Estonia has emerged as a leading hub of startup innovation, producing an impressive number of unicorns despite its small population of just over 1.3 million people. With more than ten unicorns, Estonia is recognized as one of the most startup-friendly nations globally. Among its standout successes are Wise and Bolt, two companies that have transformed their respective industries. Wise went public with its IPO in 2021, and there are now rumors that Bolt might be preparing for a similar move.
Bolt—On the Path to an IPO
Founded by Markus Villig in 2013, Bolt started as a ride-hailing service and quickly expanded into multiple sectors, including food delivery, electric scooters, and car rentals. Today, Bolt operates in over 600 cities across more than 45 countries, making it one of the fastest-growing mobility platforms in Europe and beyond. Like Wise, Bolt has remained committed to a customer-centric mission, providing affordable and efficient urban mobility solutions in underserved markets.
Bolt’s growth strategy bears significant similarities to Wise’s. Both companies aggressively entered markets that larger competitors had either ignored or inadequately served, establishing a niche and building strong customer bases. Both companies also share a founder-led approach, with Markus Villig playing a crucial role in guiding Bolt, much like Kristo Käärmann and Taavet Hinrikus did at Wise. This founder-driven leadership has ensured that the core values of both companies have remained intact throughout their rapid growth.
Unlike Wise, however, Bolt has remained privately held, opting to raise funds through venture capital rather than turning to public markets. In 2022, Bolt raised €628 million from investors, including Sequoia Capital and Fidelity Management, which brought its valuation to €7.4 billion. The company also received an additional €126 million in funding to expand its rental car fleet. Despite staying private, there are growing indications that an IPO could be on the horizon, potentially to support further expansion and provide liquidity to early stakeholders—similar to what Wise did in 2021.
Recently, Bolt secured a €220 million ($235 million) credit facility led by Citigroup Inc. along with other lenders, signalling another step towards an IPO. Markus Villig, CEO and co-founder, stated that the financing “provides us with additional flexibility as we work towards being IPO-ready.” Additionally, in July 2023, Bolt hired a new chief financial officer from UK fintech Revolut Ltd. and announced its intention to achieve profitability within a year. The combination of new financing, strategic hiring, and a focus on profitability indicates that Bolt is laying the groundwork for a potential public listing.
Why Bolt Might Go Public
Several factors make the prospect of a Bolt IPO attractive. First, going public would provide liquidity to early investors and employees who have supported the company’s growth journey. Second, an IPO would enable Bolt to raise substantial capital to accelerate its expansion, particularly into new markets and for developing its range of services, such as electric scooters and food delivery.
Furthermore, an IPO could solidify Bolt’s position as a leader in urban mobility, especially as sustainability and efficient urban transportation are increasingly prioritized worldwide. With its focus on sustainability, Bolt could capture the increasing share of investors interested in environmentally friendly technologies.
The Story Behind Wise’s IPO
Wise, originally known as TransferWise, took a bold step by going public via a direct listing on the London Stock Exchange (LSE) on July 7, 2021. Unlike a traditional initial public offering (IPO), Wise chose a direct listing, avoiding underwriters and the creation of new shares. This approach aligned with Wise’s values of transparency and cost-efficiency—qualities that had helped establish the company as a leader in international money transfers.
There were several key reasons for Wise’s decision to go public. First was transparency. By listing directly, Wise broadened its ownership and provided liquidity for early investors and employees without diluting existing shareholders. This move also built greater trust with its customers, which was crucial for its growth strategy. Additionally, Wise’s profitability prior to its IPO differentiated it from many tech companies, giving investors confidence in its financial health.
The timing of Wise’s IPO was ideal. During the COVID-19 pandemic, interest in digital financial services was surging, as consumers and businesses sought faster, more cost-effective solutions for cross-border money management. The direct listing helped Wise achieve a valuation of £8 billion (approximately $11 billion), making it one of the largest tech listings in the UK in recent years. This milestone not only increased Wise’s visibility but also solidified its role as a major player in the fintech space.
Wise Stock Post IPO, and the Story of Uber
Since its IPO in 2021, Wise’s stock has experienced notable volatility. Initially, Wise saw strong trading interest, with its valuation reaching around £8 billion. However, in the year following the IPO, Wise’s market capitalization dropped significantly, reaching a low of £2.98 billion—its lowest estimated valuation since 2019. This sharp decline has been attributed to a mix of macroeconomic challenges, including rising inflation, increasing interest rates, and overall market corrections in the technology sector, which have affected investor sentiment across the fintech space.
Uber, a direct competitor of Bolt in many markets, made history with its IPO back in 2019 as it became the biggest first-day dollar loss in IPO history in the United States. Originally valued at as much as $120 billion by Wall Street analysts, Uber’s market value settled at approximately $69 billion after its public debut—just over half of its initial valuation expectations. Ouch.
Will Bolt be Estonia’s next IPO?
As Bolt prepares for a potential IPO, there are important lessons to learn from the experiences of Wise and Uber. Wise’s IPO was a strategic move, built on a foundation of profitability and transparency, which ultimately positioned the company for sustained growth despite the volatility that followed. In contrast, Uber’s IPO serves as a cautionary tale; the company’s first-day dollar loss remains one of the largest in IPO history, highlighting the risks of entering the public market without a clear path to profitability. Bolt has the opportunity to learn from both of these precedents, and its recent steps, such as securing financing, hiring key talent, and focusing on profitability, indicate that it aims to avoid these pitfalls.
The timing of Bolt’s IPO remains uncertain, but based on the typical IPO process, it could realistically take one to two years to complete. The IPO journey involves several stages, including restructuring, preparing financial disclosures, and regulatory reviews. Given Bolt’s recent steps, such as securing strategic financing, the earliest an IPO could take place would be around Q1 or Q2 of 2025. By learning from both Wise’s and Uber’s IPO experiences, Bolt aims to make a significant impact when it eventually goes public. If Bolt continues on this path, it could not only become Estonia’s next major IPO but also set a new standard for mobility startups entering the public market.
– Jens Jurgenson