Bolt founder and Klarna board member Markus Villig on why Europe is sleepwalking into a 'disaster' on self-driving cars and physical AI

0:01Hello and welcome to the Sifted podcast. I'm Amy, your usual host. But this week I'm handing over the mic to my colleague Mimi Billing, Sifted's Europe editor, for an interview with Marcus Willig, the CEO and founder of the taxi app Unicorn Bolt. They caught up at Slush a few weeks back. Over to Mimi. So great to have you, Marcus. Great to be here. So Bolt is now in over 50 countries and 600 cities and ride hailing makes up for about 80 % of your revenue. You told me before that Bolt actually leads over Uber in around 20 countries. Is this still correct? Absolutely. We are the only company in the world, actually, that's coming to markets after that and still beating them at arguably their own game and become the most popular ride-hailing app in more than 20 countries now across Europe and Africa.

0:53Yeah, that's a real, it's amazing to hear because obviously we always compare US and Europe and so on. But which are the kind of key battlegrounds right now, would you say? Our core markets are mostly in Europe, but we're also the number one all across Africa. So we operate in very diverse markets from Nigeria to Norway. What's our current focus is to make sure we continue winning in the core markets. And that for us is the Nordics, Central East and Europe. And then opportunistically, we're expanding in many other parts of the world. So over the last year, we've had success everywhere from Dubai to Taiwan to New Zealand.

1:30So we're still very actively expanding around the globe. I also know that you just hired someone in the UK to lead your operations there. Does that mean that you also are pushing harder in the UK and trying to win that market? Well, the first priority for us remains on, again, Nordics and Central East and Europe. But obviously, in Western Europe, there's massive potential and we're only getting started. So we're the fastest growing challenger now in UK and France and Germany, but we're very early in those markets. Yeah. So in 2024, you hit like 2 billion in revenue, but net losses were over 100 million euros.

2:02So is that because you still like subsidizes a lot of ride hailing or is the reason something else that you still go with the loss? Well, actually the core ride hailing business has been profitable for many years already. So where the investments are going is partially into new products. We're expanding everything from scooters and bikes to food delivery. And we're also expanding geographically. So a lot of the investments go into new territories, again, like New Zealand, Taiwan, Malaysia, etc. So it's a lot of expansion. Okay. So you are not like pushing to the path of profitability right now.

2:35You think that investments into these kind of new products and markets are more important? Well, we've always been a very frugal company. We want to control our own destiny. And we're in a place where we don't need to raise any more financing. So we're doing investments only in the areas where we think there's very high return on that. So we mentioned here like Uber and Lyft obviously is in the US and you know it's been a lot of talk about European companies being well having a bit of disadvantage in comparison I mean do you think you succeeded in spite of being based in Europe or like because of it?

3:09I think because of it because we're from Europe we understand these markets better and I think in this sector it's very important to be cost-effective and that It comes more naturally, I think, to European entrepreneurs who are typically more frugal in their mindset of how they deploy their capital. Are you then pro-Europe or like frustrated with Europe kind of person? I mean, it's been so much talks about the regulations, right? And like how Europe is a bit slow in actually helping startups and so on. I'm 100 % pro-Europe, but that doesn't mean I'm not frustrated. There's so much opportunity we have in Europe if we just only got the roadblocks out of the way.

3:46and it's everything from the AI law to cookie boxes to so many other things where I think if we remove the bureaucracy and we support our local companies more we're going to have so much more success in Europe. We have seen kind of a lot of Swedish founders and others go out and become more political in this and actually make a real statement and discussing with politicians and so on. Do you also do that both like at home and at European level? Yes I've been doing that for years. I do think that having active citizens who actually contribute back to politics and give politicians the honest view of what they think should change is a good thing in a society.

4:21So I actually recommend more entrepreneurs to do that. Do you think it works? At least in Estonia and on a European level, it works really well. We've had a lot of success influencing the way these EU regulations go. Okay. What do you think about the 28th regime in that case? People obviously often talk about that. I mean, it's not really going the way that entrepreneurs want, right? I think it's a promising thing, but is that the loan going to fix all the problems we have in European tech? No. I mean, we need to do a dozen initiatives like that, all the way from a single capital market to enable tech companies to have access to more funding.

