Bolt Financial has built a vast network of consumer identity information for its merchant clients, and now its new CEO aims to let them better leverage that shopper data.

Justin Grooms, who was promoted to CEO in March on an interim basis, following the exit of Maju Kuruvilla, and permanently last month, isn’t so much introducing a new strategy as he is advancing the company’s legacy strategy, he said in an interview last Friday.

When merchants integrate Bolt’s software with their payments processing, they can tailor their pitch to individual consumers by tapping the Bolt network, which has accumulated data on some 80 million shoppers via retailers and other sellers, Grooms explained. Now, Bolt is working with its merchant clients to take the next step in using that information. 

“They have all the Bolt infrastructure installed,” Grooms says of Bolt’s merchant clients. “Now, merchants are saying, you recognize a lot of my shoppers, can you recognize them earlier — can you help me to provide additional value to them?”

Grooms, who has worked at Bolt for about five years in various positions, is the company’s third CEO in as many years. Kuruvilla exited the top post in March, about two years after the company’s founder, Ryan Breslow left the CEO post in January 2022, following an attack on payments fintech Stripe and startup accelerator Y Combinator. Breslow remains chairman of the company.

Under Groom’s leadership, Bolt is trying to help merchants recognize their customers earlier in the transaction, perhaps by way of a shopper’s email address, so merchants can better direct shoppers. 

“We can kind of start curating the shopping experience upfront,” said Grooms, who is based in the Washington, D.C. area and leads a largely remote workforce, though the company is headquartered in San Francisco.

In recent months, Bolt and its merchant clients have been brainstorming ways in which they can leverage the earlier recognition of shoppers, with that extension likely showing up “in the next quarter or two,” Grooms said. For merchants and consumers, it won’t feel odd because they’ve been experiencing this type of service from an e-commerce giant in the market.

“It's actually not a big leap, because we're all used to this with Amazon,” Grooms said, noting Amazon may present different homepages to different shoppers. 

Smaller merchants may have wanted the same capability, but they haven’t had enough scale to attain that level of customer recognition. With Bolt’s network, its clients will be able to recognize about half their shoppers earlier so “now it makes sense for their marketing teams to start investing a little bit and seeing a real return,” Grooms argued.

He contends that Bolt has the largest API-based network of opt-in shopper data in the U.S. As any shopper’s account information is upgraded on one of Bolt’s merchant client’s sites, whether that’s updating their shipping address or adding their payment information, all the merchants in Bolt’s network benefit from that one-time update, he explained. 

A spokesperson for the San Francisco-based company declined to provide Bolt’s annual revenue or to say whether the company is profitable. The spokesperson also declined to provide Bolt’s employee headcount. The company has repeatedly cut its workforce in recent years, including about a third of employees in December, according to a report from tech trade publication The Information.

As for the privately-held company raising more capital, the company said this in an emailed statement: “We’re always looking at the market and open to strategic conversations with investors that advance our mission.”

The company spokesperson declined to name current investors. In the past, Bolt raised money from a list of blue-chip names, including asset management behemoth BlackRock and PayPal cofounder Peter Thiel’s Founders Fund, but the latter no longer shows Bolt as a part of its portfolio. Two other investment firms, Axevil Capital and Northstar, still show Bolt as being a part of their investment portfolios

Bolt’s offering is not a white-label service, but rather a light gray offering, Grooms says. The company doesn’t hide its brand, but it also doesn’t tout it in a transaction, he explains. That’s one way in which it’s different from PayPal, which makes its button a prominent payment option on a merchant’s site. Bolt is also different from PayPal in that it doesn’t push payments processing services, though it can step into that role if a merchant wants that as well, he said.

“We decided early on that we were going to bet on the merchant’s brand — that we were going to kind of be all-in on [the merchant’s] brand,” Grooms said. “The merchant knows that we're not really there to just service ourselves, or just service our relationship, that we need their brand and their sales to be successful for us to grow.”

Shortly after Breslow stepped down from the CEO post, a client sued the company in March 2022. The brand licensing and marketing company Authentic Brands Group alleged Bolt “utterly failed” to deliver on its technology promises, which resulted in lost sales for its fashion brands, which include Forever 21, Nautica, Reebok and Lucky Brand, among others. That lawsuit was settled a few months later in July of that year.

Today, Bolt’s clients include online fashion retailer Revolve Group, clothing company Saks Off 5th as well as mattress-seller Casper Sleep.

Bolt’s network of consumer data bolsters aspects of shopper security too. The company only uses biometric information, such as thumbprints or facial recognition, or alternatively it allows a consumer to get a one-time passcode sent to their digital device for a transaction. The company has completely done away with passwords, Grooms said.

“Passwords cause a lot of frustration for good actors too,” Grooms explained.

But Bolt’s business isn’t so much about providing additional security or other features to merchants, but rather the central mission is in enabling merchants to boost sales. The merchants pay Bolt a fee that is a fraction of every sale they make that taps the Bolt network. 

The amount of that fraction depends on the payments volume for each merchant, but “it’s significantly less than 1%” of a transaction, and typically less than half a percent for most large merchants, Grooms said.

“We play a scale game,” Grooms explained. “We're very much betting on expansion. We're very much betting on our installed base growing.

By Lynne Marek on July 15, 2024
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