Markus Villig, Founder @Bolt: The Most Insane Story in Startups & The Future of Self-Driving| E1225

we tried to raise every way we could I met all the VCS around Europe I could get my hands on no matter how many of these meetings I took and it was dozens maybe even hundred they all told us no we probably got to the point of doing about 25 million ARR growing multiple 100% a year still no VC wanted to invest we went from zero to 2 million AR in about 18 months and then from there we went to about 10 million AR in the next 18 months and then we went from that to

100 million ARR in less than 2 years and then we went from that to now we have 2 billion ARR in sort of the next few years so it was extremely rapid exponential growth throughout this whole business ready to [Music] go Marcus dude I am so excited for this thank you so much for joining me today excited to finally be on the show dude this is so good to make happen now I hear that the start was a 19yearold old student in Estonia uh who obviously didn't have a driver's license I don't either to this

day so I'm thrilled about this but can you take me to the specific moment that you had the [ __ ] I need to found bolt actually the story started when I was 10 years old so I knew already by that moment that I'm going to be a tech entrepreneur for life I realized that I'm really great at technology I really cared about software I was always looking at all the latest gadgets uh and I realized I really like Commerce I liked working with people figuring out how to make money so I in kindergarten I

was you know selling Legos then in school times I was selling some Collectibles then I learned to code started building websites for local companies so already as a teenager it was clear that this is going to be my passion for the next couple of decades what did your parents say uh they said go for it h and the reason for it was very simple because they grew up in in the Soviet Union so I mean we we grew up under the Russian occupation in Estonia uh and at the time entrepreneurship was banned so they couldn't

pursue their ambition they couldn't build a business so when I was growing up in the '90s finally in in sort of a free democra Democratic country of Estonia like they really told me that go for it like challenge whatever things you want to do in the world go for it so I I really grew up in that environment okay so we have this kind of entrepreneurial streak from very early and then we are 19 as a student and don't have a license where does the bolt idea come from Once I had learned how to code

and I was building these websites and making money on the side I always know that that's not going to be my long-term um I I wanted to start a startup so I first experimented around with a bunch of different ideas I first built mobile app for our School's online educational system that didn't go too far because I realized very quickly the schools don't have a lot of money uh and the sales Cycles are horribly long and it's public sector so after six months I gave up on that idea what it takes 10 years for a

VC to learn in adtech you just learned very quickly exactly uh and then uh I took a very systematic approach so um I spent a couple of months uh sted in different Industries and I just more and more over time started to realize that transportation is the most exciting space for me in the world and there was a number of factors for it so first it was very clear that we're going through this once in a generation shift so people will not be needing to own assets but they can start to use assets on demand

similar to what had happened to music to videos um increasingly to many many other sectors it was clear that's going to happen in transport second uh electric cars were coming along and that was just this big revolution that I thought is going to shake up the industry and third it was clear that you will also have Micro Mobility so you will go from building these large um combustion engine cars to having electric motorbikes uh electric Cycles electric scooters uh and I thought there's another opportunity there and then fourth there was the shift to from you

driving your car to potentially self-driving happening so I was just amazed like wow okay transportation is really going to go through this massive shift I need to be in that industry it doesn't even matter what I'm going to do but that's the place to be okay so you have this realization what do you do next the majority of people fail I always think because they don't take the first step what do you do post I want to innovate in transportation in this shared new economy of not earing assets what's the next step so I started

then as a 19-year-old kid uh by literally Googling how do you start the startup so I went to this Y combinator and other websites there was great content out there uh and the top one advice was always that you got to validate your interest of customers and the suppliers before you build the first line of code so I did that I I uh set up this survey uh on social media uh in Google forms uh sent it to my school list put it up everywhere I could and hundreds of people replied and they all said

that yeah they agree the taxi industry in in talian at the time was horrible and it was so horrible that if you were to design a bad experience that's what you would essentially design so I can walk you through what how it was so you uh had 15 different companies you had to call all of them uh most of the time they didn't even pick up then even if they did pick up the car almost never actually made it to to even if it did made it to then the car was in a horrible shape

it was dirty the the driver was rude you could forget about paying in with a card you always had to pay in cash so it was just all around a really bad experience and I was thinking that there must be a better way to um uh to organize this and so did hundreds of other people so I was thinking after this survey wow this is great this is the easiest startup ever everybody's so excited and waiting for me to launch I haven't even built anything and then the trouble started so then I had to go

and validate the side so then after school for multiple months every day I went to these taxi stands that you have all around the world so you go there as a kid you open up the door get in start pitching the driver we have this new app you should sign up you're going to be making extra money and the sales went really well 90% of them immediately said get out of my car I don't want to deal with you who are you some random teenager you know I want to watch my news and whatever uh

so that was very frustrating but I kept on doing that for months and months I think most people would have given up and they did it until I had about 50 drivers who I had finally persuaded to give me their contacts did the message change to make it successful with those 50 or do was it just persistence I think that uh I was sort of optimizing the wording a bit as you would in sort of face to- face sales because over time I saw what what was getting me the better conversion but at the end

of the day the pitch was simple uh you're currently stuck under this Legacy taxi company that doesn't give you a lot of work that's why you're sitting here in this taxi stand uh you should sign up to this app it's low risk you're just going to be paying a small commission every time you get a trip so it should be a no-brainer and even then most of the drivers didn't want to sign up so it was a big uphill climb to make it happen so then we had 50 what did we do then so once

I had validated the consumer interest and I had got the first drivers on board I started building the up so I was back then 19 uh everybody else uh in my high school was starting for exams but um I had gotten lucky I had completed one of these um National computer science olympiads so I had got to a good grade there and had given me a free pass to University so that gave me a free pass effective I was like I don't care about the exams I'm going to get into uni anyway so that gives

me six months to work on this product uh so they spent the all the other time I had aside from being in the taxi stands by actually coding so I was building the consumer app the driver app trying to build a back end and I realized very quickly that this is going fine but I'm not that capable of program that I can build all of these systems as quickly as I need so then I went to my older brother who was uh 15 years older and had a great career in Tech and then used to

be one of the early employees at Skype back in 2004 so he had a great network of Engineers so I went to him and I was like we need to get some engineer on board to help him with this I need a co-founder and uh I think we talked to it must have been at least 30 people and every single one of them turned me down because why would you join it's a 19-year-old kid they have no experience no money was Uber known at the time was absolutely not so back then there were a limousine

company in the US so I was thinking that yeah these guys have raised good money but like I don't think I'm ever going to compete with them which is going to be a a story the model wasn't validated for anyone going absolutely not so so back then it was nobody had even heard of these apps at least our part of the world everybody was just using the phone dispatcher to get a ride so you have 30 conversations none of them join exactly so it was it was a very tough time recruiting this co-founder and then

we got more and more desperate so we we started publishing this on random forums in Estonia uh whether it was programming forums or random job sites and then one day I get this email uh from a from a candidate who writes to me that let's meet up and I want to hear more and I mean I didn't have any other candidat anyway so I was like sure let's let's meet and I quickly Google before I go there how do you interview a person uh being a 19-year old kid i' never hired anyone so I show

up to this meeting I pitch him for probably an hour about what I were trying to do and why this is exciting and then the problem is that most software Engineers are are pretty sort of introverted people like they don't really show you on the meeting whether they're excited or or not and I can tell you that Estonian software Engineers are even worse than that so I had no clue at the end of the meeting whether this guy is excited or not so I go out and underweiser and then a few days later he he

writes to me again that let's meet up and then this magical moment happens I I get into this Cafe with him he pulls out the phone he pulls out another phone and this guy just in a couple of days at home built the rider application driver application all the back end just makes an order on the spot and he's like hey I got so excited about the idea that I just went home and built this uh to prove you that that I'm a capable guy so I just said on spot wow you're hired I've been

working on this for months and this guy did it all in a couple of days so um that was Oliver who turned out to be our technical co-founder who still with a company 11 years later is the most brilliant software engineer I've ever worked with and really I just found him from a random forum and he just showed up built the thing as basically a test assignment how much of success in business is Lu versus skill respectfully it's quite lucky that that happened it's it's amazing I think that uh in our case uh without Oliver

the company would have never be where it is so I'd say it's even close to 100% of luck what would you say is the biggest advice for Founders looking to find another co-founder I'd say from from that um story is that you can never give up and even if the first 30 people don't work out just keep on going and you can uh really try to find people from all sorts of channels you don't need to only go through your Networks sometimes these random forums actually turn out amazing candidates so just keep on doing it

