(Bloomberg) -- Ride-hailing company Bolt Technology OU is seeking credit support from the Estonian government after a switch to quarantine-friendly services failed to sufficiently improve its finances and banks turned down requests for loans.
The service formerly known as Taxify, a rival to Uber Technologies Inc., is asking for 50 million euros ($54 million) in loans or public credit guarantees after commercial lenders have refused to take part under existing state guarantees.
The Tallinn-based company needs at least 15 million euros per month starting from April after losing 85% of revenue, two Estonian newspapers reported Thursday, citing a letter from Bolt founders and main owners Markus and Martin Villig. Bolt has asked the government to adjust the terms of its planned stimulus measures to help startups deal with the crisis, spokesman Jaan Lasmanov said, without confirming the details of the loan request.
“While the start of 2020 was our best on record, the present crisis is unprecedented and its effect on our core business has been significant as people are following the movement restrictions imposed by the governments,” Lasmanov said.
Bolt cut operating costs and expedited the opening of new services, including the launch of home food delivery and a new courier service. These steps “have helped us adjust to the situation but we need to consider all measures to successfully exit the crisis,” Lasmanov said.
Uber Technologies Inc. is also expanding a program for businesses to order food delivery to their employees’ homes in response to surging demand during the coronavirus pandemic.
Banks have turned down requests from Bolt to lend despite a guarantee from state fund KredEx because they see the safety net provided by the existing terms as insufficient, Aripaev and Postimees newspapers said.
Bolt’s Lasmanov cited stimulus packages targeted at startups by France and Germany as proof that “the startup sector needs a specific approach.” The company, which was valued at over $1 billion last year, signed a 50 million-euro venture debt deal with the European Investment Bank in January. It was profitable in two-thirds of its markets at the end of 2019, according to Lasmanov.
©2020 Bloomberg L.P.