4:54We need to remove bureaucracy that doesn't help the local companies and so on. There's so much we need to do. I think you mentioned somewhere that with autonomous driving, that you maybe haven't done enough either. I mean, where are you there now? Because last time we spoke, you said autonomous driving could actually grow Bolt 100 times over. And well, I mean, since then, we've seen like a lot of things happening with companies actually leaping into this. Where are we now with Bolt? I think self-driving or physical AI in the real world is going to be as revolutionary as AI in the digital world.

5:33But EU is putting zero attention to that at the moment. And it's a massive risk. So again, about 10 % of the EU's economy is making cars. And if we miss this wave, we're not going to have our own self-driving car capabilities in Europe. It's going to be a disaster. And we've already seen this play out once over the last decade, where we missed the wave to batteries and the electric cars. And we can't now allow this to happen again in the self-driving car era. So what would you like to see? Would you like to see more of a Chinese kind of way of like putting lots of money into it and then owning the industry or like, what do you see?

6:06I think actually that when you put it in context, the European car making industry is in the trillions. And in context of that, we should only invest billions into the self-driving car industry to make sure we don't miss the wave. So I think it's a very rational investment we should be doing. What do you think is holding us back? I think ambition. So many of these European car makers and politicians, I think, are not thinking about the future enough. They're looking back at the mistakes they did and trying to remedy those, but they don't think what's going to change the world in the next 10 years.

6:37Yeah. I think we said before that it's easier in the US also because of the kind of cities and how they are created like more like a grid system. And, you know, even walking around here in Helsinki, you know, that's not the case. I mean, is that a disadvantage? It's making, obviously, it's slightly more difficult to build the technology, but I wouldn't say it's a transformative difference in the sense that that for sure is not the blocker. We should not have any self-driving car capabilities here. Yeah. So who do you see Bolt playing a part in if and when the autonomous cars comes into play? Our goal is to be the platform where everybody gets their transportation from, millions of people every single day.

7:18And that means we want to have all the vehicles there. Everything from bikes, scooters, ride-hailing cars and self-driving cars. And if we see there's a new provider who's going to come with better technology, then we want to have that on the platform. And it doesn't matter where it's from. Of course, as a European, I would like it to be coming from Europe. That would be, I think, fantastic for us. But if it comes from China and the US, we're equally happy to work with them. Are you already in discussions with these kind of companies? Yes, we're in talks with everybody in this space. And it's natural because we're the largest European ride-hailing company.

7:51We do millions of trips every single day. So anybody who wants to deploy their cars into Europe would benefit from our network and our customers. Yeah. I mean, you mentioned that you have like loads of products and loads of like, you know, and obviously being in lots of regions. Is this kind of part of like the super app ambitions for Vault or? Super app nowadays is a very ambiguous term. So in that sense, what we want to do is we start off, what does the customer want? And the customer wants an app where they can get their transportation needs solved. And we want to do that end to end. So anything they need in the world of transportation, we're going to offer them.

8:23Do they want us to help them necessarily with something else? I mean, I think that would be a distraction for us if we try to do everything. Yeah. So when we met at VC Creandum's 20th anniversary a couple of years ago, you were on the same panel as the buy now, pay later giant Klana's founder, Sebastian Siminkowski. And so when the Klarna announced that they were going to list of the New York Stock Exchange, they were also adding you to the Klarna board. And can you describe your relationship with Sebastian Simikowski to start off with? Have you known him for a long time? So the European tech founder community is actually quite tight-knit.

9:04There's not that many companies in the scale that Bolta or Klarna are at. So obviously these founders interact. We exchange lessons. I think share war stories and so on. So I think this organically has been a relationship that's developed over the years. And then when Sebastian reached out to me that he wants to get some entrepreneurial energy on the board to help him with the business and the strategy, I was very delighted. And obviously, it's a new challenge for me. I think I'm now the youngest serving board member at the US public company. Yeah, I mean, incredible, right? So what do you, I mean, you've had a few board meetings already.