I I didn't know that story I love that and so we have alliv then and we start building out the back end the front end product is now starting to hum talk to me about going live when did we go live and how did that response go tricky bit is that marketplaces are probably the toughest businesses to get going so if you build a B2B sa application for example you can fully control the consumer experience uh that's not the case with marketplaces because you need to overcome this chicken and egg problem you need the drivers

and you need the customers at the same time and both of them are very impatient so if a driver signs up they expect to get trips at most in a couple of hours otherwise they're not going to bother keeping the app online especially back then when data was more expensive as well and then on the consumer side it's even worse because if they open the up they need to get ride in a couple of minutes if you don't have a car nearby in that area they're just going to move on so it's a very tricky

Marketplace especially in right handing to get it off the ground there's many Marketplace that are far easier so for example you contrast this to Airbnb Like A supplier might sign up it's completely fine they don't get any bookings for a few days they can wait but that's not the case with a driver so um now how how did we overcome that was very tricky so first of all we didn't have any budget because um you had raised any money yeah so so back then I was a 19-year-old kid with no budget and uh the only

thing I was able to do was I went to my parents um and I was like hey we really need some budget to get this thing off the ground and uh we came from very modest means and the especially back then wasn't a rich country so they said yeah we put aside 5,000 bucks for your University fund and um we're fine to give it to you we trust you but if you spend all this money on this project you got to cover your own rent for the next few years at Uni so I thought about

it for a couple of seconds and I was okay let's do it give me the cash and that was the initial funding we used to get the company off the ground so we spent a bit of that on product development uh we spent it to uh get the first sort of stickers and some of the Billboards and business cards ordered and and it was a very humble beginning of just trying to hack in every different free organic manner we could to get the first initial traffic to the platform okay so then we launch and it's

difficult you're managing demand Supply how does that go so the OD thing about this business from for us for day one was that it was very asymmetric so the consumer side was from day one actually very strong so we got the ton of free media um it was a great story everybody hated the taxi industry there was this young kid who tried to fix it so we got hundreds of ini signups coming into the app and that was great but the problem was almost every single one of them got a really bad experience because we

barely had any drivers online so they open the app the cars similarly didn't show up or the experience wasn't great and um I got really into a panic mode because I was thinking that we can't just waste this first initial burst of demand that came in because if all these people get a bad experience we're going to get a bad rep and we're never going to be getting out of this this problem so I I did everything I could so I went on the streets of Talon signing up taxi ders was one by one again

this time at least I had an app so I could sign them up on the spot and that turned out to be a very effective sales tactic what I recommend to more Founders noway which is that uh you just I just got in the car and then I just wouldn't go out of the car before the driver had signed up so I just was like Hey like give me your details I'll just do the account for you download the app set it up and I was like okay give me five minutes I'll set it up

for you and just every time you come online click this button and the app is going to open up so I did this really currated uh sort of service to get every single driver online and then I realized that that wasn't even enough so I went to my older brother martin who worked at a different tech company at the time and I was like hey can you help me with this as well and then I went to my mom and I was like hey can you help me with this as well because like we need

even more people on board uh so it was a very humble beginning of just using everybody I knew to to sort of try to help and sell me these drivers to get them started are you making money at this point like on the first day I'm just fascinated how many people took a ride so I think that we started off by doing about five trips on the first day uh and then it it started very very uh gradually growing from there so it took us a couple of months before we got to 100 trips a

day and then very quickly went from that to 200 500 1,000 trips a day and then it was already obvious that this thing is taken off it's going to become sustainable and we could start to hire the first employees when was it most obvious to you that you had like the hail product Market fit actually the old thing was that we saw this massive consumer demand from day one so it was very clear that consumers really want this service so that was never the question for us the hard part from us from 11 years ago

until today has always been the supply side so our Mantra every single time we have our internal All Hands meetings for 11 years it always ends with one slide which is ADD Supply so that's always been the biggest blocker for us how do you get more drivers on board nowadays we can expand that to how do you get more cers on board more restaurants on board that's always been the biggest Focus for us when you look back at those very early days what did you do that you wish you hadn't done I think I uh

I should have been more aggressive with initial fundraising I think we could have sped ourselves up a couple of months if I had uh gotten out and raised a small Angel check uh before I did because we we bootstrapped the company completely for about the first year so we built the product we got to some thousands of daily trips uh and we did all of that with 5,000 bucks for my parents so I think we actually could have accelerated a bit if we had gone and raised a small Angel ticket before respectfully why are these

businesses so capital inefficient when you look at your your Ubers or your un name it they are so Capital inefficient and the cost it is to manage and run them is extraordinary how are you able to do a first year thousands of trips with $5,000 and everyone else takes $15 million in a seed round so uh still to this day we're the only company in this whole industry that's achieved that so there's been dozens of these companies that by now have raised billions of dollars um and I think it comes down to a few things

first of all I think it was the internal culture of the people who were part of that initial team so me Oliver Martin my brother the first employees uh we just came from this really Frugal and resourceful mindset where the only thing we're thinking of is how do we get this business to profitability without raising any money how do we keep our costs as low as possible and that's a completely different mentality than how all of these other businesses were built so specifically you look at some of us competitors who raised $30 billion I mean

these companies obviously started off with having so much excess cash that they got very bloated it was never problem for them that they had to optimize for costs because they could always go out and raise more money and we came from literally the opposite which was we had no money and we had to make everything work with very little where did having no money benefit you and where did having no money hurt you the biggest benefit for us was probably in terms of attracting the right people because we could never pay even very attractive salaries

in terms of cash I think we're always paying sort of mid Market or low but what we did to compensate for that was that we uh gave people generous Equity so we tried to attract people who were really missionaries not mercenaries and that really worked out nicely and the other big benefit was that it really uh defined the company culture so the first couple dozen people who joined we went through this brutal period the first couple of years where we couldn't raise any money while our competitors were raising literally billions of dollars and that just

forc us to be so effective at how we spent every single Euro we had this huge analytical Dash dashboards of measuring Roi measuring every single thing we do uh and that just cascaded now down into what the compan is today but if we didn't have that cash crunch in the beginning I don't think that ruthless sort of frugal culture would have ever formed otherwise why did you raise money when you did so what we realized eventually was that yes we can keep on Bool straing this company forever we we built it to about 10 million

uh annual revenues um without raising any external financing effectively we 10 million annual revenues yeah so we we raised about 1 million of an annual of the first seed fund and then we built the company to 10 million AR with that uh which is unprecedented in most places not to mention in this industry who was the first investor and how did that meeting go you were like at this point 1920 exactly so Googling how to hire someone I don't imagine investing is that much more natural so so I was 20 years old we had this

good traction going on in Estonia and then we wanted to raise the first 1 million seed round to to expand and um I reached out to everybody in in Estonia I could think of and then we raised the first round mainly from some small local VC funds who were just setting up back in the day and some first early Skype employees what was the price I think it was probably a 9 million valuation so we raised a million euros at that moment got you with that round still happened today and what I mean by that

is with the globalization of venture startups content would you just go Global from day one and just go to YC or hopefully through shows like ours come to People Like Us or do you think there are still 19y olds in Talon who would raise from locals because they've never heard of this world I think that for sure there's a huge population of those people who still think that it's easier to raise locally than it is to raise internationally so I I don't think globalization has gotten to that point yet uh whether that is effective is

another matter I do think that it would make more sense for them at least to approach the European VCS and raise a more serious run from the get-go and uh the valuations have massively spiked as well so I think if today we had the same metrics we would probably be raising the round at the 50 million valuation not the 9 million valuation okay so you rais one on nine and then you go for 10 million in Revenue yeah so so then it was a couple of years of grind after that because we raised this 1

million um we then tried to launch 10 countries at the same time 10 at the same time we were absolutely amateurs at what we were trying to do so so we uh we went from um trying to launch Estonia uh to trying to suddenly launch in the Netherlands in the US us in a bunch of other places around the world and we almost bankrupted the company in six months so so we burned from most of that 1 million very rapidly with with nothing to show for it and the lesson for us from that era was

that you really got to take these expansion um cities sequentially and not in parallel so we then uh actually had to make the hard call of letting all those people go shutting down effectively all of those markets and we thought okay let's let's figure out how do we go from one to n so how do we then figure out how do we do lattia or Lithuania or Poland and just take the closest Geographic countries to us and figure them out one by one figure out the launch model and then once we've done that then let's

go and actually raise around and replicate it so we bit did it the other way around we were too optimistic so what did you cut down to so you expand 10 at the same time you go [ __ ] this isn't working cut back what do you cut back to so I think we were left with about 15 employees uh most of whom were then related to the Estonian operation which was the only piece of the business that was actually working well and growing organically so that was a self-funding business and then we had a

