- This will be a fun race to watch…
- Every restaurant in the world will adopt this tech…
- We’ve got a recipe for success…
The next day one investment that I’d like to share is a company that is deep in the weeds of fintech (financial technology). It’s an incredible company whose tech I’d bet all of us have used, but very few of us have ever heard of…
Bolt Financial – usually just referred to as Bolt.
I invested in the company back in 2016 during its very first Series A venture capital (VC) round, which took place at a $54 million valuation.
Bolt was a tech-driven software company at the time entirely focused on the e-commerce market. And its product was simple – one-click shopping.
It sounds easy, and it certainly is for the consumers. But the tech is hard.
Bolt’s value to merchants who partner with it is that its tech makes it easy to enable online payments on any website or software application. Bolt also integrated its tech with other software companies that serve the world of e-commerce, supporting functions like taxing, shipping, financing, payments, and other back-office functions that every e-commerce business relies on.
After any consumer uses Bolt once, their payment, phone, and address details are on file. So the next time they make a purchase, it really is just one-click. It’s awesome. I actually use it all the time.
And for merchants, the single largest problem in e-commerce is that as much as 70% of e-commerce carts are left abandoned without purchase.
Bolt helps solve that problem. Using one-click technology increases online ordering by more than 60% and therefore dramatically reduces cart abandonment. Everyone wins.
At the time that I invested, Bolt had a competitor that had already proven to be valuable in the space – Shopify – which went public in 2015. I knew that Bolt was just as good as Shopify if not better. It was an easy investment decision.
Fast forward to today… Bolt Financial raised $393 million at a $6 billion valuation a few months ago. That puts me up 111X on my original investment – that’s 11,000% so far.
And as Bolt is now in hypergrowth mode, it is already in discussions to raise $777 million at a valuation as high as $11 billion. Assuming that happens, I’ll be looking at a 203X return (20,200%).
But it could be much better.
Today, Shopify is trading at a $200 billion valuation. It is one of the most valuable tech companies in the world.
Yet after years of investment, Bolt is still a better platform. It has added a wide range of features that make its tech even more attractive to merchants.
So what would happen if Bolt makes it to an initial public offering (IPO) and a $100 billion valuation – half of where Shopify trades? That would result in a 1,852X return – more than a 185,000% return on investment in just a matter of years – not a lifetime.
That is the power of getting in at day one.
Another reason why I like this example is that it highlights one of my key investment strategies that I use as an angel investor. I love investing in companies whose technology can abstract away complexity.
That may sound complex. And to do it well it is. But any company that can make something hard very easy for a wide range of customers won’t have a difficult time selling its solutions.
A great example of this is Twilio. I first recommended Twilio back in May of 2017 in Exponential Tech Investor at $24 a share. I loved Twilio because it tackled the complexity of communications and messaging for anyone who had a software application.
Basically, it built a full-stack communications software platform that was integrated with wireless carriers around the world. And it could simply integrate with a software application, like Uber, by implementing just a few lines of software code. Just plop in the software, and you have a communications platform to engage with customers. It is like an “easy” button.
By integrating with Twilio, you’re done, and you can focus on your core business rather than spending an inordinate amount of time and money trying to do it all in-house.
Since that initial recommendation, Twilio is now up almost 1,200%. That’s a fantastic return, but it is only a fraction of what it would have been getting in on day one.
That’s when investors stand to gain the most from a promising early stage company. And it’s exactly the kind of opportunity I’m excited to share with you at my Day One Summit tonight at 8 P.M. ET.
We’re going deep, and I’m swinging harder than I ever have before on any other project. I believe that, with the help of my subscribers, we’re going to be part of a revolution in day one capital raises.
We’re going to be the capital responsible for empowering great businesses and entrepreneurs to become the next Bolt. And we’ll be richly rewarded for doing so. So make sure you RSVP for my special event tonight at 8 P.M. ET.
I hope to see you in just a few hours…
Amazon’s Project Kuiper strikes a deal…
Amazon just made an interesting announcement regarding Project Kuiper. The company is partnering with Verizon to finally get the project off the ground.
As a reminder, Project Kuiper is Amazon’s satellite internet service. The goal is to launch about 3,200 satellites to provide internet access to underserved areas around the world.
Kuiper is Bezos’ answer to Elon Musk’s SpaceX Starlink constellation. But just as Blue Origin is way behind SpaceX on launch capabilities, Kuiper is way behind Starlink.
SpaceX plans to launch 42,000 satellites to form the Starlink network. And it already has nearly 2,000 satellites in orbit. Project Kuiper, on the other hand, has only managed to get a single test satellite into orbit.
And that’s where this deal with Verizon comes into play.
Verizon will pay for satellite capacity and bandwidth over the Project Kuiper network. Basically, the wireless giant will be the project’s anchor customer. This will help make Project Kuiper a self-funding venture.
In return, Verizon will use the project’s satellite constellation as a cellular backhaul over its network. This will enable it to provide 4G and 5G access in remote areas that currently lack coverage.
And more areas are lacking advanced wireless coverage than most people realize…
When we think about wireless cell towers, we often assume that every aspect of communication is wireless. But that’s not the case.
Instead, each tower needs to be connected to a fiber network to provide fast speeds. So when a cell signal hits the tower, it drops down to the fiber network very quickly. That’s what keeps latency low and performance high.
