Hello to all listeners. Taavi Kotka and Hendrik Roonemaa are back in the studio, and we continue the tradition that we have managed to produce once a year under different names. Once a year, we've had a Christmas guest or an end-of-year guest. And since the shops, as I understand, are a bit mixed up with St. Martin's Day, St. Catherine's Day, Halloween, and Christmas, I haven't been to a shop in a while, but they say everything is mixed up for sale. So we're bringing our end-of-year show forward by a month and have decided to do our annual show with Markus Villig here in the first half of November. Hello, Markus.
Hello. Hello Taavi. Hi. Hi. I don't know, I don't remember when this tradition even started or how it formed. We definitely didn't have a meeting with you and agree that Markus has to come once a year, but I have a feeling it was Markus himself who told us that he would gladly come to our show once a year to talk about how Bolt is doing. What's your memory, Taavi?
No, I actually think it was the other way around, that we pestered him to come. But let's get right to it. Markus, how is Bolt doing?
We are doing very well. We have another record year, as we do every year. So we have managed to achieve very strong financial results. We have expanded into new countries. And what we are very pleased with is that we haven't had to increase the number of employees in the last two years. So our efficiency per person is increasing significantly.
But in that sense, startups have certain rules, right? Most startups are at the bottom, trying to get pre-seed and seed funding, and the better ones are already at Series A and so on. Bolt is already at a completely different level. For companies at this level, what are the indicators where investors say, 'Okay, well, I don't know, let's take... I don't know, for a company like Bolt, is 30% annual growth considered normal, or is that already too much?'
Well, look, when the numbers get very large, it also becomes difficult to achieve certain percentages, right? So let's put it this way, last year we did 1.7 billion euros in revenue. And if you look at how many companies in the world are even at that scale, it's a very small number. And of those, how many can grow even 5% a year is an even smaller number. So we are definitely in the world's top 1% with our current financial figures, and that's also why investors are still very interested in Bolt and why they don't pressure us to make a short-term profit, because they see that we can add tens of millions in revenue every year.
But in summary, this is the wish of all Estonians, right? Let's ask this at the beginning of the show. You once talked about an IPO plan and so on. What is Bolt's plan? Is it like, 'We're doing very well now, let's keep doing this for the next 50 years,' or is it an IPO, or will someone bigger decide that Bolt is so cool that they'll buy the whole thing? What will the path be?
Our ambition is clearly to build Bolt into one of Europe's largest independent technology companies. Unfortunately, we have very few of those here in Europe. We hope to reach that pedestal. And actually, the plan has been the same for a long time: we are preparing internally for a public listing. This clearly requires a lot of time for a company of our size. But we don't have a pressing need, because we don't have an urgent need for cash today. We are at a point where we have very good investor support, we have hundreds of millions of euros in cash, we are growing very sustainably, so we don't have a clear reason to go public right now.
By the way, Europe's largest technology company, which is also in the world's top 10 or top 15, is still, I think, only SAP. Have you ever looked at how far you are from SAP?
Yes, unfortunately, the sad news is that Europe's largest software company is indeed SAP, which is over 50 years old. But compared to the world's largest technology companies, they are still tiny. SAP's market cap is around 200 billion, and of course, compared to the largest American companies, Microsoft is at three trillion. But I'm thinking... okay, let's move on.
You said you don't have a rush and so on. On the other hand, you've been building this company for quite a while, 10 years, right? You have a whole bunch of employees, investors, and so on. What do you tell them? That Bolt isn't in a rush, you're not in a rush, but well, I don't know, some want to exercise their options, and we just did a show about secondaries recently, right? What is the message to them?
Absolutely, there are both shareholders and employees who want liquidity, and since they have worked hard for years, of course they deserve it. But for that, you don't necessarily have to go public. Looking at the last four months of transactions, European companies alone have raised over two billion euros in funding just for shareholder buyouts, and we also have that option on the table. So we see that this is not directly a reason to go public.
Our last show was with Sienna about secondaries, and they reminded us that Amazon went public about three years after its founding, right? And the reason was clear: they were growing fast, needed money, and there wasn't the kind of capital infrastructure that exists today. They just had to go. It seems to me that you might have the opposite situation: you don't need to, you don't need to, you really don't need to, because those who want to exit, well, someone will always buy those shares, right? If you're cash-flow positive, you might not even need money for growth. So maybe you never need to go public at all. Why are you even preparing for it after all these years?
