Finance minister: State should not provide Bolt with direct support

Bolt electric scooters parked in front of Tallinn Bus Station.
Bolt electric scooters parked in front of Tallinn Bus Station. Source: Aili Vahtla/ERR

The state should not support debt-laden sharing economy enterprises that generate little tax revenue to the state, Minister of Finance Martin Helme wrote on social media on Monday, referring to the Estonian ride-hailing, electric scooter and delivery service Bolt.

Bolt founders Bolt Martin and Markus Villig have sent a letter to the government requesting for Kredex to provide them with an extraordinary direct loan of €50 million or a fixed-guarantee for a bank loan equaling 90-100 percent of the full loan amount. Currently, the maximum loan amount from Kredex is €5 million. 

Helme (EKRE) wrote on Facebook: "The government has said that we will not allow for economically important strategic businesses to be ruined. If needed, we will supplement measures by Kredex with direct support. What must be understood, however, is that we have certain objective criteria on which we base our decisions.

"There are two main things --firstly, the [company's] impact on Estonia's economy and more specifically employment rate, and secondly, its importance from the perspective of the functioning of the society. To put it simply - what matters is whether or not they employ a lot of people, generate sufficient added value end exports, and pay a considerable amount of tax."

The minister noted that the company's role in ensuring a functional society is also a determining factor, and cited transport, energy, communications and food production as examples.

"A debt-laden sharing economy app, which is registered in Latvia, pays little taxes and has no fixed assets meets neither of these criteria. I think this case is closed," Helme said.

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.

Statement from Bolt founder Martin Villig

Bolt sent a statement to ERR News from founder Martin Villig rebutting Helme's claims.

In the statement, Villig said: "To our knowledge, the analysis leading to the decision-making process is more thorough than this Facebook post. 

"Bolt is an Estonian company through and through, our headquarters are located in Estonia. The Financial Times also correctly named us an Estonian company, according to which Bolt was in the top three of the fastest-growing companies in Europe last year.

"Bolt Technology OÜ paid €8 million in labor taxes in 2019 and approximately €3 million in the first quarter of 2020. This makes us one of the largest payers of labor tax in Estonia."

Karu: Government has not discussed supporting Bolt

Karu said that the government has not yet discussed providing direct support to Bolt.

Karu said at a government press conference on Monday that Bolt will be able to apply for support through the Kredex foundation in the same amount and under the same terms as other entrepreneurs. "Startups can take a loan from a bank and Kredex can secure that loan on equal terms with other enterprises," the minister said.

He added that Kredex's guarantee ceiling, which was previously €5 million, has now been removed.

According to the minister, supporting or not supporting Bolt has not been discussed separately at government level. However, he did say that the state is considering acquiring stakes in various companies and this may also include Bolt.

Bolt started as a ride-hailing app for taxis and has since launched courier services for take-away food, groceries and packages. It also has a line of rentable electric scooters. The company employs approximately around 1,500 people worldwide with 500 in Estonia.

Bolt is one of the two "unicorns" in Estonia, meaning a company with a market value of one billion, and the only one whose headquarters are still in Estonia. It is one of Estonia's most successful startups.


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Editor: Helen Wright

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