Swedish retail giant IKEA is investing in a rapidly growing large-goods delivery and fulfilment service from Toronto that is set to expand in the U.S.
On Monday, Bolt Logistics is announcing it has raised $115-million to build on one of the most rapid expansions of any Canadian startup this year. The 4-year-old company has increased sales more than four-fold in 2021, surpassing $60-million in revenue on an annualized basis. Its 500-plus merchant customers in Toronto, Montreal, Vancouver and Ottawa include Rove Concepts, Structube, Spinco and IKEA.
Bolt has also expanded its ranks more than six-fold this year, to 950 staff, bringing on seasoned veterans including former Indigo operations senior vice-president Jonathan Rosemberg as chief operating officer; sales vice-president Kristy Bates, former head of sales for Uber Eats Canada; and chief people officer Adam Long, who led human resources for Amazon Canada.
Now Bolt is looking for about 400,000 square feet of space in Los Angeles and Houston by early 2022 to start serving the United States – on top of its 500,000 square feet in Canada.
Bolt is capitalizing on three trends, said Bolt financier and director Michael Hyatt: escalating e-commerce sales, increasing digitization of traditional sectors, and a push by businesses to decarbonize operations. “Bolt is Logistics 2.0, with combined technology, truck electrification and a higher standard of customer service,” Mr. Hyatt said. “If old-school logistics companies were to start today they’d all wish they were [built like] Bolt.”
Bolt has built its own software to manage the customer-facing part of its business – enabling retailers and consumers to track deliveries online – and run back-end operations to manage its business and plug into merchant e-commerce software. It handles deliveries in-house with 100 electric vehicles and has a goal to be carbon-negative by 2023. “One of our team members has either written code, ridden the truck or is doing the pickup – it’s all us,” said Bolt’s 25-year-old chief executive officer and co-founder Mark Ang.
And it has focused on bringing “white glove” delivery and set-up service to an underserviced niche – heavy and hard-to-handle items such as couches, treadmills and mattresses. It also provides merchants “pick-and-pack” service to fulfil online orders. The business is adding one to two merchants a day.
“As companies move online they’re losing the touchpoint they would typically foster in the shop,” Mr. Ang said. “When your last touchpoint is a sweaty, smelly delivery person that’s not a good look.”
Bolt’s drivers, he said, wear uniforms and are hygienic and friendly, delivering “a fully branded experience that you can rely on” with 98-per-cent-plus on-time delivery.
That helped win IKEA as a client for last-mile deliveries in big Canadian cities, and as an investor, said Krister Mattsson, managing director of IKEA parent Ingka Holding BV’s investment arm. “This financing showcases the confidence the market has in [Bolt’s] position in Canada and their ambitions … as a technology-led logistics company” with ambitious sustainability goals, Mr. Mattsson said by e-mail.
“Bolt has proven to be a good partner for IKEA Canada and has delivered high customer satisfaction tied to our services. We are keen to be adding Bolt ... to our portfolio.”
Other equity financiers include lead investor Yaletown Partners of Vancouver, past backers Whitecap Ventures, MIG, Intact Ventures and Mr. Hyatt, plus Northleaf Capital Partners, Kensington Capital Partners and Bank of Montreal. They put up a combined $75-million. Silicon Valley is providing $40-million in debt. The deal comes months after Bolt raised $20-million in venture capital.
Bolt started as Second Closet Inc. (still its official name), a self-storage and logistics startup inspired by Mr. Ang’s experiences looking for a place to affordably store belongings when he lived in a tiny condo. He and co-founder Heindrik Bernabe, the chief technology officer, built a business that would pick up and store a range of items for people, initially targeting University of Toronto students.
Second Closet, running on software built in-house, quickly expanded to Canada’s four largest cities and reached 15,000 customers, raising $16-million in venture capital prior to 2021. Mr. Ang said much of the demand was prompted “by death, downsizing and divorce, three things we didn’t want to drive more of. It was a good business, but it was not going to be our long-term focus.”
Instead, his team noticed much of their business came from e-commerce retailers that were storing inventory and using Second Closet as a third-party logistics provider. “We found there was a massive chasm in the market for people that handled complex logistics for big and bulky products,” Mr. Ang said. The idea for Bolt was born, and this year the company rebranded and began winding down the Second Closet business.
Bolt now handles 7,500-plus shipments and deliveries daily. “This is one of the fastest-growing areas for e-commerce in an area with the least amount of integrated infrastructure, and Bolt has that spot marked out well in Canada,” said Yaletown partner Eric Bukovinsky. “It’s what we’re looking to build out in the U.S. as well.”
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