Martin Villig, co-founder of taxi-hailing app firm Bolt, one of two Estonian "unicorn" firms, and the only one headquartered in the country, has issued a statement in the light of the ongoing coronavirus pandemic, its effects on the economy and news that the company had applied for around €50 million in relief from the Estonian government.
Lockdowns across Europe and the world have had a major impact on people and businesses. This has undoubtedly saved lives. The effects of the current situation on the economy are also unprecedented, as they affect small businesses, large corporations and start-ups all in the same way, with Bolt no exception to this rule.
The EU has acknowledged the need for member states to support local businesses with extraordinary measures, and relaxed regulations to allow for this. Estonia has been taking steps to evaluate businesses' requirements to help them through the crisis. Hundreds and thousands of companies will hopefully benefit from these measures.
Start-ups must be able to access relief
When we talk about relief measures, we are not talking about cash coming out of the taxpayer's wallet. The government has encouraged businesses to approach banks, and has expressed its support for guarantee loan applications via KredEx, a government foundation set up for this express purpose.
We at Bolt have been pointing out that start-ups would not be covered under today's loan guarantees. To put it into context, Estonian start-ups employ 1 percent of the workforce, but they are responsible for 3 percent of the country's GDP.
The entire start-up sector has been growing 30 percent annually for the past five years. Start-ups have brought in foreign investment in excess of €300 million over the past year, the majority of which has been paid out as salaries to Estonian tech employees.
For example, Bolt paid employment taxes to the amount of €7.7 million in 2019, and €3 million in the first quarter of 2020.
This is why we should make sure that relief can also be accessed by start-ups.
Bolt has been quick to respond to the crisis
Bolt has more than 30 million people using its services in 35 countries. A million drivers depend on the income that they earn on our platform. Once the crisis subsides, they will want to return to their normal lives. Thus, Bolt has in no way pinned its hopes on relief measures alone.
We have taken decisive steps to be able to exit the crisis successfully. This includes the reduction of salaries and other fixed costs, as well as opening new services at a rapid pace. Within the first couple of weeks of the crisis, Bolt's delivery service made food and other essentials available within an hour of placing the order across all the bigger towns in Estonia.
We continue to be an Estonian company
Bolt Technology OÜ is an international business registered in Estonia, paying taxes locally and employing more than 500 people here. All of Bolt's international revenues go via the Estonian business entity, and help to increase exports for the country.
European Union directions are for companies to seek relief from countries which are their main location of operation, which is why we have turned to the Estonian government in order to make loan guarantees more available for start-ups.
We believe that Bolt will weather the crisis and emerge stronger. We hope the same for other start-ups, which have contributed to making Estonia noted as a tech hub around the world. We hope that the Estonian government will be able to, and want to, play a role in that.
Bolt provides a food ordering app in addition to its taxi-hailing app. The company also offers electric scooter rental in Tallinn during summer months, and operates a couriering service. It employs around 1,500 people worldwide.
Bolt had faced criticism from Riigikogu finance committee chair Aivar Kokk (Isamaa), who said that before the company applied for state aid, it ought to check that it had contributed its tax bill to the Estonian state in full.
Editor: Andrew Whyte