9:41What do you bring to the table? Well, I think the unique angle I can help with is this entrepreneurial drive and ambition, where I think typically in a public board, you have people who are very focused on downside risks, especially in a field like banking. And that needs to be balanced by people who are focused on the upside and the mission and how do we build the best product for customers? How do we allocate capital against the right strategic priorities? So that's the perspective and the challenges I bring. Yeah. Do you learn something from it to bring to your own kind of board at Bolt? Absolutely.

10:14I think it's, first of all, a very different kind of business, right? I mean, we don't have experience in fintech. We've been doing transportation for decades. So there's some insights from there. And the other thing is that the US market is still quite different than the European market. So it's interesting to see how they operate. And whilst on the topic of Klana, which listed a couple of months ago, So you have said that Bolt is like preparing for an IPO, but holding off until the market conditions are favorable. When is that? And how do those who are in market conditions look in that case?

10:46Because now it looks quite favorable. It's actually not necessarily only about the market conditions for us, right? So even if the market is in a good place, which it's been heating up lately, especially if you're an AI type of company, that doesn't mean that it's the best fit for Bolt at the same time. because we're in a place where we don't even need to raise money. The company's been profitable for a while. We're growing on our own. We're financially in a great place. And we don't want to currently take on the distraction of going public when we have a couple of years of intense execution ahead of us.

11:18Okay, we're postponing at least a couple of years then. Well, we're ready for it. And if circumstances change, we're going to IPO. But I mean, it's not like that's the end goal for us. The end goal is we want to provide millions of customers with great service. We want to win in our category. But you also brought in like 220 million involving credit facility. And I mean, was that to actually get yourself not ready for an IPO then, but just for the runway or like flexibility? Like how did you need that money? We operate in a very capital intensive industry. We constantly need to invest hundreds of millions to scale the platform, to reach more customers, bring more supply to the platform and so on.

11:55And this RCF was meant for that, but we actually haven't even drawn a single cent of it. So it's great to have the optionality. Okay, yeah. If we go into something else that's also kind of linking to the kind of Nordic or the new Nordics kind of founders' sentiments and so on, it's defense. And we've seen like lately both like Daniel Ek, Sebastian Simukowski, other founders also investing in this kind of space, even if they're not in it themselves. And you have also kind of touched on this, right? So what do you do in Estonia primarily? I've done a few things. First of all, we started the Estonian defense tech meetups about two years ago, and these have now grown to be a massive series of events with operations now in more than five countries, hundreds of people attending every time.

12:45And the aim of it is to bring together technologists and people from the defense industry and investors and create this ecosystem around it. And I think it's been very successful. Thousands of startups have come out of it or gotten their funding thanks to that and it's something we're looking to scale up across europe and the other thing we've done is that i've been advising the estonian government on how to set up the defense fund so estonia was actually the first one to set up a hundred million euro fund to specifically support defense companies including ones who do lethal products not the ones that only build dual use systems like communications because i think the reality is communication systems are not going to really save us in war.

13:24We need something that actually flies and takes down the drones that are attacking Ukraine at the moment. Yeah. So, because obviously most VCs have been very hot on the dual use, maybe because also their investors are not so happy about the kind of defense defense stick. I mean, what do you think about that? Are we actually losing that game then because it's such a big focus on dual use? I think dual use is just irrelevant. Like we We need actual funding that goes against companies that really build products that the militaries truly need. And unfortunately, it's taken a couple of years for the capital providers to understand that.

14:00But I think it's getting in the right direction. Yeah. So do you invest yourself like as an angel into this kind of companies? Yes, I've actually been investing in quite a few defense funds. I've been doing some direct investments as well. But again, the industry is moving so quickly and I'm very concentrated on bolts. I'm by no means an expert there. Yeah, and I think it's nice because I did meet up with a few Swedish founders at the lovable one-year anniversary party and you were there as well. And you seem to be very well known by the Swedish founders. It has become much more of that kind of connection between, I mean, companies in Estonia and in Sweden, Finland and so on.

