New York15, March 2022: Mass transportation startup Swvl received final approvals on its IPO from the US’ Securities and Exchange Commission (SEC) today, CFO Youssef Salem told Enterprise. The Egypt-born ride-hailing app is set to go public on the Nasdaq through its merger with US SPAC Queen’s Gambit Growth Capital by the end of the month, Salem added, pending sign-off from Queen’s Gambit at its general assembly meeting on 30 March.
The company will list 35% of its shares on the exchange (c. 50 mn shares) and still plans to invest USD 250-300 mn over the next three years to expand its global footprint after it goes public.
Swvl was founded by Mostafa Kandil, Mahmoud Nouh and Ahmed Sabbah in 2017. The trio started the company as a bus-hailing service in Egypt and other ride-sharing services in emerging markets with fragmented public transportation.
Its services, mainly bus-hailing, enables users to make intra-state journeys by booking seats on buses running a fixed route. This is pocket-friendly for residents in these markets compared to single-rider options and helps reduce emissions (Swvl claims it has prevented over 240 million pounds of carbon emission since inception).
After its Egypt launch, Swvl expanded to Kenya, Pakistan, Jordan and Saudi Arabia. The company also moved its headquarters to Dubai as part of its strategy to become a global company.
Swvl offerings have expanded beyond bus-hailing services. Now, the company offers inter-city rides, car ride-sharing, and corporate services across the 10 cities it operates in across Africa and the Middle East.
Queen’s Gambit, the women-led SPAC in charge of the deal, raised $300 million in January and added $45 million via an underwriters’ overallotment option focusing on startups in clean energy, healthcare and mobility sectors.
The statement also mentions a group of investors — Agility, Luxor Capital and Zain Group — which will contribute $100 million through a private investment in public equity, or PIPE.
Per Crunchbase, Swvl has raised over $170 million. From an African perspective, Swvl features as one of the most venture-backed startups on the continent. The company has been touted to reach unicorn status in the past and will when this SPAC merger is completed.
The company will aptly trade under the ticker SWVL. The listing will make it the first Egyptian startup to go public outside Egypt and the second to go public after Fawry. It will also make the mobility company the largest African unicorn debut on any U.S.-listed exchange, beating Jumia’s debut of $1.1 billion on the NYSE. In the Middle East, Swvl joins music-streaming platform Anghami as the second startup to go public via a SPAC merger.
Swvl had annual gross revenue of $26 million in 2020, according to the statement, and the company expects its annual gross revenue to increase to $79 million this year and $1 billion by 2025 after expanding to 20 countries across five continents.
On why Queen’s Gambit picked Swvl for this deal, Victoria Grace, founder and CEO, said in a statement that the company fit the profile of what she was looking for: “a disruptive platform that solves complex challenges and empowers underserved populations.”
“Having established a leadership position in key emerging markets, we believe Swvl is ready to capitalize on a truly global market opportunity,” she added.
In May, TechCrunch wrote that SPACs didn’t target African startups for several reasons, including a lack of global appeal and private capital and market satisfaction. Judging by Grace’s comments, Swvl has that global appeal and is ready to venture into the public market despite being in operation for just four years.
About Swvl
Swvl is a global provider of transformative tech-enabled mass transit solutions that enhance mass transit safety, reliability, and convenience in some of the world’s most challenging and complex emerging markets. Swvl is uniquely positioned to capitalize on the $1tn global mass transit market opportunity with daily commuting, inter-city travel, TaaS, and SaaS transportation solutions. Swvl currently operates in 115 cities in 18 countries across Latin America, Europe, Africa, and Asia. The differentiated proprietary technology stack features dynamic routing of high capacity vehicles allowing unprecedented vehicle utilization and earnings levels for drivers and massively reduced walk to station distances and prices for riders.
With a track record of exponential growth, Swvl achieved annual gross revenue growth of 430% over the past four years. More than 2 million riders to date have booked more than 75 million rides with more than 20 thousand drivers on Swvl’s platform. TaaS offerings have grown gross revenue per client by 4x with > 100% revenue retention over the past two years. Swvl has undergone rapid geographic expansion, including a launch into Europe and Latin America one year ahead of schedule through the recent acquisitions of Shotl and Viapool.
Swvl recently entered into a business combination with Queen’s Gambit Growth Capital. Implied, fully diluted equity value is $1.5bn, including an upsized PIPE of $122.5m, of which $65.5mn has been pre-funded to accelerate the company’s growth plans. Swvl is the first $1bn+ unicorn from the region to list on NASDAQ and the first mass transit solutions company on any exchange. The PIPE was led by strategic and financial investors, including Agility, Luxor Capital, Zain, EBRD, and Chimera.
Founded on strong ESG principles, Swvl advances social and economic equity while reducing more than 15 million person-hours congestion. Since its inception, the platform has prevented more than 250 million pounds of Co2 emissions.
