Ashesh Shah, founder and CEO of The London Fund, is as bullish on Bolt as you can imagine. The London Fund, a UK venture firm with “over $1 billion in cash and assets” under management, is leading a $450 million round for Bolt, a one-click checkout startup that has been embroiled in controversy for years.
But Shah is undeterred by all of this. She describes the terms of the Bolt as “a fantastic deal for a company that I still believe has a lot more room to grow.”
I spoke with Shawa on Wednesday afternoon about the deal and the frowning terms. The interview has been edited for clarity and brevity.
TC: What can you tell us about this proposed deal?
SH: The London Fund has been around since 2003. We are always looking for Ferraris with flat tires. Sometimes people don't understand why. Maybe the color doesn't match, or maybe it's something the market doesn't know about. We are very technical. I've started a lot of startups and have been through a lot of this. And we finally saw something very special here. Bolt has an incredible impact. If you look at the number of wallets and people using the system, how it works, and compare it to Shopify or other big players, they are on par. I think it's a hidden gem.
As you look at the capabilities over time, when you launch a super app, you have the ability to interact with wallet owners. When you start looking at Shopify or Bolt, you realize that the user base is huge and there is a huge opportunity.
Obviously this is a TOS. It's not final yet. There's a lot that needs to happen for paid play/cramdown to work. What are the chances of this getting approved?
I hope this leads to a conclusion. We've been working very hard on this. We've been thinking about it and working and tracking it for six months. We believe that what we bring as a company and what Bolt has can lead to amazing new activities. I think there's a lot of value for all shareholders. I think a lot of people are completely misunderstanding that. We just want to show our existing shareholders that we're committed to the future of this journey. Right? We're not saying negative things, we're saying that if I'm putting my skin in the game, I want other people to be there. And if all goes well, hopefully this deal will close very well, we're open for other people to come in with capital. We're just leading this. There's plenty of room.
As part of the proposed transaction, your company will invest $250 million. What are some examples of marketing services you will provide as part of the $250 million investment in lieu of cash?
We provide tactical capital. We want to make sure that what we distribute has a very real impact on the companies that we serve. When it comes to marketing credit, you can decide what that looks like. Essentially, it should be the same as cash… We believe that over time, many of the kinds of resources that money provides don't need to go through the middleman of cash.
One of our funds actually has influencers and media as LPs. So we're providing visibility, like Warner Bros. is providing television time, but we're just influencers and people who can talk about their services or products or things like that. So if you look at Bolt, they're spending a lot of money on co-marketing dollars. They're already spending about $80 million on marketing and they're using that for co-marketing. So we can provide them with the co-marketing dollars they need and the co-marketing impressions that their brand needs.
Think of it as a barter like OpenAI did with Microsoft. $10 billion. That's what Azure calculated. They just said it was a $10 billion investment. But the reality is that it's also how Microsoft manages and monitors performance.
We want perfect alignment between LP and company. I don't charge 2% commission. So the other important thing is that we are very aligned with our investments. We only do well when there is an exit, which is a big deal.
On our side, we fundamentally believe that if we go into companies that have core assets, like wallets, transactions, users, etc., we can achieve really great results.
What do you think about Ryan Breslow returning as CEO?
I think that's important. He came up with it. He had the insight to figure out how to create a system that would allow him to reach multiple different retailers in a way that would benefit the consumer as well. That's not easy at all. Compare it to Revolut or Shopify. Look at the speed at which he's been able to grow. I think there's a way for this business to continue to grow. I think there has to be a vision behind it. There's a few more steps to it. Ryan has that vision.
But are you sure this will be approved?
We hope this goes through and I think all the shareholders who have already attended should seriously consider this as a good way forward and one that can deliver much higher returns.
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