A lawsuit that was filed against one-click checkout startup Bolt by one of its biggest customers will be dismissed as the two parties have agreed on a settlement.
The customer is now a shareholder of the company.
Bolt CEO Maju Kuruvilla acknowledged in an interview that ABG is now a "shareholder" after the two parties settled out of court.
He said that they were putting their differences behind them. It was settled on agreeable terms for both parties.
Bolt will offer its one-click checkout service to ABG's brands, while evaluating the possibility of expanding Bolt's technology to more portfolio brands in the coming months.
Jamie Salter, founder, chairman and CEO of ABG, said in a written statement: "ABG looks forward to deepen its ties with Bolt by becoming shareholders under the new leadership of Chief Executive Maju Kurivilla and we are excited to continue exploring broader opportunities with our businesses."
There were allegations made earlier this year.
ABG, which owns dozens of retail brands, is suing Bolt, according to a report in April. Bolt missed out on over $150 million in online sales due to its failure to deliver technology that it promised, according to ABG. Bolt raised funding by overstating the nature of its integrations with the company's brands in an effort to make it seem like it had more customers than it actually did. Bolt raised $355 million in a Series E financing that valued the company at $11 billion.
Bolt wants to give businesses the same technology Amazon has been known for since 1997 and at the same time incorporate payments and fraud services meant to ensure transactions are real and payments can be accepted.
Bolt said that ABG's claims were without merit and that they were trying to change the terms of the companies' agreements.
Insider was told by unnamed sources that ABG was trying to claim an ownership stake in the company. Bolt entered a deal to give the holder of the group stock warrants the right to buy shares at a certain price before a certain date, according to Insider.
Speculation about ABG's motives may have had some merit.
The outspoken founder of Bolt, Ryan Breslow, stepped down in January of this year. The company was started by Breslow after he dropped out of school. Prior to joining the company as its chief product and technology officer, Kuruvilla worked at Amazon for eight years.
Kuruvilla said that Breslow is involved in day-to- day operations.
The man is not. He is an investor and shareholder but the board wants him to run the company.
Bolt has raised more than $1 billion in funding and was valued at $11 billion at the time of its Series E raise in January. Schonfeld, Invus Opportunities, CreditEase and H.I.G. Growth are among the investors.
In an early May post, Kuruvilla wrote that Bolt has a 131% year-over-year increase in the number of shoppers and active merchant accounts.
According to The Information, the number of merchants Bolt works with has been hovering in the low 300's since 2020. According to an internal document viewed by The Information, the revenue from transactions Bolt processed grew by 10% last year after it slashed the fees merchants pay for its services.
According to Kuruvilla, the company is close to having 14 million shoppers on its network, but he wouldn't give any details about revenue.
He expects that to grow a lot through the rest of the year and into the future.
Bolt is hoping to double the live gross merchandise value for the rest of the year, according to Kuruvilla.
In late May, Bolt was said to have laid off as many as 250 employees, although the company did not specify.
The decision was painful but necessary as Bolt looked for ways to extend its runway. He said that the move was part of a number of cost adjustments and budget changes that Bolt had made.
He said that they doubled down on things that are a core value proposition for them and their customers. We are close to having a three-year operating runway for our company, which is important in this market. Many merchants look for that. It will help us on our way to profitability.
E-commerce traffic is down 25% year-over-year, despite the fact that it is still higher than before the epidemic. Bolt has the chance to help merchants see more conversions on their websites and fewer people drop off at checkout, get customers to be repeat customers and create shopper accounts, according to him. He thinks it can help them.
Kuruvilla thinks that Bolt's new alliance with its customer is all water under the bridge.
Bolt has been used by both Lucky Brand and FOREVER21 for a long time, and they will continue to use it.
The CEO of ABG has a very high bar for the kinds of partners he wants to associate with, so he is working with me to find ways to expand it further. He's a big fan of Bolt and our products. We want to take it to the next level.
I launched my weekly newsletter on May 1st. It will be in your inbox if you sign up here.
The Interchange: What’s the deal with the one-click checkout space?