Voi Technology has quickly become a leader in the growing micromobility sector. They have apparently been considering purchasing Bolt’s scooter and bike, according to this report. This possible turn comes on the heels of Bolt’s largely uncharacteristically profitable quarter. The European mobility super-app ecosystem produced about $2 billion in revenue for 2023. Yet the company was staring down the barrel of a $108 million operating loss over that same period.
CEO of Bolt, Frederik Hjelm, emphasized the importance of diversifying as evidenced by the company’s recent announcement of a scooter and delivery program. He admitted the micromobility sector in particular still poses huge obstacles. The financial pictures of Bolt’s micromobility business are still a closely guarded secret. This lack of transparency undermines its profitability to the extent that Bolt’s operations as a whole are profitable.
“Micromobility is very difficult, and it has the hardware aspect, but no network effect like how food delivery and ride-hailing [can lead to] grocery delivery,” Hjelm remarked. To stay relevant, he stated Bolt must be the best at every business vertical including taxis, transit, food delivery, etc.
Voi has had a successful run lately, marking its first profitable year with an adjusted EBITDA of $17.9 million. This operation is a huge win for Voi as the company attempts to widen its base in the micromobility landscape with acquisitions that have made waves in recent months. Rival Bird, a player in the shared micromobility space, announced it would achieve as high as $19 million adjusted EBITDA profitability in 2024. This milestone accomplishment only heightens the rivalry.
The news of Voi’s interest in Bolt’s micromobility assets couldn’t arrive at a more critical juncture for both companies. While Voi is acquiring capabilities to deepen its service offerings, Bolt is treading through difficulties around operational efficiencies and its market positioning. Hjelm acknowledged that “Bolt is a great company, but they are mainly a [ride-hailing] company,” suggesting a focus on core competencies may be essential for both firms.
As industry analyst Michael Washinushi recently pointed out, Bolt deploys “price as a loss leader” to lure riders away. This strategy may be the most damaging to the company’s long-term viability. He further elaborated on the operational strategy necessary for success in micromobility: “You can dump thousands of vehicles and hope people get rides, or you can… place half those vehicles at the right place and right time to optimize the rides and optimize the price.”
The latter explains why Voi is so keen on buying Bolt’s micromobility bolt-on. This acquisition fits squarely into its portfolio expansion strategy to fortify its market presence. If successful, the deal would do wonders to improve Voi’s resume. It would allow Bolt to double down on their core ride-hailing services, lean into that competition and take their financial medicine.
