TMT is Bolt upright!

The Bolt IPO draws closer

IPO drives the bulls to Bolt?

Dear reader

Bolt.eu

Bloomberg reports that Bolt Technology OU has secured a €220 million ($235 million) credit facility that the Estonian mobility company says will help it prepare for a public offering.

In a statement, Markus Villig, the startup’s chief executive officer, said the financing “provides us with additional flexibility as we work towards being IPO-ready.”

Bolt offers ride-hailing, food delivery and scooter rentals — categories where growth has slowed in recent years. The startup operates in more than 45 countries, primarily in Europe and Africa, and competes with Uber Technologies Inc a $145bn market cap.

In 2022, Bolt earned a €7.4 billion ($8.4bn) valuation after raising €628 million from Sequoia Capital, Fidelity Management and other investors. Last year, the startup received €126 million to expand its rental car fleet. Bolt reported net losses of just €72 million on €1.26 billion in revenue in 2022, where revenue grew 152% year on year (and a 126% growth between 2020 and 2021). In terms of cities served in 2023 the number has grown by 25% suggesting growth remains strong. On a Price to Sales basis Uber is 4X $37bn revenue to $145bn mar cap. Even if Bolt’s growth has fallen to a third of its 2022 growth, then Bolt is comparable to Uber on a price to sales basis (admittedly Uber is far larger). We do know Bolt business grew 70% in 2023 but not the growth of the who business.

Drawing other comparisons, interestingly, Bolt say they have 150m customers and Uber say they have 150m ACTIVE customers, while Bolt has 3m drivers and Uber 6m ACTIVE drivers/couriers. We do not know how many active customers or active drivers there are at Bolt to provide a direct comparison, but one supposes that the scale of Bolt compared to that of Uber and comparing Uber’s market capitalisation to the fundraising round valuation of Bolt means Uber is 17.2X more valuable than Bolt ($145bn vs $8.4bn).

Last July, Bolt recruited a new chief financial officer from UK fintech Revolut Ltd., and said it planned to reach profitability over the next year. Many doubts hung over Uber and its ability to turn a profit. It proved able to achieve profitability in 2023.

Citigroup Inc. was the coordinated bookrunner in the latest financing. The facility, initially met with robust demand, was substantially upsized during syndication and ultimately oversubscribed, underscoring the confidence of financial institutions in Bolt’s trajectory and financial strength.

Provided by a consortium of core relationship banks, including Barclays, BNP Paribas, Citi, Deutsche Bank, Goldman Sachs, JPMorgan, LHV Pank, and Luminor, this landmark financing bolsters Bolt’s already robust cash position and fortifies its liquidity profile, positioning the company for sustained growth and strategic initiatives.

Markus Villig, Founder & CEO of Bolt, said: “Our inaugural revolving credit facility represents a significant milestone for Bolt, affirming our company’s resilience, financial maturity, and promising future. We have secured highly favourable terms reflective of our solid financial footing, underscoring the confidence our banking partners place in our vision. This financing provides us with additional flexibility as we advance towards our goal of being IPO-ready.”

The €220 million facility, which remains currently undrawn, aligns with Bolt’s approach to liquidity management and is intended for general corporate purposes, enabling the company to pursue its strategic objectives with confidence and agility.

Citi acted as Coordinating Bookrunner and Mandated Lead Arranger for the transaction, while White & Case served as legal advisor to Bolt, and Clifford Chance acted as legal advisor to the lenders. Wilmington Trust assumes the crucial roles of Facility and Security agent, further enhancing the operational efficacy of the financing arrangement.

The successful execution of this syndicated revolving credit facility underscores Bolt’s position as a leader in the shared mobility sector and exemplifies the confidence of financial institutions in the company’s strategic direction and growth prospects.

Discount on a discount

TMT values its 1.26% holding of Bolt at $72.2m, which puts Bolt on a $5.73bn valuation. This is a 31.7% discount to the last funding round which was $8.4bn.

If you agree the apparent comparisons of activity levels between Uber and Bolt, suggest that Bolt should not be valued 17.2X lower than Uber, then the discount is wider than 31.7%

But the discounts don’t stop there. I topped up today at $3.50 after the pullback from recent near $4 prices. There is a 46% discount to last official NAV. So buying TMT lets you “buy” Bolt for the equivalent of $3.1bn. This is 47X cheaper than buying Uber at $145bn.

But there’s another way to consider Uber (and Lyft) versus Bolt. Is it fair that Bolt has made as much progress as these two since 31/12/2022? We know TMT marked its holding of Bolt down in FY2022 due to falls in the share price of Uber and Lyft back then. Since that date Uber is up 62% and Lyft is up 81% (as of 3rd May 2024). If we blended that increase we would arrive at a $50m uplift in “fair value” (on a mark-to-market basis). That would raise TMT’s Bolt holding to a $120m valuation which puts Bolt on a $9.5bn valuation rather than a $8.4bn.

Nasdaq listed Backblaze is currently $9.30 a share. But it’s held on TMT’s books at half its publicly traded price so an uplift of $15m there also.

Finally there’s cash of $6.6m which has grown to a reported $11m post period (as of March’s Trading Update). If we consider stripping cash out of the market cap and the NAV at their fair value, that jumps the discount to NAV from 46% to 61%. That’s equivalent to valuing Bolt at $2.2bn. (instead of $8.4bn)

But if you sold Bolt at its mark-to-market price and Backblaze at its public price plus stripped the cash out then you are buying TMT at 134% discount - plus have 43 other holdings worth $123m (at book value).

But many of the 43 other holdings are thriving too - like OneNotary

Ukrainian business OneNotary is thriving

OneNotary offers online notary services to enterprises. The platform enables members to notarise any document permitted by the state for online notarisation. Members can schedule the appointment with a notary using the platform and can notarize the document when the notary confirms the identification and attaches a digital notarisation seal or a notarisation certificate.

In March 2024 they announced a Series 1B fundraise for $5m supported by investors including Docusign.

Since its founding in 2020, OneNotary has grown rapidly and is now used by many notaries. Over the past year, the company has doubled its subscription revenue and its marketplace of notaries across the country has grown to over 30,000.

DocuSign and OneNotary have also entered into a formal partnership to integrate OneNotary into DocuSign’s range of notary solutions. The integration, when launched early this summer, will expand DocuSign Notary into third-party notaries, providing more opportunity for multi-state certified notary platform options for DocuSign customers.

TMT owned around 1/3 of OneNotary held at $500,000. The $5m raise in March means a valuation uplift of about 50% on a revised valuation.

Will docusign buy it out? Seems logical to think it will happen at some point.

11 others increased during 2023 H2, some by quite an increase.

Conclusion:

The news of an oversubscribed $235m facility announced on Bloomberg this morning ahead of its IPO, brings realising the value in Bolt closer as they work towards a listing.

When will the Bulls bolt forwards? I’m surprised there is such a muted reaction but I’ve positioned in readiness.

Regards

The Oak Bloke

Disclaimers:

This is not advice

Micro cap and Nano cap holdings might have a higher risk and higher volatility than companies that are traditionally defined as "blue chip".