Swvl SPAC Merger: Egyptian Ride-Sharing Firm to Go Public

Swvl to Become Publicly Traded Through SPAC Merger

Ride-sharing firm Swvl, operating out of Cairo and Dubai, has announced plans to become a publicly listed company. This will be achieved through a merger with Queen’s Gambit Growth Capital, a special purpose acquisition company (SPAC), as stated on Tuesday.

Company Founding and Early Growth

Founded in 2017 by Mostafa Kandil, Mahmoud Nouh, and Ahmed Sabbah, Swvl initially launched as a bus-hailing service within Egypt. The founders aimed to address transportation gaps in emerging markets characterized by underdeveloped public transit systems.

The company’s core service allows users to book seats on buses following predetermined routes for travel within states. This provides a more affordable transportation option compared to individual ride services. Furthermore, Swvl asserts it has contributed to environmental sustainability, preventing over 240 million pounds of carbon emissions since its inception.

Expansion Across Regions

Following its initial launch in Egypt, Swvl broadened its operational footprint to include Kenya, Pakistan, Jordan, and Saudi Arabia. As part of its global expansion strategy, the company relocated its headquarters to Dubai.

Swvl’s service offerings have evolved beyond its original bus-hailing focus. Currently, the company provides inter-city transportation, car ride-sharing, and dedicated corporate services across the ten cities where it operates in Africa and the Middle East.

Queen’s Gambit and Investment Details

Queen’s Gambit, a SPAC led by a female team, secured $300 million in funding during January. An additional $45 million was raised through an underwriters’ overallotment option, with a focus on startups operating in the clean energy, healthcare, and mobility sectors.

A group of investors, including Agility, Luxor Capital, and Zain Group, will contribute $100 million through a private investment in public equity (PIPE) agreement.

Funding and Unicorn Status

According to Crunchbase data, Swvl has raised over $170 million in funding. The company is recognized as one of the most heavily venture-backed startups in Africa. Previously predicted to achieve unicorn status, this SPAC merger is expected to realize that valuation upon completion.

Public Listing and Market Impact

Upon listing, Swvl will trade under the ticker symbol SWVL. This will mark a significant milestone as the first Egyptian startup to go public on an exchange outside of Egypt, and the second overall after Fawry.

The listing is also projected to be the largest debut of an African unicorn on a U.S. exchange, surpassing Jumia’s $1.1 billion debut on the NYSE. In the Middle East, Swvl joins music-streaming platform Anghami as the second company to go public via a SPAC merger.

Revenue Projections

Swvl reported annual gross revenue of $26 million in 2020. The company anticipates an increase to $79 million in annual gross revenue this year, with projections reaching $1 billion by 2025, following expansion into 20 countries across five continents.

Rationale for the Merger

Victoria Grace, founder and CEO of Queen’s Gambit, explained the decision to partner with Swvl, stating the company aligned with her investment criteria: “a disruptive platform that solves complex challenges and empowers underserved populations.”

She further added, “Having established a leadership position in key emerging markets, we believe Swvl is ready to capitalize on a truly global market opportunity.”

SPACs and African Startups

Recent reporting by TechCrunch indicated that African startups have not been frequent targets for SPACs due to factors such as limited global recognition and sufficient private capital, alongside existing market contentment. However, Grace’s statements suggest Swvl possesses the necessary global appeal and is prepared for the public market despite its relatively short operational history of just four years.