14:39Well, I think Estonia and Sweden tech histories go back since they both started, right? I mean, 25 years ago with Skype, with Niklas from Sweden and the engineers from Estonia. So I think there's a long running history between the two countries. And I think it's great. It continues today. There's a lot of investments and talents moving between the two countries. Is it also because you have similar investors and they all bring you together? I think that helps a lot, right? I mean, Krandum has been doing many investments in Estonia. I'm now on the board of Klarna and so on. So I think there's a lot of collaboration that keeps growing.

15:12Yeah. And I mean, obviously, you know, you were quite young when you founded Bolt. What was your kind of experience with, because we know that the Estonian VC capital at the time wasn't that matured? Well, I think actually there was almost zero European, Estonian VCs, and not to mention that many in Europe either. Exactly. So how did you manage? I mean, if you look at that, because obviously there's going to be, there's a lot of places now with a lot of early stage funds, but it's still hard for some people to actually raise that money. I mean, how did you cope? Well, 12 years ago, Europe was completely different and we really struggled.

15:46So we were able to raise the first 1 million angel funding from the region. But then the next round actually came from strategic investors. We had to raise money from German OEMs like Mercedes. We had to raise money from China. And then we started raising money actually from US. So we really But Lockheed Hill situation is completely different now. If you want to raise one, five, even 50 million in Europe, there's absolutely VCs here locally who can do that. Yeah. So, I mean, I think that's interesting because obviously sometimes people say that you don't want to just bring in like one strategic investor as a car company, for example, because then, you know, what are the other car companies going to say?

16:27How did you kind of think about that at the time? Did you? Well, obviously the preference for most companies is to take a neutral financial investor. And that's what I would do if I could. But when you're faced with a choice that there are no VCs in Europe who are willing to back the company and the only alternative is a strategic one, then you just take it and you manage it carefully. Yeah. I mean, now Bolt is one of those highly valued companies, private companies in Europe. You've obviously done something right. I mean, what would you say is like the kind of the key to your success from early days to like late days?

17:00Customer obsession is the number one thing. We just really deeply care about serving our customers with the best product. And many companies lose that over time, especially if you're a big US company operating around the globe. They get quite distracted. Europe necessarily isn't the top of the priority list for them, but we are a European company. We're based here. We see how the service is used here every day and we care about it a lot. And these small things compound. So if you're able to provide slightly better customer service, faster pickup times, slightly better prices, you get the flywheel working in our favor.

17:35And after a decade, it ends up with a massively different result. When was the most challenging time for you, would you say, at Bolt? It's been a roller coaster, honestly. I think in terms of business results, I think the first couple of years were obviously very tough. We had just a couple of months of runway always. We were growing quickly, but we were still tiny. and it was always a risk. How are we going to scale to meaningful size? But now the problems are different, right? I mean, the business is much bigger, more mature. We have a big organization, but you have different problems. We need to figure out what is the strategy for the next decade?

18:10How are we going to do the transition to self-driving cars? And so on. So the stakes get bigger and bigger. What is the most challenging within thinking about self-driving cars? Is it how the platform will actually talk to these cars? Well, I think it's going to be one of the biggest infrastructure deployment programs that we're going to see in Europe. Looking back over the last century, there almost hasn't been anything of the sorts. Because this will require tens of billions of euros of capital to acquire the cars, get the safety permits, insurance, build the depots where these cars are going to be maintained and cleaned and charged.

18:48It's a huge, huge investment that has to be taken on. and that's not going to be easy to execute. No. And we know that we have also had like lots of companies going bankrupt and so on in Europe. And I was just talking to Peter Carlson at the former Norfolk founder or CEO. And you're never too big to fail, right? So what is like, what would, I mean, this is terrible to think about maybe, but what would be the kind of the worst thing that could happen to Bolt, do you think? What do you do? I mean, do you think about that? I think every CEO needs to think about that all the time. I think only the paranoid survive.

19:26In our case, self-driving cars are, I think, the biggest threat and opportunity. So it's very clearly going to be the future. It's going to be a superior product with superhuman safety. It's going to be cheaper than driving your own car. It's going to be extremely convenient. But if you miss that wave and you don't have those products on the platform, then obviously customers are going to move on and they're going to be using other platforms that will offer them that product. So it's a transition that's existential for us to get right. Do you think there will be a lot of competitors coming into that kind of space?