couple of people that we could afford to actually work on the international expansion how do you respond to people who say well when you expand in New Markets there'll always be loss making markets and you have to subsidize the loss making markets with the profitable Estonian markets and that's the nature of the Beast the maturation of the market will come is that right or you like no we can have Unity economically efficient markets from day one so it depends on the industry for marketplaces such as ours there is no way you can have positive unit

economics from day one and the reason for it is very simple this is very strong Network effect business which means that you do need to overcome this initial chicken and egg problem you need to get the drivers online you need to get the customers online and it first unit economics are deeply negative you actually have to subsidize both sides of the marketplace to get the liquidity up and then once you cross a certain threshold then it becomes self- sustaining if you hit critical mass and then it becomes a massively profitable business what have been your

lessons on what that threshold is so generally um for most these typee of urgan urban on-demand Mobility marketplaces the ratio is about 25% Market sh so that's a very high bar so you really need to subsidize hard often times for a couple of years before you get to that threshold and that's when the network effects kick in so we talked about that kind of launch Playbook how did the development of that launch Playbook go we're back now to 15 we've got Estonia working well but we've had 10 that didn't go so well how did we

go about that Playbook creation it was a very process so um and very humble beginning so my brother martin we designated him to launch the first Latvian market so he literally went there rented a small apartment uh which then also turned out to be our office after a couple of months and then he just basically slept there and then hired a few young students to help him uh and that's how we set it up so he was going to meet the taxi companies uh meet the individual taxi drivers organically start to figure out how do

we get demand into the marketplace by giving out business cards and leafletting and all of that so very humble beginnings what have been your biggest lessons on what works for driver Supply and what doesn't at the end of the day about 80% of volume is uh driven organically from word of mouth so nothing can beat that even today uh and all the pay channels make up about 20% in a mature phase however once you start in a market of course it's different because nobody's heard of your product so the question really is how do you

get the first couple of hundred drivers and the first couple hundred customers on board and generally we see the most effective for both sides is a comp combination of PR so you always got to get some first launch Media and you get some exposure from that and then the other thing is just paid online ads and for us generally the most effective turned out to be Instagram and Facebook ads so that's how you get the first couple hundred people excited and then after that your product needs to be great because if it's not then all

your cohorts will fall to zero if you actually have a fantastic value proposition then the other way around your K Factory is going to be positive you're going to be exponentially growing listen I'm an investor we get shoved cat to LTV ratios the whole time by found and the question that I always kind of oscillate on is do CS go down with time as you increase word of mouth and brand or do they go up as you saturate your core ICP in the core target market how would you advise me so marketplaces have this very

unique Dynamic which is that in your first six months the unit economics are always horrible because you don't have enough liquidity in the marketplace so you constantly need to subsidize the drivers otherwise they're going to drop off you constantly need to subsidize the customers otherwise they're going to go away so your first six months of unit economics will tell you effectively absolutely nothing so they always look bad and then you just got to have faith in the model that as long as you keep on investing long enough then you will hit some threshold and then

it's going to flip into profitability and that is almost impossible for any Financial person normally to understand and then that was why it was very difficult for us to raise funding initially as well any other lessons on driver Supply that were like I wish we' done this I wish we hadn't done this so one trick we did um that really helped us get going in some of the first markets was actually to go to the market with a sauce product and then convert it into a Marketplace afterwards so there's a good saying that people might

join you for the tools and stay for the network and that's effectively the logic we did so in some of these countries we had no money so we we couldn't do our nowadays Playbook of going in and then paying the drivers to stay online for a certain number of hours we just didn't have the budget for it so instead what we thought is maybe let's go to this local uh taxi companies and give them great tools instead so we give them Fleet management software we give them dispatching software where they really have a huge productivity

lift from that because otherwise they were running on Old School radios and writing stuff down in notebooks so they really loved it so we were able to get the first companies on board with that and then they added all their supply into the ecosystem so we suddenly had hundreds of drivers online and then that what was was sort of what sold the supply side for us and then we then took the next six months to build up the consumer platform without worrying about this chicken and deck problem because the drivers were there anyway and then

of course what happened over the next couple of years was that these taxi companies that some point realized that hey we don't even need this dispatching software any longer like we can just actually drop our call centers and we're just going to get all of our demand from this application so it was a very sort of natural go to market that I think actually a lot of these Marketplace Founders um often times miss that that's a great opportunity I'm so enjoying this so your brother is running Ria he's got this beautiful HQ very big very

professional it's also his apartment uh with his bed in the corner um what Market was the biggest surprise good or bad and why I I think the biggest surprise I've had to this day was how successful we were in Africa and uh the logic for us was that um so we raised this first million we tried to launch in a bunch of markets that failed then we took a step back and started doing this um iterative approach of launching incrementally one country after another and I think we had about four or five countries working nicely

in in Europe and we're quite happy with that and when you say working nicely what Revenue are we at there so probably each of those was doing maybe 10 million of of cross bookings in terms of how much people were spending on the fairs and then our commission of that was typically around 15% so it was like 1.5 million AR per per country okay this is real volume yeah so it was decent we could hire a decent team to run the country they were growing nicely but when you then zoomed out and thought about where

is this business going to go over next couple of years it was clear that we need we need more geographies we can't just operate in these small central eastern European countries and that was never the ambition for us so then what we did was we uh just made an Excel list of thep 200 cities in the world we ranked them by about seven criteria on purpose we kept these models very simple rather than complex it was things like population regulation number of drivers um what's the car ownership rate in the country metrics like that and

then um we then ranked the table and we tried to take all of our bias away from it and just look at what does the table say and all the African cities were ranking top of the list and we had no clue about Africa I had never even been there so so the top one city on the list was Johannesburg and none of us had been there we had no idea what's going on um and we didn't want to replicate their earlier mistake of of prematurely hiring people into countries before we knew whether they're going

to work out and we didn't really have the budget to to do that anyway so we thought U Back Then in 2015 is there a more cost-effective way to launch these markets and then a trick I still don't understand why more companies don't do is that we just then set up online ads to customers and to drivers saying that bolt is now live in Johannesburg without having nothing so we just put like a couple hundred EUR budget start running dad in in a bunch of these cities in dozens of the cities that we had identified

and then the whole idea was that let's run it for a couple of weeks see how many customers signed up what what is the CAC ratios in all those places where do we see the best their eyes and that's going to be immensely valuable signal to then figure out which are actually going to be the places we're going to launch uh and this was just such an effective hack so in just a couple of weeks we identified that hey here's the top Seven Cities that have the best numbers so let's now go to those and

only hire people in those cities and some of them were very unintuitive so many of the Cities from the regional list dropped off okay so what were the top ones two so exactly the first one was Johannesburg and top two was Lagos in Nigeria Johannesburg and Lagos you are still respectfully a kid from Estonia from Talon and you've never been there how do you launch in Johannesburg and Legos so um that was the thing that also really differentiated us from most companies was that we really always look uh extremely pragmatically at everything and we always

try to calculate the AIS of everything and we sort of go from first principles so the logic for us then was that okay what do you really need to get this service off the ground so effectively you need hundreds of drivers in the ecosystem but okay what do you need for that so we just started running these online ads for drivers and we saw that hundreds of them were signing up because unemployment rates in some of these countries were huge like 30% so you had a lot of people who wanted to make extra income and

then we thought okay what's next we uh just put up an online ad um for um hiring the first employee and some young kid from a university signed up as a sort of part-time job uh and then we had the Skype interview with him back in like 2016 when nobody was hiring remotely and we told this kid or a video call hey we're going to figure out a way how to send you a card so you can pay for utilities so you go and you find an Office base and then you start calling all these

drivers and start training them and that's what we did so this young kid just trusted us through a video call CAU the first office BAS sent him a list of drivers he called them and got them into the office and trained them up and that's how we prepared for launch so that happened for a couple of months we had enough drivers and then one day we just clicked the switch and turned on the service for customers and this kid in where was this log this this was in Johannesburg okay is he still with the company