First, regarding preparation, there are many things we need to do anyway. A company operating in 50 countries, doing several billion in revenue with several thousand employees, we need to get internal controls, accounting, and legal in order. We're doing that work anyway. But rather, I would say it depends on the cost of capital in different environments. And as you mentioned, Amazon did it during a time when stock markets were hot, the dot-com bubble, and they could simply raise money from the stock market much cheaper than they could have from the private market. But today, the situation is actually the opposite. Looking at the stock market, it's quite difficult. In the last two years, almost no IPOs have happened. And at the same time, private markets are very active. As I mentioned, in Europe, several billion euros have been invested in technology companies in the last six months alone.
And Bolt's valuation, correct me if I'm wrong, but I think it has still lost something with the general correction from its peak valuations. I'd guess a billion or two has been shaved off, hasn't it?
Since we are a private company and don't trade on the stock market, it's a matter of speculation. But what's easiest for us to look at is what's happening with our competitors' valuations. Specifically, Uber's price today is more than double what it was two years ago when we raised our last investment round.
So you could say yours is double too. Again, until we go public, it's impossible for me to answer. But it's a story of stories. Look, Tesla's valuation, when people compare Tesla to regular car manufacturers, no one understands where that value comes from, right? Why is it like that? I don't know if the Uber and Bolt stories are comparable. People believe in it, and that value can be placed there. It's not just a question of numbers, Markus, or is it?
It is a question of numbers, but not of past numbers, but of future numbers. In the end, it boils down to how much an investor believes that a specific company can grow in the coming years and how quickly its profitability will improve.
I don't know, let's take the topics in order. We can't invite you to the show without touching on the topic of working in the office, right? Usually, you don't often see Markus Villig on the front page of Delfi, but a couple of weeks ago, there was that letter you wrote to your company, saying let's come back to the office now. It got a lot of media attention. Was it a surprise to you, or was it a blunder, or did you think, 'I'll write a very angry letter and hope it gets put on the front page of Delfi'?
Bolt is Estonia's largest company. So we already assume that whatever big and potentially more controversial thing we say internally will likely reach the media in Estonia, so it wasn't a surprise. However, I actually see this as more of an Estonia-specific issue. Elsewhere in the world, this is already quite normal today. And looking at what most large technology companies have done, they made the move back to the office two years ago. By the way, Google, which was one of the first to start saying you don't have to work from the office and so on, was also one of the first to say, 'No, please, everyone move back to the office.' It went very badly for them too, with employee resistance being very strong in all these large companies. They grumbled and grumbled, but in the end, all sorts of letters and disputes leaked to the media. For a year, people were writing about it. Apple employees were angry, Google employees were angry, Amazon employees were all angry. Everyone said they would never go back, it's impossible, and the leaders are backward and this nonsense went on for quite a long time. I would say it was clearly exaggerated in the media. Looking at the world's 50 largest companies today, nearly 90% are clearly on a hybrid basis, meaning two to three days a week in the office, or even five days a week in the office. And of course, with such a change, there's always a small percentage of people who don't like it and decide to leave because of it, but overall, the majority of people are happy with this arrangement and continue to work at these companies. And well, let's say, I understand this isn't about lecturing, but there is strength in collaboration and in being together.
That's what I wanted to ask Markus. As a successful technology company, shouldn't you be at the forefront of all these changes? If remote work, hybrid work, that's all the future, people are free, young talented people want to be here, want to be there, right? Not tied to one place. All the modern work tools we've heard about, all kinds of team building, collaboration... what started with you? Why are you pushing people back to the office as if you were running some old infrastructure company or a plumbing firm? Why don't you want to embrace this future where we are all free and remote, because technology allows it?
I think almost no technology company leader agrees with that framework, that it would somehow be the future. I think today it's more of a setup offered by very few, individual companies that have managed to do it successfully. And as I said, nearly 90% of the world's largest companies are on hybrid work or office work today, not working only from home. This has become the market norm today: people go to the office on-site because it's simply more effective, interpersonal relationships are better, and in the end, it's every company's choice. If a company wants to be fully remote and only do home office, that's their choice. It's just that we at Bolt believe it's not the most effective way to run a company.
