Ashesh Shah, founder and CEO of London Fund, is, as you'd expect, bullish on Bolt. The London Fund is a British venture firm with “over $1 billion in cash and assets” under management that led a $450 million fundraise for Bolt, the one-click checkout startup that has been embroiled in a number of controversies over the years.
But Shah isn't letting all this deter him, describing the terms offered to Bolt as “a great deal for a company that we believe still has a lot of room to grow.”
I spoke with Shah on Wednesday afternoon about the deal and its surprising terms. The interview has been edited for clarity and brevity.
TC: Can you tell us anything about this proposed transaction?
Shah: The London Fund has been around since 2003. We're always looking for Ferraris with flat tires. Sometimes people don't understand why. Maybe it's the wrong color. Maybe it's not something the market knows. We're very technical. I've been a founder many times and have a lot of experience in this space. Ultimately, we saw something very special here. Bolt has incredible reach. If you look at the number of wallets, the number of people using the system, how it works, it's on par with Shopify and other big players. I think it's a hidden gem.
If you look at the potential over time, if you launch a super app, it will allow for interactions between wallet holders. When you start looking at Shopify and Bolt, you start to realize that the user base is so large, and that creates a huge opportunity.
Obviously this is a term sheet and not final yet. A lot needs to happen for pay to play/clampdown to work. What do you think are the chances this will be approved?
I hope this is the conclusion. We've been working hard on this. We've been thinking about it, working on it, tracking it for six months. We believe that what we bring to the table as a company and what Bolt has will lead to great new activity. I think there's great value for all shareholders. I think a lot of people have misunderstood quite a bit. We're just asking our existing shareholders to show that we're committed to the future of what this journey could be. Right? We're not saying anything negative, but we're saying, if I'm going to take the risk, I want others to join us. And if all goes well, we hope that this transaction closes pretty well and leaves it open for others to join with capital. We're simply leading this. There's plenty of room.
As part of the proposed transaction, your company will contribute $250 million. What marketing services are you providing as part of the $250 million investment in lieu of cash?
We provide tactical capital. We want to make sure that what we deploy has a very real impact on the companies that we serve. In terms of marketing credit, it's up to us to decide what that looks like. Essentially, it has to be the equivalent of cash…We believe that over time, many of the resources that the fund provides will be such that you don't need to take the intermediate step of cash.
One of our funds actually has influencers and media as LPs. So we provide name recognition in the same way that Warner Brothers provides TV airtime, but we are influencers, people who can talk about services, products, etc. If you look at Bolt, they're spending a lot of money on co-marketing. They've already spent about $80 million on marketing, and they're using that for co-marketing. So we're able to provide them with the co-marketing dollars that they need and the co-marketing impressions that their brand needs.
Think of it like a barter like OpenAI did with Microsoft. It's $10 billion. It's compute on Azure. They said it was a $10 billion investment. But it's actually also a way for Microsoft to precisely manage and monitor performance.
We like to be fully aligned from the LP to the company. We don't take a 2% fee. So another key point is that we are very aligned on the investments. We are only successful if there is an exit. Exits are big.
For our part, we tend to believe that if we can get into a company that has fundamental core assets like wallets, transactions and users, as in this case, we can do some really great things.
What do you think about Ryan Breslow returning as CEO?
I think that's important. I mean, he came up with it. He had the foresight to figure out how to build a system that could go into so many different retailers and help them in a way that was also helpful to the consumer. That's no small feat. I mean, compare that to Revolut or Shopify. Look at the speed that he's been able to grow. I think there's a way to make sure this business continues to grow. I think there has to be a vision behind it. There are a few more steps to this. Ryan has that vision.
But are you confident this will be approved?
We hope that this proposal will pass, and I think that all shareholders who are already present should seriously consider that this is a great way forward and a path to higher profits.
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