I think he was with us for for a couple of years but eventually of course we realized that the market became huge it they started doing hundreds of millions of dollars of gross bookings tens of millions of Revenue Africa an immediate success so the bizarre thing was that we we started it as an experiment and we thought if these are going to be turning out as good of a market as let's say lattia then we're going to be happy but instead what happened was in six months Johannesburg went from being zero to being more than

half the business just from scratch with one local student running the whole operation how many other cities did you have in play at that time it was probably 15 cities live in in a in Europe at the moment and it was more than half the business it was incredible so why was that was that frequency of trips number of actual kind of customers so how we measure success in the company has always been by one metric from day one of the company which is cross bookings so it's it's how much actual monetary volume of transactions

is happening on the platform uh and it was incredible to us the number of trips was immense it went very quickly from zero to Millions but the monetary value of the trips was was so high we didn't really expect it that South Africa and trips are going to be almost the same price as some of these trips in Eastern Europe why gross bookings that doesn't necessarily determine user happiness so like frequency of trips would suggest actually that I I love it and I just can't get enough of it but they may not be very much

it may be just quickly around the corner or a mile why is gross bookings the focus so my view is that it's the only thing that matters and if you ask me what's our retention what's our activation rate what's our C I couldn't tell you really any of those things because I don't think they're real they're completely relevant so the only thing that at the end of the day matters is what's your gmv or cross bookings and uh I think it's encapsulates everything that is either going good or going bad in the business and the

reason for it is that if you have great retention then con consumers will keep on returning to the platform they will keep on doing gmv if uh they like it they're going to be increasing their frequency over time which means they will do even more gmv and they will also get their friends to the platform which will bring even more gmv so again that's the only Northstar metric we're focused on and of course there are some teams who look at CAC who look at the acquisition rates you know who look at the pension rates but

that's a clear secondary priority for us that's never been the the north star of the business okay so we have Johannesburg now and we have logos now and we're looking at this going huh maybe we underestimated the potential of this business in different parts of the world do we have a strategic discussion now in management and say something's changed absolutely so we were just monitoring these dashboards every few hours we couldn't believe what was going on because just the consumers signing up were by the thousands every day we had this thousands of drivers signing up

who wanted to all get on the platform so we very quickly um had to update our sort of priors and be like okay like this is actually going to be fantastic like this this might be the entire company six months from now and that's exactly what what happened so we uh we created the SWAT team of people in talin who identified okay what are the next 15 countries in the world where we could replicate the same thing so we just continued with this original exercise of then taking the next cities from the list running ads

in those places figuring out which ones have the best traction and just launching there and we went very quickly from having no presence outside Europe into suddenly being live in about 15 countries so we launched all the major African economies we hav launched in places like Mexico without having no presence there not flying anybody there just full remote launches and and almost all of these launches turned out to be fantastically successful what did you do that made you successful with these launches first so now what is worth to mention is that we weren't the first

to Market in those places and that's what really makes bti unique companies because as I described already this is a very heavy Network effect business so the first player has a huge Advantage they have bigger density they have therefore better pickup times in terms of the cars uh they can therefore offer you a much better customer value proposition so if you're coming in as a second player it's it's generally almost impossible to ever catch up to that uh unless you have something very unique that the other player isn't doing so what we we did that

was a couple of differentiators first of all we localized much better so what was clear was that especially these American players in these markets completely neglected the local needs how did they neglect no local needs one one trivial example they they were operating in Kenya only allowing you to book a ride if you had a credit card attached you know how many people in Kenya have a credit card less than 2% so they were just completely missing 98% of the market who even couldn't use the service so we were wow there's effectively a complete opening

for us of sort of empty Market that we can go into and the other thing was that we really optimized for being the most cost-efficient right handing operator in the world so we took a very small cut and what that enabled us to do was that we were able to pass on much better rates for the customers so generally they were paying 10% less and we were also able to pay the drivers 5 to 10% better as well so actually both sides of the marketplace had a very clear Financial reason why to flip over to

us and then that was enough to overcome this initial critical mass I spoke to DAR at Uber before the show and he said i' I just want to make sure get this quote right cuz he might you know be a little bit upset if I don't get it right um it's something along the lines of essentially you are often second or third in a market how do you feel about that and is that an okay strategy well I'm uh facts and numbers based guy so let's look at that um today we operate in about 50

countries around the world and bolt is the number one most popular platform in more than 20 of them so we're feeling pretty happy about where we are and when we look at the trend most of those other 30 where we operate we are continuously taking share for the reasons I mentioned earlier uh we offer a better value proposition to the customer or for better value proposition to the driver and in a lot of those places we're confident that over time even though we're a second mover uh We've we've done that before I think we can

catch up and actually become the most popular platform is it still a good business if you are second it depends on whether you're a Frugal company I'd say that if I look at some of our competitors like LT in the US I don't think that being a number two is sustainable uh but it is a very profitable business if you're able to run a very lean operation I'm sorry for the spicy request what happens to lift from here you mentioned them I think that um their only way out of this is to optimize their costs

I I just generally don't see how they're going to be an independent company five years from now with the current cost structure do you think they sell I can't really think who would be a natural acquirer it's it's not easy company to turn around okay so we have this like massive Market expansion and we are now in Africa we're in Kenya we're in Johannesburg what was the first and most important things that broke in This Global expansion because this just sounds like too good to be true so uh of course what was going on behind

the scenes was Mayhem was complete Mayhem right so we were running all of this with a tiny team of about five people from Estonia none of us had beaten these car markets before so we had to figure out everything how do you localize the product how do you collect payment how do you issue invoices uh how do we hire people to keep on training the drivers how do you on marketing at these places so it was a complete mess but it was also the the most fantastic the most fun part of the business because we

were all young kids just figuring stuff out on the go now I'd say that actually nothing major broke but I think the one area that we neglected for too long was was how um intensely we focused on um especially on on the regulatory bit so I think we started off as a small company didn't have to worry about it because again often times we're the second mover into these countries so by the time we came in the regulation was already sorted but there was a couple of instances where for example in Poland or in Czech

or in the baltics we were the ones who defined the category and The Regulators were then coming to us and were asking us for input like how how should we regulate this thing uh there hasn't been a platform such as yours here before and I think we neglected it for for too long before we actually realized that I think we should set up a public policy team uh and actually give these Regulators what they need I mean and give them input of what we think are the best practices how to regulate this thing and of

course that doesn't come naturally to most tech companies especially ones growing at that hyp speed so I think we we probably could have done that more of a year or two earlier of just engaging with the public and and sort of trying to influence where this goes is speed the single most important thing in startup growth and development speed is absolutely the most important thing if you can execute it with high quality because I do see a lot of companies that execute fast but I think they're just cutting corners and and launching that they shouldn't

be launching and then at the end of the day it's it's a lot of momentum but really no progress so what thing did you do very fast that you should have done more slowly I think we could have um actually been more deliberate about which markets um we choose to expand into so I I think that as I mentioned we had this first wave where we we just expanded with the wrong model and looking back if we hadn't done that and we would have done this better model that we stumbled into a couple years later

I think we could have just accelerated the whole evolution of the company by that period Okay so we've now got this like exploded Market map of Bolt adoption and very successful markets where are we at in our fundraising life at this moment still the same where we were back in 2014 you've only raised a million at this point so by that point we had raised this 1 million seed rounds um and then our metrics were just going through the roof we were probably at that moment among like top two percentile in terms of startups maybe

in the world but for sure in Europe in terms at that point at that point we easily Crossing 10 million AR probably growing 500% a year [ __ ] and doing that with an additional budget to 1 million when what year was this I'm just trying to understand if I was so that that was back in 2015 26 so we've got just raised this million when do we go [ __ ] we need to raise a lot more money so it was clear to us all the time that we need to raise more money because

we were operating with always having a month of two of of cash in the bank so it was always a huge stress for me can I even make next month salaries because seriously it was it was a complete disaster so we we tried to raise every way we could so I met all the VCS around Europe I could get my hands on I get to these meetings uh show them the metrics tell them the story and it was one of those cases where they were like this seems like a great team obviously have fantastic metrics

but we just don't believe in the category like we we think that you guys are going to get wiped out and no matter how many of these meetings I took and it was dozens maybe even hundred they all told us no did all the big Brands say no every single one what was that most common reason they just said that this category is a win or take all Market there's not going to be any room for number two and therefore it doesn't matter how great your metrics are we're not going to invest which was the

best meeting that you didn't get I think that we actually didn't get the meeting with sequa back in those days and that's another story of how then they later came back to the business four years later who who was that meeting with at sequa actually didn't get the meeting that was the sad part so we we tried to approach them many times and then back then I think we weren't an interesting enough company wow did you get a response yeah we just uh got the response that say like uh thanks but uh you know we're

not interested in the category at the moment wow okay so what was the series a so we took a very unconventional approach so first of all uh we realized we have to raise some money we saw that all the sophisticated VCS didn't want to invest uh so uh we had to swallow our pride and be like okay we need to raise money was the compan is going bust and we need the money to continue this fantastic expansion so I contact any body I knew who had any sort of money so I remember this one meeting