What else has changed at Bolt over the year in terms of your business? Besides becoming more efficient, is there anything groundbreaking and new coming?
This year has been extremely busy for us because, first, we have opened our core business, ride-hailing, in nearly ten new countries. So we have been building this for 11 years now, but there are still many countries and cities in the world to expand into. And second, we have been working on growing new businesses: Bolt Drive, our scooters, food delivery. This year, we opened in 50 new cities. Very rapid geographical expansion continues.
But this is still related to transport, right? That your super app would also allow you to do, I don't know, I'm just guessing, but like a music app or a movie app, since everyone has it on their phone anyway. So you haven't deviated from that mission.
We are very selective about which countries we expand into and which products we expand into. We see no point in trying to do everything poorly. Instead, we choose where there are specific segments where we can offer the world's best service, where there are countries where we can offer something unique, and we only invest in those. Because I see that many companies go too wide with their focus, try to do too many things at a mediocre level, and in the end, it's a waste of resources.
But in terms of choosing countries, you used to hold the line of not going outside the EMEA region, Europe, Middle East, and Africa. Is that still the case, or have you started moving graphically towards where others are ahead?
The focus is still on being the leading provider in all European, African, and Middle Eastern countries. We've been working on that for the last 10 years. However, we see a few individual countries where we have opportunistically expanded in the last two years, where we see, for example, in Latin America or Asia, that competitors are doing a poor job and we have an opportunity to enter the market. For example, in Thailand, we entered just a few years ago and now have about 40% market share. This shows that Bolt actually has the potential to expand practically everywhere in the world.
You have historically had this regulatory issue as one of the things that has held you back a lot, right? There are old taxi licenses somewhere, and I don't know if scooters are allowed on the street or not, and whether a courier is a worker or a machine, and what it is, right? Has there been any change in this area in recent years? Has it started to change, to soften? Do you see where these things are heading in Europe or the world?
In terms of regulation, the situation is actually quite stable, unfortunately. And I mean that in the sense that a large part of European countries made reforms in the last five years. Whether it's the Nordic countries, the Baltics, or most Central European countries, they realized that a new alternative to old taxis had emerged, and they updated their laws, and everyone has benefited greatly from it. Thousands of new drivers have entered the market who are earning money. Prices have gone down, quality has gone up, and actually, thanks to this, the situation in most countries has improved significantly. And fortunately, this is also relatively stable; we don't see major changes there. However, there are still those old, mostly Western European countries like Italy, Spain, or Germany, which haven't changed their laws in 30 years. And that is completely terrible, because we see that in those countries, service prices are high, the service itself is poor, and there's simply no availability because there are 10 times fewer cars on the market than there should be. So today, we are investing a lot of resources in creating public awareness that this regulation needs to change, and we have large policy teams working on convincing politicians to stand up to this taxi lobby and finally update their laws.
Besides this regulation topic, which even goes to the root of it, is there anything else this year where you feel it could have gone faster or where there was a setback? For example, Paris banned scooters and so on, right? Is there anything negative? It's always nice to talk about growth, but is there anything negative?
This year, specifically in the scooter market, we have indeed seen regulations get worse. Unfortunately, several Western European countries have decided against a free market and have instead created very complex public tenders where a few people in the city decide for all consumers which providers are allowed in that city. And this unfortunately always ends in catastrophe. They create very complex conditions, select a couple of providers, and then those providers often don't meet the conditions or go bankrupt, and then a new tender needs to be organized. This is actually quite troublesome for everyone, because imagine as a company, you win a tender, you only get to operate your business for 12 months, then you don't win the tender the next year. You have to pack up all your scooters, close your warehouses, lay off people, and then you have to hope that maybe the year after next you'll win the tender again. And of course, all these costs are ultimately passed on to the end consumer, who then pays a much higher price than they would if there were stable providers in the city.
