Bolt - Online Checkout Experience
Bolt offers streamlined online checkout experiences via its platform to retailers who seek to retain more of their customers.
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Founded in 2014, Bolt offers online checkout technology to retailers. It streamlines online shopping and payment methods, which are otherwise fragmented, into a seamless experience. This enables people to have more options when shopping online. Bolt now has millions of shoppers and top brands within its network.
Bolt strives to help merchants of all sizes sell more, grow faster and be more competitive against giants like Amazon. It takes on the checkout-related challenges of a retailer, and also provides solutions such as superior fraud detection services.
Bolt is headquartered in San Francisco, California with offices in Salt Lake City, Toronto, and New York City. It has managed to raise a total of $963.1M via 11 funding rounds. Bolt was last valued at $11B and has experienced 2 more funding rounds since.
Business Overview and Products
Customers often abandon their shopping carts because the lengthy checkout process requires them to log in and add their information when they order from a company for the first time. As a solution, Bolt’s software lets shoppers buy across different online sellers’ sites without being prompted to log in every time they want to make a purchase. This is called the one-click checkout and it solves an essential problem for e-commerce firms.
Bolt’s core offerings include the Bolt Network, which connects retailers with shoppers. Other offerings include the One-Click Checkout. Here, shoppers save their basic information during their first purchase within the network, so they never have to enter personal or payment data againing the core offering. Bolt Commerce is another service where valuable first-party data and unique shopper insights can be leveraged to turn one-time shoppers into life-long customers. Bolt Payments makes collecting payments very easy. Lastly, Fraud Protection protects retailers from many things including fraudulent chargebacks and false positives.
Bolt CheckoutOS is the engine that powers identity accounts, one-click checkout, fraud prevention and payments for the Bolt Network. It enables retailers to create a tailored, localized buying experience for their customers and maintain a connection to them. This system results in many positive changes such as decreased number of abandoned carts, higher checkout conversions, and a way to build lifetime relationships with customers worldwide.
How It Works
Joining the Bolt Network means a retailer can offer shoppers a one-click checkout with no passwords, forms or payment details even if they have not visited the site before. Other issues that Bolt takes care of include the complicated technological challenges involved in the checkout, fraud detection and digital wallets.
From the first moment retailers go live with Bolt, they can offer their shoppers a one-click checkout experience with a 63% higher conversion rate than guest checkout. More than 90% of Bolt retailers have benefitted from this network effect by serving customers that have already made purchases with Bolt at another retailer. The rate of cross-retailer activity is growing rapidly, up 25x since the beginning of the year.
For each user, Bolt creates a persistent shopper identity across all retailers in the Bolt Network. Shoppers receive a unified checkout experience, and retailers can treat the millions of in-network shoppers like returning customers.
Bolt solves 3 challenges for a retailer:
Integration: Retailers can outsource the checkout stack to Bolt along with all of the related integrations, and therefore merchants and platforms save considerable resources.
Conversion: Retailers can leverage Bolt’s highly optimized frontend, which consistently outperforms the retailers’ existing checkout.
Fraud: Bolt mitigates risk for retailers by using behavioral data collected throughout the checkout experience to inform our fraud decisioning. This is done by collecting 4x the real-time data signals, understanding the shopper to maximize order approval and conversion, and personalizing outdated checkout forms that require unnecessary fields to validate a shopper.
Business Model and Pricing
Bolt uses a hybrid payments-and-software model. The company makes money off of payments, along with charging for the other services like fraud protection that it offers. It charges these services on a SaaS basis.
When customers shop with retailers that have partnered with Bolt, their addresses and credit card information are saved. This allows them to place subsequent orders with Bolt-powered retailers without having to put in their personal information again.
Bolt then charges retailers when customers, who have already saved their information with Bolt, make new purchases. To be specific, Bolt makes money by charging merchants a 2% fee on purchases made through it.
Bolt has overall achieved tremendous growth in the past, especially in 2020. That year, Bolt processed over $1B in retail transactions and experienced a 10x increase in the size of its Bolt One Click shopper network. It was adding more than 250,000 shoppers every month. Bolt also experienced a 3.5x higher GMV since 2019 (which had an implied $286M GMV). The company had predicted a 3x higher GMV in 2021, translating to roughly $3B.