was with a local real estate company in Estonia so I I go there probably back then like a 22-year-old kid and they'd never even heard of a startup they'd never heard of a tech company and then impeaching them about how our metrics are doing what the story is going to be and then I remember at the end of the meeting they were like we've never invested in anything like this we never even done any investment outside of real estate but you seem like a good guy so we're going to invest half a million dollars in

the company and looking back it was completely insane that they did did that but I mean they invested at valuation of about 15 million so by now they made like easily more than 100x return on that investment and the only reason they did was because they' never even heard of any of our competitors so they just look at it on the merits of the business and that turned out to be much smarter than all the sophisticated VCS who turned us down oh my God that's insane so he turned 500k into 50 million yes even more

that is insane and so what did you raise in that kind of interim round you cobbled together yeah so so we cou together half a million from this real estate company similarly couple hundred, from a local railway operator um couple hundred, from a local telecoms guy so it was it was just this tiny all together maybe one million bucks and that was enough well we had to survive with that we had no other choice because nobody else wanted to back the company back then so when did Big cash come in so then after that the

metrics were doing fantastic um we probably got to the point of doing about 25 million AR growing multiple 100% a year um and still no VC's money to invest so just [ __ ] sake I was just I I just got so frustrated with VC industry I I was telling like I'm never going to talk to any VCS ever again and then what what happened was was the experience bad I think the experience was actually uh nice in a sense that they took the meetings they listened they were like yeah you seem like a good

guy they tried to give me some advice but at the end of the day I didn't need advice what I needed was money and and none of them were willing to invest in the company at the time so and then it all changed um very bizarrely when one day uh Mercedes or or diimler the the group approached us out of the blue uh and the interesting bit was that all these oems at the time were trying to figure out what is their strategy going to be so they all realized that Mobility is changing maybe one

day everybody's going to be ordering cars from these apps and that's going to completely kill their existing business so Mercedes was the one who had a big fund set aside so they wanted to buy as many of these companies as they could so they approached us and they tried to buy the business back then for maybe 100 million Euros which U obviously is a young kid would have been a fantastic outcome so we discussed it with the founders but my view was immediate that we don't want to sell the business we're on to something special

this is going to be an amazing business so we're going to turn it down how much of the business did you have at that stage probably 45% so you made $45 million say at 22 Yeah and we had a big debate about it with the other Founders like what what do what do you want to do and um I was completely clear that I want to build a business and they got lucky that Oliver and Martin were both very supportive so they were like okay it's your call you started the business if you want to

go for it go for it uh so we turned it down in a day we didn't even think about it wow that is incredible did was there anyone who did want to sell it well there was obviously some of these angel investors who are like wow we're going to get a great return of whatever 10 x in in a year and this is going to be fantastic for us uh but actually uh they all were of the same opinion that you started the business this is your call if you want to go for it take

the risk okay so we say no and they then invest in the business yeah and that was then the bizarre thing so then a year went by and our numbers just kept on growing so we we probably quadrupled the business in the next year and then we went back to them and then uh they realized that we're going to be the winner in this category in most of these markets so then we managed to convince them that they invested more than a 100 million at the billion dollar valuation so it went in a year from

being an acquisition to being an investment and that's turned out to be fantastic for them okay you've gone from raising a million from you know uh real estate company local telecoms people uh not the standard to 100 million from damler that kind of [ __ ] with your mind a little bit no well it was it was a huge transition so we we also in the in the interim had this interesting debate with um with the team internally that what are we going to do with the money because we we doing already really well and

we didn't really need to fundraise but what we saw was that if we do this fundraise and we're able to deploy it even nearly as efficiently as the past money then we're going to be able to just quadruple the business very quickly so it was clear to us that in order for us long term to have success in this category we need to raise the money that is insane that it was like one one and a half and then 100 100 absolutely I had no idea about that yeah it was a huge transition okay when

you get the 100 what did you spend on that you look back now and you're like why did I spend that honestly uh I I don't think we really did anything wrong with the money I think we genuinely spent it all really well so so Estonian so so so we had this super super clear moment I remember when we raised this round and I mean it ended up then there was some add-ons so it ended up even being $170 million round uh so 100 of that from from dler and then a few other investors joined

in um and I went to team I was like Hey we're not going to be changing the culture so you can imagine effective like we haven't raised any money so we're going to keep on operating just as we have uh yes we're going to be hiring bit more people but it's not like we're going to be bumping everybody's salaries massively or everybody will get huge teams now we're going to retain that similar cost efficiency e those we've had from day one and given that all these people had been in those in the sort of this

tough period for many years it wasn't the tough sale they were all like yeah this is what makes it special this is why we're winning we're not going to mess it up just because we raised around but you now have 170 million just in terms of like your execution from there what changed so what that mainly abled us through was just launch first of all significantly more markets at the same time and uh exactly it was necessary to overcome this initial chicken and egg problem because again the setup costs in some of these cities can

be absolutely massive to get going in a city like London you need to invest ballpark at least 100 million euros to reach that critical mass otherwise it's just not going to work what was the cheapest City to launch and what was the most expensive probably the cheapest cities to launch were the ones we first did in the baltics because they were tiny it was half a million people very little competition back in the day so you could probably get them so I mean Estonia we got going with 5,000 bucks so and then contrast that with

some of the biggest cities in the world where you need to invest tens of millions if not hundreds of millions did the grow okay so we then are in we're doing multiple cities same time we've got 170 million did the growth then just continue absolutely so we then went from doing that 25 million AR to very quickly getting to 100 million 200 million 400 million AR in just a manner of a couple of years when you look at the growth profile of the business I was brought up on this travel Trel double double I think

it's the kind of s maybe trouble trouble trouble but what was yours was it like 1 to five to 25 to 100 how did that growth profile look just so I get an idea so looking back it was probably we went from zero to 2 million ARR in about 18 months M and then from there we went to about 10 million a in the next 18 months so we 5x and then we went from that to 100 million ARR in less than two years and then we went from that to now we have two billion

ARR uh in sort of the next few years so it was extremely rapid exponential growth throughout this whole business two billion in there yes wow [ __ ] me that's a lot that's more than I thought when you get to that stage people really start to take notice of you when did people really start to take notice of you you feel there was a couple of changes that that happened with the company at the same time so first we were just growing really well so the numbers were so good and we got so large that

these investors just couldn't ignore us anymore so we we then started to also appeal to the financial crowd so actually the First Financial investors who who came to the business were um huge top Tier New York investors so we raised money from the likes of D1 and tsana and some great New York funds and it was just take me to that you've only raised from dner and some tels and real estate when like you know danheim and D1 come in with a hey you Marcus would love to chat was that a very natural normal process

how did that go so actually what I really liked about these um New York investors was that they were very numbers oriented so they really did very deep very sophisticated analysis about the the numbers the market shares the trends and they really like the story on top of that but they mainly invested based on numbers I think with VCS it was there way around so the numbers were great but they didn't really focus on numbers they sort of focused on what they thought was sort of the narrative in the industry and that turned out to

be completely wrong so all these New York guys who bet based on the numbers were were the ones who now made a killing on this I love that okay so you rais from them how much you raise from them so in Agro get we've now raised 1.5 billion so it's been a mix of maybe 10% of that from strategic investors and then the most of that from the European and then us-based investors so the emails that didn't get meetings from Sequoia when did sequ come back into the fry so then me 2021 um the company

was doing extremely well and we really had this explosive growth during covid so what happened was that the whole Mobility industry shut down and So Co hit and in four weeks we went from just massive like about 200 million of revenues to losing 85% of that what do you do at this time dude that is like it's unprecedented l time with Spanish [ __ ] influencer in 1917 what do you do so Co was this fascinating episode for us so we we're doing probably 200 million of AR it dropped 85% every other company in this

industry started laying off people they laid off 30% 50% whatever they thought was uh needy to for the company to survive so remember we had this meeting over a call with with the top management and we decided we're not going to do any layoffs we're going to be the only company in the industry that's going to retain all of our people and it's going to be a huge gamble because we lost 85% of our revenue and instead what we're going to do is that um we will uh do a salary reduction to everybody for 20%

and then we're just going to bet the company that in six months this is going to go by and because we are the only company that's keeping our team intact we're going to accelerate out of this faster than anybody and we gambled the company on that and that turned out to be fantastic so actually the team morale we got from doing zero layoffs while everybody else did was just such a massive moral boost that that people like were even opting in that some people did 30 40% salary reductions to get us through those next six

months what did you do in those six months I mean we all remember nothing happened so we did a couple of things so first of all we optimized every single thing we could in the business we're already Frugal going into covid but that really made us like question every single line of the p&l and we we squeezed everything we could to make the business more efficient the other thing we did was we really started preparing how do we come out of this much stronger and going into it so we actually launched the number of markets

