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A unicorn on Nasdaq, Dubai-based transport startup Swvl going places

At a valuation of approximately $1.5 billion, Swvl became the first $1 bn-plus unicorn from the Middle East to list on the US Nasdaq

Swvl will have $445 mn in fresh capital to invest in its growth and expansion Swvl's “Right to Mobility" focuses on addressing safety, accessibility, societal and environmental challenges Egyptian banks to finance the provision of 14-passenger vehicles to independent Swvl drivers

On July 28, 2021, Swvl, a Dubai-headquartered transport technology startup, and Queen’s Gambit Growth Capital, a special purpose acquisition company (SPAC), signed a merger deal that resulted in Swvl becoming listed on Nasdaq.

At a valuation of approximately $1.5 billion, Swvl became the first $1 bn-plus unicorn from the Middle East to list on the US Nasdaq. The transaction is expected to close in Q4 of 2021 and the combined public company will be named Swvl Holdings Corp.

The transportation app initially developed for reducing the chaotic traffic jams in Cairo could book bus trips at rates that are close to 80% cheaper than other ride-hailing services like Careem and Uber.

In 2019, venture-capital firms including Sweden’s Vostok, Dubai-based BECO Capital, China’s MSA, New York-based Endeavor Catalyst, Palo Alto-based Autotech, and Oman technology fund helped Swvl raise $42 million to finance its expansion.

The SPAC raised $300 million in January when it was formed and another $45 mn at a later point, SPCA noted in a report. The deal with Swvl will also include a PIPE (private investment in a public entity) of $100 mn which will be put in by a group of investors, meaning that Swvl will have $445 mn in fresh capital to invest in its growth and expansion.

The company builds parallel mass transit systems offering intercity, intracity, B2B, and B2G (business to government) transportation. Swvl currently operates in 10 cities including Egypt, Kenya, Pakistan, the UAE, Saudi, and Jordan.

Upon learning of the listing, Sheikh Mohammed bin Rashid Al Maktoum, Vice President and Prime Minister of UAE and Ruler of Dubai tweeted: “Dubai-headquartered Swvl is the first Middle East unicorn to list on Nasdaq US. Dubai’s impact on the global start-up scene shows the vision and spirit of the region’s youth in shaping tomorrow’s businesses.”

Swvl’s markets have grown rapidly, with more than 1.4 million riders booking over 46 million rides to date with thousands of drivers on Swvl’s platform, according to a statement from the company.

Swvl made $26 mn in annual gross revenue in 2020 with a negative EBITDA of $29 million (loss), according to the SPAC. It said it aims to grow its annual gross revenue to $1 bn by 2025.

Swvl is the second company in the Middle East to go public via a SPAC listing. Earlier this year, Abu Dhabi-based music streaming platform Anghami announced plans to go public by merging with Vistas Media Acquisition Company in a $220 mn deal.

Swvl Mostafa Kandil
Mostafa Kandil Swvl CEO and Co-founder – Image Source: Menabytes

Swvl’s progressive ESG report

Swvl announced the publication of its first annual Environmental, Social, and Governance (“ESG”) Report. The report highlights Swvl’s continued commitment to empowering individuals to realize greater social and economic equity, and creating value for all stakeholders.

Swvl’s “Right to Mobility” focuses on addressing safety, accessibility, societal and environmental challenges with differentiated mobility solutions.

Swvl claims to provide a safe and reliable daily commuting experience to its student customer base (51% female) while achieving a 99.98% accident-free rate.

Swvl reduced the average walking distance to bus stops in developing markets to about 0.64km, and the average lateness across the network in developing markets to about 5.3 min, representing a 50% improvement compared to developed markets.

It said it is generating income for around 17,000 Swvl micro-entrepreneurs while actively providing female drivers with equal economic access and opportunities as their male counterparts.

Swvl
Image source: Wamda

Swvl said the transport sector is the second-highest contributor to CO2 emissions globally, with some 7.9 bn pounds annually on a per capita basis. Swvl has saved about 245 million pounds of CO2 emissions and introduced the first electric vehicles in Cairo, demonstrating its commitment to reducing the transport sector’s carbon footprint across the globe.

Swvl has also launched a new partnership program with banks facilitating captains’ access to financing to buy and run their own buses.  

Independent drivers

Swvl announced its cooperation with several banks operating in the Egyptian market to finance the provision of 14-passenger vehicles to independent drivers working in Swvl’s unfixed transport routes in Egypt. 

Ahmed El-Demerdash, head of city trips at Swvl, said that an agreement has been reached with Nasser Social Bank to finance passenger vehicles of various brands and models in the Egyptian market, which meet the specifications of Swvl.  

He added that the return on financing was reasonable and did not exceed 6.7%. The Bank’s prices were competitive compared to other banks in the market. The procedures are also easy and quick.

Mohamed Ashmawy, Vice Chairperson and Managing Director of Nasser Social Bank, said the bank is expanding financing products and expressed his happiness with the agreement made with Swvl to finance about 50 minibusses in the first phase, with $1.4 mn.

Meanwhile, Swvl announced its acquisition of Shuttle, a mass transportation platform partner, to provide on-demand bus and truck services in various parts of Europe, Latin America, and the Asia-Pacific region, a few days after the company’s US stock exchange listing.