Connecting cell towers to fiber networks like this is no problem in heavily populated areas. But it just doesn’t make financial sense to spend big money running fiber to remote areas.
That’s why Verizon is interested in Project Kuiper. Instead of running fiber, Verizon can connect its remote towers to the satellite network. That will enable fast 4G and potentially even 5G coverage in underserved areas.
Of course, this raises a question. Given that SpaceX has nearly 2,000 satellites up right now and Project Kuiper has just a single test satellite, why wouldn’t Verizon partner with SpaceX instead?
I worked directly with large wireless companies for much of my career as a high-tech executive, and I can say with certainty that they only do deals after they have seen a technology in action. So I suspect Verizon did seek a partnership with SpaceX. The answer must have been “no.”
If I’m right about that, it signals that SpaceX is serious about providing a transparent, censorship-free service to its end users. The company is not willing to give up any control over the network whatsoever.
This is something I absolutely applaud Elon Musk and SpaceX for doing. Given all the censorship that “Big Tech” has perpetrated over the last 18 months, it’s refreshing to know that there are companies out there still working to provide open access to all.
This battle of egos has been fun to watch. And it will be interesting to see how both satellite constellations play out. I think I know how it will end and who will “win.”
And we can expect Starlink to spin out into its own IPO sometime within the next couple of years, which will be a major liquidity event for SpaceX shareholders.
McDonald’s just made a shrewd move…
Longtime readers may remember when McDonald’s acquired early stage artificial intelligence (AI) company Apprente.
Apprente developed an AI-powered voice system that was designed specifically to take orders at drive-through locations.
And what made this AI so impressive is that it was trained on multiple languages and various dialects within each language. That gave it the ability to deal with pretty much any customer.
Personally, I was disappointed when McDonald’s made this acquisition. That’s because I invested in Apprente’s seed round in August 2017. I got in at a $14 million valuation, and I knew Apprente had the potential to become a multibillion-dollar company if it could license its tech to restaurants on a global scale.
However, McDonald’s put a stop to that idea. It bought Apprente for $150 million in order to take the tech off the market. It wanted the AI all for itself.
I ended up generating just over a 10X return on my investment. That’s not bad at all, but it could have been much, much bigger.
That said, McDonald’s clearly knew what it was doing. It just struck a brilliant partnership with IBM. McDonald’s has agreed to sell off the team that it acquired at Apprente to IBM.
IBM will continue to develop the AI, and it will license it right back to McDonald’s. And IBM’s expertise and scale will help McDonald’s roll the technology out to its restaurants around the world.
So this is a great business arrangement for both parties. McDonald’s took a technology off the market that it knew might be leveraged by its competitors. It developed it in-house, proved that it worked, and is now outsourcing the management of the technology to a service company – IBM – which will allow McDonald’s to maintain the exclusive use of the technology.
This will result in incredible efficiency gains as the AI is deployed across McDonald’s drive-through windows. Labor costs will go down, and customer service very well may improve as the AI gets better and better.
There’s no doubt in my mind – this is the future of all order-taking. It will start at McDonald’s. But every restaurant in the world will ultimately adopt this technology.
And since McDonald’s is likely to maintain an exclusive license on Apprente’s tech, I’ll be watching closely for new startups that can bring similar AIs to other restaurants around the globe.
That would make a fantastic day one investment for my new service that’s launching tonight…
DeFi cannot be stopped…
We’ll wrap up today with an incredible lens on what’s happened in the decentralized finance (DeFi) market. Here’s a beautiful chart:
This chart shows how much value is locked in DeFi projects globally in terms of U.S. dollars going back to 2017.
As a reminder, DeFi applications bring traditional finance functions to the blockchain. These are functions like banking, lending, insurance, and asset exchanges.
The difference here is that putting these applications on a blockchain cuts out third-party institutions. This reduces costs and the potential for corruption while making financial services available to a much wider customer base.
And as we can see, the DeFi space has absolutely exploded over the last 18 months or so.
If we go back to the start of 2020, there was about $10 billion locked in DeFi contracts. Fast forward to today, and that number has skyrocketed to $100 billion. This is a 10X jump in less than two years. That’s incredible.
And this is precisely why the U.S. government has been clamping down on DeFi regulations recently.
Simply put, this market is completely disrupting the traditional financial services industry. And that makes DeFi a major threat to both the banks and the regulators.
But try as they might to stifle it, I can say with confidence that DeFi cannot be stopped. The genie is out of the bottle.
That’s because DeFi projects can provide financial services faster and at a fraction of the historical cost.
And most importantly, DeFi can do this with transparency and open access to all. That’s a stark contrast to the traditional model that caters to high-net-worth individuals, hedge funds, and other institutional money.
What’s more, DeFi startups are innovating at an amazing pace. By comparison, the innovation in the traditional financial services space feels glacial.
So this chart is not a fluke. DeFi can do it faster, cheaper, and simpler. That’s always a recipe for success.
And I predict that we’ll see the value locked in DeFi go up 10X again over the next 18 months. That would take the chart up to $1 trillion.
Editor, The Bleeding Edge
P.S. There are only a few hours left before the Day One Summit begins… The clock is ticking. If you haven’t yet, please go here to claim your spot to attend. If you’ve ever wondered about how to achieve 100X gains or more through private investing, then tonight’s your night.
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