Bolt Financial, a payments unicorn, surprised investors last week with its plan to raise $450 million at a $14 billion valuation. CEO Justin Grooms provided an update revealing that the investment bank mistakenly named as the round’s main investor, Silverbear Capital, had agreed to commit $200 million to the deal. This announcement comes after confusion surrounding Silverbear Capital’s involvement in the round and their denial of any participation.
Silverbear Capital’s partner Brad Pamnani, who is not authorized to make such agreements, was incorrectly identified as leading the deal. The investment bank has denied ever being involved in the round, attributing the error to a broker who mistakenly named them as a lead investor. Pamnani has stated that he met Bolt’s founder Ryan Breslow through an investing club in Los Angeles, but Silverbear Capital was not participating in the round. The broker responsible for the error, AMA Investment Group, accepted responsibility and pledged to correct the documents.
Grooms sent an email to shareholders notifying them of ongoing discussions with lead investors and the possibility of an updated timeline and materials for the round. He also clarified that if Silverbear Capital or their associates do not fulfill the majority of their commitment, Bolt will not enforce the term sheet’s pro rata clause. Grooms emphasized the company’s commitment to holding investors accountable for their pledges, citing a past instance where an investor tried to back out of a prior round.
Despite the confusion surrounding Silverbear Capital’s involvement, Grooms remains focused on raising $250 million in “marketing credits” from The London Fund, a venture capital firm with which Bolt founder Ryan Breslow has a connection through his side project, Love.com. The financials provided to investors also reveal that Bolt’s losses in 2023 had grown to $302 million on revenues of $27 million, with a decrease in revenue from the previous year despite multiple rounds of staff layoffs.
Overall, the situation with Silverbear Capital’s involvement in Bolt’s fundraising round has caused confusion and uncertainty for investors, with conflicting information provided by different parties involved. The company continues to seek funding from other sources, such as The London Fund, and is working to address the issues raised by the latest developments. Investors are eagerly awaiting further updates and clarification on the progress of the funding round and Bolt’s financial performance.
