In the high-stakes game of venture capital, bold bets often make headlines—but few are as intriguing as The London Fund’s $450 million gamble on Bolt, a checkout startup with a rocky past. At the center of this ambitious effort is Ashesh Shah, the founder and CEO of The London Fund, a UK-based venture firm with over $1 billion in assets under management.
Shah’s firm is leading this major investment, and despite Bolt’s troubled past, he remains optimistic about the company’s future. His recent interview with TechCrunch sheds light on why he believes this deal could be a game-changer.
Bolt is a startup that simplifies the online shopping experience by offering a one-click checkout service. It aims to make the process of purchasing products online faster and more seamless, similar to how Amazon’s famous “Buy Now” button works.
However, Bolt has faced its share of controversies, ranging from legal disputes to leadership changes, making it a risky bet in the eyes of many investors.
The London Fund, is a venture capital firm with a knack for identifying companies with hidden potential.
Founded in 2003, the firm has built a reputation for investing in what Shah describes as “Ferraris with flat tires”—companies that may appear flawed on the surface but have the potential to become market leaders.
The firm’s ability to spot these opportunities has earned it over $1 billion in assets, positioning it as a significant player in the venture capital space.
The deal: a $450 million bet with a twist
The proposed investment in Bolt is not your typical venture capital deal. While $450 million is the headline figure, The London Fund plans to contribute $250 million of that amount in the form of marketing services, not cash. This approach is unconventional but strategic.
Shah explains that The London Fund provides “tactical capital,” meaning they deploy resources that have a direct impact on the companies they invest in.
Instead of just handing over cash, they offer marketing credits that can be used to boost the visibility and growth of their portfolio companies.
In Bolt’s case, these marketing services include leveraging the firm’s network of influencers and media partners to promote Bolt’s products.
Shah compares this to a high-profile deal between OpenAI and Microsoft, where Microsoft’s $10 billion investment included significant computing resources, not just money.
By offering marketing services instead of cash, The London Fund can closely monitor how its resources are being used, ensuring maximum impact.
One of the more complex aspects of this deal is the inclusion of pay-to-play and cramdown provisions in the term sheet.
In simple terms, these are mechanisms designed to ensure that existing shareholders continue to invest in the company. If they don’t, they risk seeing their shares diluted or losing their preferential rights.
Pay-to-play provisions are common in venture capital when a company is in a challenging situation and needs more capital to survive.
These provisions require existing investors to participate in new funding rounds or face penalties.
Cramdown provisions, on the other hand, can force existing shareholders to accept less favorable terms, potentially reducing the value of their shares.
Shah is confident that these provisions will be accepted by Bolt’s current shareholders.
He argues that the deal offers a clear path to significant returns, but it requires everyone involved to be fully committed to the company’s future.
A key part of this deal is the return of Ryan Breslow, Bolt’s founder, as CEO. Breslow is known for his visionary approach to e-commerce and his ability to grow Bolt rapidly in its early years.
However, his leadership has not been without controversy, and his return to the helm is seen as both a risky move and a necessary one.
Shah believes that Breslow’s return is crucial for Bolt’s success. He compares Breslow’s vision to that of the founders of other successful tech companies like Shopify and Revolut. For Bolt to continue growing and to achieve its potential, Shah argues, it needs the vision and leadership that only Breslow can provide.
The Stakes: high risk, high reward
Every investment is a gamble, and this deal is no exception.
Bolt’s past controversies and the complex terms of the investment make it a risky bet. However, Shah and The London Fund are betting that Bolt’s potential outweighs these risks.
If the deal goes through, it could provide a significant return for all involved. But it will require all stakeholders, from The London Fund to Bolt’s existing shareholders, to be fully committed to the company’s future.
As Shah puts it, “We only do well if there’s an exit,” meaning The London Fund’s success is tied directly to Bolt’s ability to succeed and eventually be sold or go public.