so we were setting them up and it was great timing because all these drivers were low utilized they obvious didn't get trips there was no traffic going on so it was very easy for us to get into these countries and sign up to drivers they they they had no other alternative and then what we did was that these markets so how are you actually doing that because you're not going into these markets in a travel ban Zone signing up drivers how did you get drivers who are low utilized so so during Co actually online ads

worked really effectively so we were just running a lot of ads signing up drivers then once they signed up we started calling them and then they heard about the idea they saw that this is a great platform much better than the ones they've been using before and the word just spread organically so so we suddenly signed up hundreds of thousands of drivers all across Europe all across Africa okay and so we have these expansion moments it lasted longer than six months but not everywhere so what was the key distinction was that some of these Markets

started opening up very quickly so for example some of these Eastern European countries already three four months later by the summer of 2020 they were already up and we saw volume started to rebound and then in other places like London of course it took significantly longer but then what we did was we had this um war room where effectively almost every day we came together and we looked at okay what which are the cities which are opening up which are the cities not and then immediately when we saw a city open up we had a

blast of of just investing marketing dollars and discount dollars into that so we really accelerated out of all these um lockdowns and I think that's what every competitor missed so so we effectively came out of it with uh with market shares that were twice or three times higher than the ones going in how long did it take to get that 85% loss in Revenue back it actually happened very quickly it was probably five or six months uh before we were fully back and then we already started hitting new records after that wow [ __ ]

okay so going back to the seoa and so then what Andrew Reed like drops you a DM so uh we actually had the sequa team uh reach out I think it was the European team and um what was completely different from every other VC meeting I've had before that was that they had done all their homework before so we were just in the middle of raising a new round they approached us they said hey we've done all the homework on the company we're not going to be a burden um just share us some of the

metrics and we'll come back to you in 48 hours and I remember it was literally me having two calls with them and few days later they come back hey we're interested we're joining the round so they really lived up to their reputation it was just fantastic execution from their side how much did they write still to this day balt is the largest ticket sequa has ever done into Europe wow that's an amazing amazing thing and they did it in 48 hours yeah so the decision- making process was incredibly quick so from the moment I had

the call with them to them getting back to me was 48 Hours where we're joining the round and they that what price round was that so that was me 2021 so it was probably 4 and a half billion valuation wow okay so we have that right that's a very significant moment in terms of brand and validation for the company does having secur as an investor change the straty of a company I'd say that uh we were already doing so well that we didn't need any particular investor to help us accelerate the growth we had a

great model we just had to replicate that in more places around the world I think the unique bit that sea brought to the table was especially the brand in terms of imp pleas so specifically in Europe I think there was a lot of people who suddenly saw the validation that yeah heard bolt is doing well but after sequa and some of these other great funds invested it really put us on a map where some of these talented people finally made the decision to join how do you respond to people who say if people join because

of a fund they're the wrong people to join I'd say that um you can have wrong people join for any reason I mean wrong people might join because you're paying them too much or they might join because an investor in sort of came on board I think you just need to have a great process for weeding out for the people with right values do you think you were good at hiring I was horrible at hiring the first few years so so the The Story Goes that out of the first 10 people I hired I had

to fire seven of them so it it almost killed the company what did you do wrong I was way too optimistic about people I think growing up I I um just always tried to see the best in people and I was thinking everybody is who's going to join is going to be equally excited about the business they will spend all their waking hours thinking about how to optimize it turns out that wasn't the case at all uh and then what were they were they respectfully were they not as hardworking were they not as intelligent were

they not as ambitious I think it it came down to all of those things to some extent just we we hired people without the proper vetting process in the first year I was 19 years old so I had no clue what I was doing so many of these people joined with completely different expectations of what I had as a CEO and looking back I think it was actually a great exercise because uh I learned from that of which are the patterns you really want to find in people which are the patterns you don't and after

that I think we codified the hiring process to much more specific and then we had a lot of success with hiring in the Years following that if you could only have one quality in a candidate what would that quality be I'm still in the camp of intelligence so I would rather get somebody who's very smart it's fine if they work a bit less hours but they make the right decisions at least for our business uh you you cannot compensate with hard work if you don't make the right decisions have you seen that play out in

reality and if so how so um we have a couple of these extremely extremely intelligent people at to really Define the company I'd say Oliver our lead software engineer has been like that uh like he was able to do Al loone what took probably 10 average Engineers to do the same work and it was fantastic the company would have otherwise never never made it this far um and the other one is our head of growth uh pav who's been with the company for about eight years now who runs all of our Global um incentive uh

logic of how exactly do we figure out which is the small subset of customers who's worth targeting which are the ones that you don't Target uh and I think we have one of the most sophisticated Frameworks for how do we do marketing of any company I've ever seen so everyone says in Europe the trouble is that we don't have people who've seen growth like the US before is that true and where have you seen that if so I'd say that it's very hard to find uh strong people uh leaders in Europe uh who actually understand

tech companies and who have actually built organizations of thousands of people that I agree with there's just almost no tech companies of that size in Europe however um when you think about all these other things whether it's how do you do sophisticated marketing or how do you build large scale Engineering Systems I think those things you can find plenty of talent in Europe I think that either you can get people who worked in the US and come back here or you can just learn about how the best companies do it a lot of their best

practices are public so I don't really agree that like you cannot figure out how to do world- class marketing or engineering from here today would you rather hire great people in Europe who haven't seen it before or bring people in from the US and then face that challenge of assimilation culture moving people in our experience what has worked significantly better is is taking people especially from central eastern Europe who are really talented extremely intelligent hardworking good trustworthy people but they've just never had the chance to compete at the world scale before and uh they've always

wanted to but there was never a company in the region that they could join and those are the people who really built the company and they're very loyal they grown with the company they know everything they've been here for years and I think it's just completely different mentality than than hiring people into Silicon Valley for example who often times might move on to the next thing two years later so we don't have that kind of culture do you think the UK fund the European funding environment is poor quality I think that it used to be

very bad 10 years ago and it's significantly better now but there's a lot of catching up to do to the US in what ways could it catch up first of all uh we're just limited by funding so one of the problems is that if you look at where's the money coming from into the US um VC industry there's so many more LPS the big Pension funds are putting money in the University endowments are putting money in and that's not really the case in Europe so there's just I think far less Capital available do you do

you actually the show's successful now because I do argue back a little bit I would argue completely the opposite there is way too much money in Europe and there are way too few opportunities and the result of that is you see this concentration of capital into the few Obviously good ones and the prices are just [ __ ] nuts and I mean the amount of mediocre to poor large funds is insane in Europe I'd say that uh for sure there's a self-fulfilling prophecy in that as well that again if you have enough Capital available then

these companies can raise the money they need to actually compete with their us counterparts and if the money is not available then they're just going to get out compete it not because in any way they would otherwise be a worse company but just because they don't have access to the funding and at least in our industry we've seen that play out many many times where it's it's been very clear in the food delivery industry grocery delivery uh transport in general where a lot of these companies from the US just have more funding and that's the

only reason they win get you what would you most change about European funding then other than more I'd say that uh they also need to be more ambitious and be able to to tolerate that some of these businesses take a long time to get to profitability from what I've seen many of these uh investors just demanding profitability way too early before these companies actually get to a massive scale Marcus I'm a 19-year-old European entrepreneur I know I look a little bit older uh you're advising me I've started this business and I'm really excited about it

we're at a million in in AR should I raise from from European VCS or should I just go straight to the US what do you advise me uh I'd say that now in 2024 there are good European VES available so I would think that it's easier to raise from Europe and these people can also help you recruit talent in Europe however if you want to go and your target market is in the US then I would probably raise from us investors because they will help you with connections and talent there do you really think think