19:57I actually think it's extremely hard to build a ride-hailing network nowadays. And there haven't been new entrants into this sector for 10 years. I think Bolt was the last ride-hailing company that got to meaningful scale all around the world. And people underestimate how easy or hard it is to get to this kind of level but i'm more thinking about the incumbents are going to be challenged by these new self-driving car companies that will build just extremely sophisticated software that is needed to reach the safety threshold and that is something we need to get right and partner with the right companies yeah i was thinking like because there was some time ago when you did your first kind of acquisition uh in a the danish cab company vigo and i mean denmark is an interesting kind of country because has been Bolt was thrown out and this and that and then they came back and also did an acquisition I mean how how is that kind of on a very local scale how how does this work out how did you make the decision to make this kind of acquisition and what were you thinking it's very unique for us because we've not acquired any companies over our 12-year journey really and the reason for it is that we're very proud of the team and technology we built and we always see it is more effective for us to expand organically with our own teams rather than acquire somebody.

21:14And the only exception would be a market that has extremely unique regulation. And that's the case in Denmark, which is that it has arguably one of the worst taxi regulations in the world. It's so strict, it's almost impossible for new drivers to enter the space and get access to these taxi licenses. And they can't even work with apps properly. So it's all over-regulated. And that's the reason our normal playbook didn't work and we have to go there with a different approach and acquire a company. If the market was opened up and the regulation would be modernized, as it is in Sweden or Finland or most other parts of the world, then we could have just entered organically.

21:51Yeah. Was this, was your acquisition, was it actually, did the kind of the process speed up because of Uber's re-entry into the country? Not necessarily. Again, we look at every decision we do, whether it's actually long-term in the best interests of the customers in the business. And whether competitors are a couple of months ahead or behind us doesn't really change the big picture five years from then. Okay, great. I also have a couple of quickfire questions. What's your best piece of advice for a founder early on the startup journey when dealing with advisors and VCs? My advice is to get good advisors, but still trust your own gut.

22:33I think founders typically fall into one of the two extremes. So either they take advisors and they trust them too much, or they go the other extreme, which is they don't listen to advisors at all and only make their own decisions, which often ends up in a lot of mistakes. I think the right way is to have a good hybrid, where you find great advisors, you debate hard problems with them, but at the end of the day, you're the CEO. You have to make the decision that you believe in, and you shouldn't do something just because an advisor told you to do it. No. You also have your brother working very closely to you at Bolt.

23:04How does that work out in the family? So my brother is 15 years older than I am. So we have a bit of an unusual sibling dynamic in that sense. But he was very clear from the get-go that he's there to help me any way I need to build a business. But I'm the CEO, I'm in charge, and he's going to trust my decisions. and we started with that healthy, clear dynamic from the get-go. So it's never caused any issues for us. So do you talk a lot of business when you see each other for Christmas and so on? No, we have strict limits. So when we meet up with the family, then it's family time only. Okay. Do you have like three amazing early stage founders on your radar?

23:42Oh, hard to pick anybody out really because what I see is that there's so many amazing new AI and defense companies popping up in Europe. So I wouldn't want to give any favors to three specific ones. But is that the space you think is the hottest right now? Both AI and defense, I think, are the hottest indeed. I think you share that with almost everyone else in Europe right now. But those are the facts, right? So when you just look at the funding that goes into these two spaces, I think it dwarfs everything else. Yeah. And if you could swap lives with any other CEO for a day, who would it be and why?

24:15I'd like to see a day in the life of SpaceX. I've always been fascinated by robotics, hard scientific problems, rockets, and so on. And it's one of the leading companies, obviously, we have in the world. So it would be fascinating to understand how the company operates every day. Okay, but you wouldn't want to swap it with Elon Musk, for example, but then who founded it. It's hard to tell nowadays which company he's the CEO of. It's too many. Exactly. Thank you so much, Marcus, for joining me today. Thank you. It was a pleasure. That's all we have time for today. so please rate, review and share this podcast if you enjoyed it.