margins. With growth on its mind, it's reinvesting a lot of it to expand and continue to grow at a fast rate. He declined to comment on the company’s valuation.
The idea behind Bolt does appear to resonate with retailers that are looking for a way to take on Amazon. Bolt counts retailers with millions of dollars in annual sales to ones with hundreds of millions of dollars in yearly sales as customers. Of the retail executives that participated in the Series B round, Breslow said some will likely become customers while others personally invested because they get it. Bolt’s goal is to add more large retailers to its client roster as it moves forward. “We’re signing up bigger accounts with more payment volume,” said the executive. “Bolt is becoming a real enterprise platform. For bigger retailers with more resources, the problem isn’t any smaller it’s far greater. The technical complexity reaches a point where it’s almost impossible to innovate or improve.”