VCS add value I think there are some VCS who had value but probably 80% of them uh just Provide Capital and and that's that's it when you look back now what would you have done differently about fundraising I've uh would have likely gone to these um New York funds much earlier I think that actually I at first just didn't even think that they would be willing to invest in private companies such as ours but actually the moment we got to First meetings with them and they saw the numbers they were really excited and they think

they could invested in the business a year or two earlier you've expanded well beyond the core category now talk to me about the decision to expand to other categories and how you thought about that we always had the ambition to build a replacement to your private car and we knew that right hand glown is not going to do that right haing is going to be a huge business but uh there needs to be other modes of Transport we're going to offer on the platform as well uh but the first 5 years we were just having

no resources whatsoever so right tailing consumed all of our attention all of our money and then probably in 2018 we for the first time realized that we actually have enough budget that we can take on one new BET and then we debated internally long what is that going to be and then we um took a gamble on micro Mobility so we decided we're going to be the first rilling company in the world to launch electric scarters on the platform as well and that was actually quite a controversial decision both from the employee point of view

but also from some investors because they were thinking that first of all it's a hardware business so it's very difficult ult um and second you're going to be cannibalizing your own very profitable rideing trips because there's a big overlap um how about 40% of the ride hiling trips in a lot of these countries are um less than 4 kilometers long so you're going to be cannibalizing that and pushing people instead of taking R tailing car to taking a sarter instead and you will have much worse margins there but our view has always been significantly more

longterm we've always been thinking that it's great for us to cannibalize ourself rather than let somebody else do it so it was very clear to me that this is going to be the Future these electric scoters and bikes are going to be everywhere so either we can build that category and Define it based on our rules or somebody else is going to come and they will steal our customers and I think long term if you build for the customer you innovate on their behalf you give them better options I think they will reward you with

their loyalty that's always been our philosophy did you choose specific cities to launch micromobility in first oh wow that was a horrible experience so so so we uh we first launched it in in Paris and the the logic there was that it's a big city people have uh High incomes um so it should be a great place to try it out and it was a disaster like honestly micromobility in Paris is probably one of the worst places in the world to do it why because the rate of vandalism was like nothing we've ever seen at

some point we were losing 3% of the vehicles every week because people were just stealing them throwing them in the river trashing them it was absolutely horrible so there was no way the unit economics were ever going to work there what did so you just pull from Paris yeah so actually is funny also the competition I remember this kind of I don't know five six years ago it was insane when there was I mean there was dot there was Uber there was you I was like oh my God exactly so so we we saw the

similar thing happening in micromobility as we had seen in R tailing a few years before which was that suddenly the sector went from non-existent to suddenly becoming 10 companies everybody raised tens of millions of dollars huge competition so it was a big land grab um but what we saw was that all right France wasn't working we're thinking have these quarters we've already bought let's give it a shot try it out somewhere else and then for a while we're thinking maybe let's try another relatively higher income City but then at the end of the day we're

like okay let's try it out in Estonia it's our home Market uh let's see what's can happen and then it just took off really well it took off way better than it ever did in Paris so the consumer utilization was better why do you think that was I I think what actually what we underestimated was that micromobility is just a category that will work in almost uh every city in Europe and think back then we were skeptical and we were thinking that maybe people don't have money they're not going to be willing to pay for

the convenience but absolutely they were even in place like Estonia people were happily spending a couple of bucks to get a where they needed a bit faster okay so we have it working in Estonia then we slowly expand out with micromobility yeah so that actually was then the first city where we saw that unit economics really made sense and then we were fac why are unit economics worse for micro Mobility than they were the core writing because just fundamentally the the pricing per kilometer was significantly lower uh um so uh and on top of that

the margin we at least saw in the early days was much lower as well what is the margin on it so in good markets you maybe able to get to 20% contribution margins but in bad markets it can be negative so it's it's not an easy business to to make it work and you've got a lot of logistics around charging and supplies now we today are one of the few players that's fully vertically integrated so we have our own Hardware team so we design our own squarters we have our own team in China where we

manufacture them we then ship them to Europe we have hundreds of warehouses we then need to charge them maintain them put them on the streets find the ones that are missing the ones that have been stolen so it's a huge operation there there's more than thousand people working on it but you say this so casually you know I presume you hadn't been to China before given you hadn't been to Africa and so how do you get a team in China making scooters for you like what is that story so so we actually got the extremely

lucky with that so once we had this first Traction in Estonia and it was clear that this is going to be a category one to do serious so that first one you just bought a load of scooters from somewhere exactly so so we bought these nine bot scooters off the shelf and that turned out to be a disaster they weren't designed for sharing so most of them broke down very quickly and that's where all this narrative comes from that these quarters are not sustainable because those weren't so what we did was we saw this first

Market work and we we had two approaches either we could buy more of this Hardware was just going to break down or we could take long-term View and be like hey let's actually design a scooter from scratch that is really Built For This that's going to last long that's going to be very cost- effective but we had no idea how to do Hardware I mean we were we were R handing company right so we just um tried to hire a team and we got super lucky so there turned out to be a team of about

10 engineers in Estonia uh who had been building electric vehicles their own life so that was their passion um but they didn't really get product Market fit so they were toying around building the first products but none of them took off so went to them and were hey would you want to join the most successful startup in Estonia like we we're going to give you a budget we're going to give you a consumer base just build this for us joined the team uh and it turned out to be fantastic so so the team joined they're

still all of them with the company now five six years later and they're probably now on like the seventh iteration of Hardware that they're building for us uh so it was just turned out to be a massive win-win for both sides okay so they're building the hardware but dude you still have to go to China you still have to get a factory you still have to get rent get local employees I I don't know what you have to do that's like my basic knowledge how did you do that so we got luck that this specific

team actually had their connections in China they've been working with for a decade so we got this team on board they told us hey we have the connections we're going to sort all of this out so just give us the budget we're going to sort out the designs we're going to procure the hardware uh and it was just a fantastic partnership so they were how much money did you allocate to that CU that's a bit of a gamble so I think over time it actually in the grand scheme of how much money we've raised in

in general it's maybe been about 10% of our total funding uh but what it did was that it had this Mass massive transformative effect on rest of the business as well because we bought these hundreds of thousands of quarters to the market to hundreds of cities we became overnight from being having almost no presence in that sector to becoming the largest micromobility operate in Europe still to the state nobody operates with such a big Fleet in so many cities how much market share do you have in Europe today so the Market's actually pretty roughly split

between the top sort of four or five players like each of them has between 15 to 25% share with an eye to the Future when we think about self driving you mentioned it earlier how does self-driving factor into how you think we're seeing wayo all over Twitter I've seen so many friends wow this is like the iPhone moment how do you think about self-driving I remain optimistic that self-driving is completely going to change the world it's going to be one of the biggest opportunities for companies like us to change how millions of people live how

cities are designed how we spend our time is completely going to be transformative however I don't think it's going to happen anytime soon so when you look at these two Tech trees that they're currently developing they're both years out before making a service that's actually commercially viable that's actually cheaper than a human driver and one that actually meets regulatory requirements why so first of all the tech is just really hard so you have these approaches that use endtoend neural Nets like what Tesla and wave here in the UK are doing and I think they're making

great progress but let's be honest they're still years away from having a reliable service that can truly replace a human driver in terms of safety and the coverage of areas it can drive in and then you have the other Tech Tree which is what wayo and Cruz have been doing which is very different it's much more expensive you have significantly more sensors like more lighters on the vehicle uh and that sort of is getting to the point now where it starts to work as good as a human wood or even better but there the costs

are just so prohibitive the costs are significantly higher than than a human wood so it's going to take the multiple years for the cost to come down help me understand that because I have a lot of friends in San Francisco now who say they go to work every day on a wh and it is the same price or cheaper yeah but there's a difference between price and cost Google is one of the wealthiest companies on the planet they can keep on subsidizing millions of Rights for a long time that doesn't mean the cost structure is

there how long will it be do you think I hope that we're going to get to the place where the technology and the costs are sorted out over the next 5 years and then it's probably going to be a couple more years after that for the regulation to to get sorted especially in Europe I think it's going to take a long time if Italy hasn't even figured out the right detailing regulation in 10 years I wonder how long it's going to be for them to update their self-driving laws what do you do then you vertically

integrate and buy them you partner my view is that um most of these companies like weo over the long term don't want to operate uh car Network it's just too much hassle so I think that these companies can build what they're fantastic at which is building the software and then there's going to be companies like us that actually do the real world operations because I think most people people underestimate how difficult it is to operate a million or 5 million or 10 million vehicles in hundreds of cities comply with all the local regulations collect the

payments deal with customer support clean the cars charge the cars Etc I think it's it's sort of just a scale of complexity most people can't even fathom and they just handwave and think it's going to be easy no it's not not to mention the insurance the financing the procurement of the cars etc etc like I think that relling companies like us are absolutely going to be pivotal for these self car companies to actually go to market are you expanding into San Francisco not anytime soon good um what is Uber better than you at today and

what are they worse than you at today I'd say in general um what uh everybody else in this industry who survives by now there's about seven companies left what they've been doing better than us is raising money they've just all raised multitudes of of how much we have raised many of them have raised 5 billion some of them raised 15 even 30 billion while we have raised 1.5 are you profitable today so our story as we started with was that we were bootstrapping the company the first four years then we raised more than a billion

