A billion-dollar tech startup whose founder made waves earlier this year when compared to silicon valley to a “boys club” full of “mob bosses” has since seen its valuation in the secondary market crumble, The Post has learned.
San Francisco-based Bolt, which makes payment technology and competes with the likes of PayPal, Shopify and Square, was valued at $11 billion in January, the same month founder Ryan Breslow, 27, attacked venture capital giants Sequoia and Y Combinator, as well as payments company Stripe, for allegedly plotting to bring down his company.
Bolt attempted to raise more cash at an even higher $14 billion valuation just weeks later, but the company’s secondary-market valuation has fallen 50% from its peak of $11 billion in the months since the comments. of Breslow, private market sources told The Post.
An investor who bought Bolt during an earlier round is looking to sell a large holding at a valuation of just $8bn, but buyers are only willing to buy at a maximum valuation of $6bn as of last week, he said. a private market source.
Another private market source working to move Bolt shares told The Post in April that the company’s actual valuation is just $5.5 billion.
However, a source close to Bolt claimed that the company is receiving terms of reference (non-binding agreements that come before legally binding contracts) from unnamed investors who value the company at $17 billion to $20 billion.
Bolt declined to comment.
Sources said potential sponsors’ confidence in Bolt has been eroded in part by concerns about his leadership.
Breslow stepped down as CEO just days after his attacks on Sequoia, Y Combinator and Stripe, which is a private payments company backed by both venture capital firms. He now serves as CEO.
“There is too much turnover of administrative staff,” said a source from the private markets.
A broader shakeup in the payments industry is also making investors nervous. Fast, another payment startup and rival to Bolt that was backed by Stripe, suddenly closed this week after failing to secure funding.
Breslow mocked Stripe for Fast’s failure on Twitter on Friday, posting a meme and writing, “Stripe didn’t put $100m into Fast, they donated $100m to boost marketing. The best thing that could happen.”
The largest publicly traded payments firms have also seen their shares plunge this year after soaring in 2020 and 2021.
Shares of Shopify soared as high as $1,750 in November 2021 before crashing more than 50% to around $644 on Friday. PayPal shares, likewise, soared above $300 last summer before falling to around $113.
And shares of Block, the parent company of Jack Dorsey’s Square, traded above $275 in August but are now hovering around $125.
“Bolt’s downfall is a combination of Ryan and the fintech space,” the private market source said.
Ken Smythe of private equity advisory Next Round Capital blamed the dramatic rise and fall in Bolt’s valuation on investor hubris.
“When Bolt did his last round at a valuation of $11 billion, then raised it to $14 billion just as the NASDAQ 100 peaked, you could tell things were getting extremely foamy,” Smythe told ThePost. “If you’re an investor giving Bolt a check with a multiple of 183x income, then you’re just asking for trouble.”
“At the end of the day, investors are to blame for fueling the meteoric rise in Bolt’s valuation,” Smythe added.
If investors in Bolt’s January round are already underwater, the company could face trouble raising more cash in later funding rounds.
It’s unclear how much money Bolt currently has in the bank, but the company announced Thursday that it will buy a crypto services startup called Wyre, a move the company says will “bring Coinbase-like functionality to all trading.” ” and “will introduce cryptocurrency to a new generation of merchants and consumers.”
The acquisition was valued at around $1.5 billion, according to the Wall Street Journal.