The e-commerce software company Bolt and its former CEO, Ryan Breslow, are currently the subjects of a probe by the U.S. Securities and Exchange Commission (SEC). The investigation, initiated last year, is examining whether any federal securities laws were violated during Bolt’s fundraising efforts in 2021. According to a letter from a lawyer representing Bolt investors, the SEC is particularly interested in statements made during the company’s $355 million Series E round, which valued the company at $11 billion.
The letter, written on behalf of two investors, alleges that Ryan Breslow “misled” investors by making material misrepresentations about the company’s financial condition and product pipeline. The SEC is now investigating these claims to determine if the alleged misrepresentations led to investors buying into the company at an inflated valuation.
Following the Series E financing announcement in January 2022, Ryan Breslow faced scrutiny and controversy related to his remarks about competitors and investors. As a result, he eventually stepped down as CEO and launched a wellness marketplace called Love in January 2022.
In a separate legal matter, a lawsuit has been filed against Ryan Breslow by former board member Steve Sarracino of Activant Ventures. The lawsuit alleges that Breslow removed Sarracino and two other board members for refusing to help him repay a $30 million loan. Furthermore, the suit claims that CEO Maju Kuruvilla and three subsequent board members did not compel Breslow to make the loan repayments.
Ryan Breslow has yet to personally respond to the subpoena and lawsuit, and the SEC has declined to comment on the investigation. Despite these legal challenges, Bolt remains well-capitalized and continues to operate normally.
In 2021, Bolt attracted significant attention and capital during its Series E funding round. The company expressed plans to utilize the funding to remain competitive and expand into Europe. However, in the months following, the company faced layoffs and a lawsuit from one of its largest customers.
Despite the legal and financial hurdles, Bolt’s leadership had reportedly engaged in discussions to seek additional capital at a higher valuation of $14 billion. As of now, these efforts have not materialized. The SEC probe will further determine the implications for Bolt and Ryan Breslow as they navigate the aftermath of these legal challenges.