E-Commerce Startup Bolt Snags $68M to Grow Checkout Biz | E-Commerce
E-commerce checkout platform vendor Bolt has raised US$68 million in a Series B funding round co-led by Activant Capital and Tribe Capital, bringing the total amount raised so far to $90M.
Individuals in the retail field also kicked in money. They include Benny Joseph, head of engineering at environmentally friendly footwear manufacturer Allbirds; Jonathan Tam, Revolve Clothing’s director of operations; Dave Heath, CEO of sock maker Bombas; and Melissa Mash, CEO of handbag maker Dagne Dover.
Bolt has earmarked the capital for the following uses:
- Increase its engineering team, which now totals 20 people;
- Invest in additional enterprise functionality for larger retailers;
- Partner with best-in-breed e-commerce tools, shopping carts and payments platforms;
- Build advanced features, functionality, and optimizations around the shopping experience; and
- Expand global functionality.
Bolt launched publicly in January 2018. It claims to have reached an annualized payment processing volume of more than $1 billion, conducted more than 1.5 million transactions through its platform, and helped customers realize more than $25M in new revenue.
The Bolt team grew from 10 people working out of a loft in San Francisco to more than 125 employees across three offices.
Upwards of 100 online merchants reportedly
had adopted Bolt systems as of January 2018, including Invicta, Watches.com, Brian Gavin Diamonds, and HUF Worldwide.
Everything Under One Roof
Bolt’s platform combines checkout, payments and fraud detection to provide a better buying experience for shoppers and maximize conversions for retailers, according to the company.
Conversion is crucial. Only 48 percent of etailers
converted visitors to purchasers in Q2 2018. The study covered 673 merchants collectively accounting for 73 percent of e-commerce sales in the United States.
Overall, the average
cart abandonment rate is nearly 68 percent. That translates to about $4.6 trillion worth of merchandise over a year.
Bolt claims its checkout page is up to 10 times faster than the competition because it reportedly uses a preprocessing technique that loads elements and code in seconds.
“Speed always matters,” observed Ray Wang, senior analyst at Constellation Research. “You want to make sure clients can quickly make impulse purchases and accelerate their ability to close out a deal.”
Bolt probably “connects with Google or Facebook or other online accounts that already have that information stored, with permission, so the user doesn’t have to type it all in again,” suggested Daniel Elman, research analyst at Nucleus Research.
Its platform eliminates the need for consumers to enter a billing address. Its mobile page is no-scroll and above-the-fold. Shoppers can choose to sign up for an account after they have entered their payment information instead of before doing so as is the norm.
Still, consumers would at some point need to set up an account with Bolt that contains [billing and shipping] information, said Michael Jude, program manager at Stratecast/Frost & Sullivan.
“Think Paypal. You don’t need to enter anything except your PayPal account ID and password, and it charges your credit card and provides the billing and shipping information to the merchant,” he told the E-Commerce Times.
Checkout and payment processing tools are crucial for e-commerce SMBs. However, they are “very expensive” to invest in, Constellation’s Wang told the E-Commerce Times.
Bolt’s payments processing back end reportedly is fully compliant with PCI level-1 rules, and the platform has built-in A/B testing features that let developers push improvements continuously.
Online retailers will lose $130 billion worldwide in card-not-present fraud over the next five years, Juniper Research has predicted.
Fighting fraud doesn’t come cheap.
“We estimate 17 to 19 cents on the dollar is spent on combating fraud in luxury items and gift cards,” Wang said. Overall, retailers spend 11 to 15 cents on the dollar combating fraud.
To fight fraud, Bolt’s platform reportedly captures mouse pointer locations, typing speeds and accuracies, copying and pasting behaviors, and other browsing, cart and checkout data. Its machine learning algorithms analyze more than 200 variables in each transaction, and a dedicated team reviews every declined transaction.
Customers flagged as potentially malicious can provide additional information to get their orders approved.
“It seems like the fraud prevention measures are currently effective, but, like anything else regarding cybersecurity, they’ll be useful until some malicious actor decides to work around them,” Nucleus Research’s Elman told the E-Commerce Times.
“If the NSA can be hacked, a company like Bolt doesn’t stand much of a chance against determined bad actors,” he said.
Bolt covers 100 percent of fraudulent chargebacks.
That “could quickly become table stakes to compete in the space.” Elman said. “With the growing prevalence of card-not-present fraud, customers are going to be wary of the threat and will choose the vendors that best offer protections.”
Vesta also offers 100 percent chargeback protection.
“You have to be good to cover 100 percent of fraud,” Wang said. “Only a few folks can do this. Vesta is a good alternative, but they need to invest in expanding their network and reach.”