Furthermore, according to a 2020 report, Bolt had achieved the following milestones:
4.5 million Bolt Account shopper network
2.2 million shoppers added just in the past 6 months
50 million more shoppers lined up through the reach of all ABG brands
As of July 2021, Bolt had gathered 6M registered users and was expecting 50M people to be using its one-click checkout service by 2022. More than 300 merchants now use the service and Bolt caters to online retailers that make $10M to more than $100M in annual sales. Founder Ryan Breslow wrote on his blog,” Bolt expects 11% of US shoppers to be a part of its network by the end of 2021. By the end of 2022, it expects one-third of all US shoppers to be on its platform, and by the end of 2024, that share will grow to two-thirds. By 2025, Bolt is projected to interact with eight out of every ten shoppers in the United States.”
Another source reveals that by October 2021, Bolt had partnered with hundreds of retailers and gathered 10M registered users.
Ryan Breslow: Co-founder and CEO at Bolt. Previously, Ryan has co-founded the Beam currency and Eco, a crypto digital wallet startup. He also started the original Stanford Bitcoin Group and is a former Co-Founder and CEO at Sites by Hand.
Eric Feldman: Co-founder at Bolt. Feldman has also co-founded Eco with Breslow. He was a creator of various startups from 2007 to 2011, with a focus in education, enterprise software and microlending.
History and Evolution
Founder Ryan had a lot of experience with online checkout systems prior to the founding of Bolt. In high school, he started to build ecommerce websites for businesses of all sizes. These were great learning experiences for him as this is where he began discovering the shortcomings of online commerce space which would eventually lead him to establishing Bolt.
In 2014, Bolt was founded with a vision to set a new standard for ecommerce. It started with a small team of 10 people that worked tirelessly for 2 years to create the first version of Bolt’s checkout solution. Bolt then officially launched its first merchant with just the payment step in mid-2016.
From 2016 to 2020, the company’s product and team grew exponentially. $215M were raised in funding and the team grew by over 200 members. About 250+ retailers had come onboard.
In July 2021, Bolt led a Series D funding round which resulted in a valuation of $4B. According to some sources, this valuation was nearly 5 times the valuation Bolt had in December 2020. The company intended to use the funds to accelerate its product innovation, which would include tools that enable shoppers to checkout on any page. Bolt also planned on expanding to more customers nationally and internationally.
In January 2022, Bolt reached a valuation of $11B after a $355M funding round. According to a blog post by Founder Ryan, Bolt’s general hyper-growth can be attributed to a simple way it differentiates itself from its competitors’ offerings such as Amazon and Shopify’s one-click checkout. While these companies have an extensive reach, it is limited to their platforms. Bolt on the other hand offers flexibility and control to other retailers that don't have access to good insights on their customers. This solves a key problem for both customers and retailers. Customers prefer having a single identity through which they can shop anywhere, while retailers get to offer their customers consistent shopping experiences.
Bolt’s initial business model revolved around digital currency in online checkouts, but after around 12 months of experimenting, Ryan and Eric decided to shift focus to the ecommerce model.
Bolt claims its checkout page is up to 10 times faster than that of its competitors due to a special preprocessing technique. Here, the customers are not required to enter a billing address and it adopts a post-checkout (as opposed to pre-checkout) registration model.
To reduce fraud, Bolt’s machine learning algorithms analyze over 200 variables on each transaction, and a vigilant team reviews every declined transaction. Any flagged customers can provide additional information to get their orders approved.
After its October 2021 funding round, Bolt reached a $4B valuation which was 18 times its valuation in 18 months.
Ecommerce firms in the market commonly face one similar problem - customers abandoning their shopping carts due to lengthy checkout procedures.
A December 2020 article highlights how the checkout space is a hotspot for growth in the market right now. A lot of cash is being injected into the market just to solve the customer pain point of lengthy checkout processes, resulting in several companies like Bolt raising funding rounds one after another. For example, competitor Fast had raised $20M while Checkout.com, an English competitor, raised $150M in 2020.
By July 2021, financial technology startups had raised over $23B in funding rounds in the US alone. Bolt’s close competitor Fast had raised $100M in January 2021.
Next Suggested Reads
Bolt raises $68 million to simplify ecommerce (Venture Beat, July ‘19)
Bolt adds $75M to its Series C, as the battle to rule online checkout continues (TechCrunch, December ‘20)
Online checkout firm Bolt valued at $11 bln after funding round - source (Reuters, January ‘22)