What is actually behind this regulatory rigidity? We can sit here, the three of us, and say that the Paris city government are complete idiots, right? They don't want a nice green Estonian company operating there. But I'm sure the decision-makers have their own argumentation behind it, right? One thing is that maybe certain people don't like it if the rules were looser. Some of those people might be taxi drivers, maybe not. Some are city residents who say they don't want these scooters here getting in their way. Or if there were 10 times more taxis here in Spain, it would cause a pretty big traffic problem, right? They definitely have some things they're afraid of. Tell us a bit about that, what is the opposing side's argumentation?
Speaking of two sectors separately, with taxis, it's clear that there's a very small group of taxi drivers who are economically opposed to it because they don't want more competitors to enter the market, and because they would then have to lower their prices and improve their service quality due to competition. And that's very natural in the sense that in almost every sector, if a person had a choice between fewer competitors, they would probably choose the easier life. So there's a very clear economic motive there, and actually the rest of society loses out. And this is clearly a place where we need to create awareness among society as a whole that, look, this is clearly bad for you, and you could change the laws so that they serve the wider society, not just a very small group of providers. That's one category. The second category is scooters. And as you brought up the Paris example, they created a Brexit-like situation where politicians themselves didn't dare to take responsibility and make a decision, but instead organized a small referendum where about 1% of all Parisians participated. So a very small minority decided to ban this service. And I think that's a bit of a bad example of how democracy could work. It shouldn't be that a very small minority can ban a much more sustainable and environmentally friendly mode of transport than many others.
But I just wanted to clarify, there aren't that many taxi drivers, right? That it would threaten a mayor or a ruling party's hold on power. The cities are large, there are thousands of them, but we can't say they'd lose a third of their votes right away. Why are they so afraid of them then?
But that's exactly what's so surprising: in Western Europe, politicians are absolutely most afraid of taxis because they are often so visible in the city. They block all the streets, come with multiple cars to protest in front of city hall. And the other side of this is that there are often economic ties behind it. If you start looking at who has donated the most money to local politicians, or if the mayor's brother owns the city's largest taxi company, that's exactly the case in Italy, for example.
That's completely...
Aga tuleme siit selle juurde, et kunagi oli Uber see, kes hakkas tegelema selle regulatsiooniga üldse, oli see nii-öelda teeraja. Kui palju täna need samad suured, Bolt, kas te koos Uberiga teete ka lobi või koordineerite kuidagi seda lobi või on ikka igaüks oma boksiringis?
Kogu sektoril tegelikult on tihtipeale ühised huvid. Meil ongi Euroopa Liidu tasemel tekkinud selline taksotellimise rakenduste ja transpordirakenduste ühine kodu, kus me käimegi siis ühiste jutupunktidega nii Euroopa Liidu tasemel kui ka riikide tasemel rääkimas, milline regulatsioon võiks olla. Ja siis tihtipeale meie vastasleeris istuvadki siis vanakooli taksofirmad, kes üritavad kõike pidurdada ja vaadata, et neid seadusi jumala eest ei uuendataks.
Euroopa Liidus oli teil ka regulatsiooniga väljakutse just, et Eesti proovis siis nii-öelda Bolti ees seista ja vist ei läinud päris nii nagu te tahtsite.
Meil oli Euroopa Liidus viimase aasta jooksul väga mitmed erinevad seadused, mis olid arutelul. Sa ilmselt viitad siin sellele, et kuidas kehtestatakse täpselt siis tööõigused juhtidele ja kulleritele. See konkreetne kaasus läks lõpuks platvormidele ja ma arvan lõpuks ka kullerite ja juhtide seisukohast palju paremini, kui ta lõpuks läks, sest sisuliselt tekkis seadus, mis ei ütle mitte midagi. Raisati kõvasti aega ja kokkuvõttes seadus Euroopa Liidu tasemel ütleb seda, et iga liikmesriik ise otsustab. Ehk siis kokkuvõttes Euroopa Liidu tasemel mitte mingit otsest juhist ei tulnud, vaid jätkub status quo, kus iga riik peab ise otsustama, kuidas ta neid tööseadusi edaspidi reguleerib.
Mis sinu seisukoht ikkagi kokkuvõttes on, et kui sa vaatad seda just kasvõi selle sama juhivaateni, et kumb variant on siis parem? Kas see, et juht on iseseisev ettevõte või see, et ta on platvormi töötaja?