dollars we invested a big chunk of that over the last five years and now we're returning back to profitability but now it's our choice we have a big set of markets that have been profitable for years why do you decide to do it now you can continue to invest continue to go for growth what's the rational for saying let's go for profitability so our priority for sure is still growth 100% so there's no intention for us anytime soon to become a profitable um company that would be paying dividends or anything like that um absolutely the

focus is growth however uh we have a set of markets where we've built out a fantastic category their position we have millions of customers the business is organically growing well it's very profitable and we're taking that cash flow and investing that into other parts of the group so either we're launching in more geographies or we're launching new product lines and we think we're going to keep on doing that for the next day what product line do you not have that you would like to have so we already operate five which is a lot for almost

any company most companies can't even get one business line to the scale that we do um and uh so we do ride hailing we do scooters and electric bikes we do car rentals we do restaurant delivery and we do grocery delivery so it's already a full set of products in dozens of countries can I push you what's the smallest um uh Revenue makeup so the smallest today is is still or car rental product why do you do it because we we have a lot of conviction that long term that's going to be a multi-billion dollar

category for us why [ __ ] incumbents really [ __ ] incumbent so as as most people have interacted with these old school car rental companies I don't think anybody's very happy with the experience and I think that's even the small view one one current segment of the market is that people get out of the airport then they need to rent the car for a couple of days and sure that's an exciting category and we're looking at ways how do we make that experience better and similar right handing we don't expect we need to operate

all of this ourselves we think we can partner with those companies give them the tools give them our operational knowhow and improve the experience so that's one but the other thing is that I think we we need to be way more ambitious than that and it's like how do you actually create a new version of effectively zip car which is that you can just rent these cars in a city on demand just walk up to them open them up with a tap and you can actually get a ride so that is the category we're way

more bullish about and it's already working fantastically in about 10 cities now in Europe and we're just scaling the up so what are you not in so if you were to add a six what would you like to add as a six we have this uh wish list of probably 50 ideas that we're looking at every year and thinking about what are we going to launch next year so the one I'm I'm currently bullish about this um dining payments so in many parts of Europe and the world it's actually not a common thing that you

can scan a QR code you see a menu you can order and pay from that and you can integrate it with everything else we already do in the Bol food ecosystem so you can have a loyalty program there that's all attached to that so whether you do food delivery or you do U the dining experience or any of these sort of food related services like they can all tie into a really nice holistic ecosystem so that's what we want to build next oh it's [ __ ] hard I've done the scan to pay investing before

it's a it's a this is why you hate European VC it's a bad business and I think that's one of these things that uh what B is good at how do we turn these bad businesses into actually good businesses through just a level of of cost efficiency that none of these other companies can match someone said to me the other day the heaviest things in life are not iron or gold but unmade decisions okay what's the biggest unmade decision for you that weighs on your mind actually there's probably no single decision that I regret that

we haven't done I think it's rather that there's been multiple decisions that I would do differently if I could what's the biggest probably we should have been even more aggressive in our expansion so if I look back at um this period we had from 2015 to 19 where we launched all of these markets remotely it was a fantastic time I think what we did back in 2019 was that we started raising these bigger rounds and we were getting this external advice that guys you need to get more professional you can't keep on launching markets like

this running Facebook ads and hiring people over Skype calls like you need to have more rigor more process around it and it was one of those rare times where I actually listen to that advice and then I think we we slow down a bit on expansion and we double down on existing markets which had its merits but I think what it meant was that in some parts of the world we left the vacuum for other competitors to to fill in U and actually take meaningful share so looking back I think we we missed out on

a great opportunity there if we had continued in that startup mindset for a bit longer D this has been such an amazing story I want to do a quick fire round with you so I say a short statement you give me your immediate thoughts what do you believe that most around you disbelieve currently I think the most contrarian view uh that I've not seen any investors really buy into so far is that these retelling companies are really going to be the best way for these self-driving cars to come to Market from what I've heard from

most people they think that these companies are going to build their own operations and companies like us are going to get somehow squeezed out the market I think these people just have no idea about the complexities involved and how difficult it is to scale a right tailing Network such as this I think when you don't do the work it's difficult to know how hard it is absolutely we've been building this for 11 years with human drivers and that's already hard if you add sort of the complexity of managing this autonomous operation and cleaning the cars

and charging them and so on uh I think it's only going to get more difficult what's been the most lavish purchase then you spent on I'm a very frugal guy I don't even have a driver's license so the most expensive thing I've bought is probably in my my apartment in ton which is pro probably still cheaper than anything you could get in London does money make you happy absolutely not what's the reflection on relationship to money you need to have some base level of money to take care of your daily needs absolutely and to that

point I think it makes a big difference to your emotional health but after a certain point what I get most of my excitement from is actually seeing the company do well and actually see the people around me do well so the reason I come to the office every day is because I genuinely think we have a worldclass team and seeing those people who started the in the company as basically interns and now they're running hundreds of of people's organizations it's just fantastic so uh that's what gives me the most Joy what have you changed your

mind on in the last 12 months I was actually at First very skeptical of uh AI so I why were you skeptical and why did you change your mind I I started using jat GPT when it came out more than a year ago and there was a lot of um B about it and all these CEOs were coming out saying like how it's going to transform their companies and I'm on one hand a big techno Optimist but on the other hand I tried it out I asked a bunch of people in the company try out

see how it can optimize the work and it came back very negatively like nobody really thought this going to move the needle with the exception of one part of customer support and that was generally the one part that I was thinking optimistic this going to move but now I think in a year my thinking has switched uh significantly both on a personal level and on a company level so on a personal level u i now use these llms basically every day what do you use um actually a mix so both on Tropic and and open

perity um very little so far actually generally prefer the other two and then for the team it's changed as well yeah so for the team as well so it was clear that customer support it's going to be great you can automate the meaningful percent of work and make the customer experience better uh but I think it's it's also become more obvious to me that you can actually expand that to significantly more use cases whether that's something like a CRM so how do you make your sales reps and marketing people more effective or it's might be

internal tooling like how do people in the company discover information more easily how do you for example summarize documents and make better decisions so I'm getting more and more optimistic you can actually apply it in those domains as well what concerns you most in the world today clearly War I think that there's a lot of things going on well in the world of technology but I think it's absolutely insane that we have a war going on in in Europe Russia attacking Ukraine killing people and everybody's just basically forgotten about it it's just absolutely crazy yeah

I do agree with you it's amazing how it normalizes so fast as awful as that sounds exactly I mean the war has been going on for two and a half years and you know you ask most people in London they don't even think about it I completely agree with you um you're a fit dude I've known you for a while you're a fit dude what's the health or diet advice hack that not many people know about and that you think is great honestly I think people should just do the basics like that's the most contrarian

take here probably like everybody's trying to innovate and bioh hack and whatever like most people just should just take the basics really seriously sleep eight hours a day eat healthy food exercise a couple of times a week take a few hours off enjoy time read books chill with friends whatever works for you just most people don't do it when have you been most out of kilter in the bolt Journey well like you're sleeping like an hour a night and it's just it's your health is [ __ ] uh literally never over these last 10 years

I've never sacrificed sleep for for the sake of the the business I've always thought that that's going to be a bad idea I'm just going to be ill-tempered the next day I'll have uh worse memory worse decision- making so I've always taken it very seriously I always sleep well and they look at this as a marathon God [ __ ] estonians was so C and like methodical in what you do um final one what question have I not asked that I should have asked I think most people still um misunderstand how all of these ond

demand marketplaces are going to work out I I think that that's been the bizarre thing to me so I was always been this contrarian in this industry for 11 years telling everybody that I think all of this m&a in this right hiling industry is complete Insanity you should not be doing that um and again still to this day I think most people wouldn't agree with that why is it in s because uh this is fundamentally a dle industry this is an industry that at the end of the day stable state is going to be two

players splitting the market one way or another and whenever the top player pies the other one they buy themselves a couple of years before somebody else comes in and takes that second player spot as well so you're back to square one and we've seen time and time again how companies make this mistake they do this merger they think it's going to be fantastic they model out these Monopoly returns for a long time and it never pans out and just I don't understand why companies keep on making that mistake so what is the future of these

marketplaces I think that U most of the world has already stabilized so you look at this industry barriers to entry now are so high the technology getting places like London going requires such a massive need of capital that nobody's willing to fund in this new environment so so I don't really think that there's going to be new competitors entering the market in a traditional sense I think where this Innovation is going to come from is new modes of Transport either it's going to be something new like electric scarters or it's going to to be self-driving

cars but I think it's going to be a completely different thing that's going to shake up the market not the existing company Marcus I I do the show for shows like this which is I said to you before I think Art and Science the story combined with the lessons thank you for being so brilliant because it re-energizes Me and My Love For What I Do by doing shows like this awesome