Dubai-headquartered ride-sharing startup Swvl said it is going public through a merger with a special purpose acquisition company, or SPAC. The deal was first reported by The Wall Street Journal. The mobility company is merging with Queen’s Gambit Growth Capital, a SPAC created earlier this year by a team of female executives, who claim it is the first women-led SPAC. Its CEO Victoria Grace is the founder of New York-based VC fund Colle Capital.
The two companies have entered into a definitive agreement for a business combination that would result in Swvl becoming a publicly listed company on the Nasdaq after the completion of the proposed transaction, noted Swvl in a statement, adding that the company will trade under the ticker symbol “SWVL.”
Swvl will be the second Middle Eastern company to take the SPAC route to public markets. Abu Dhabi-headquartered music streaming platform Anghami announced earlier this year that it plans to go public by merging with a SPAC called Vistas Media Acquisition Company. A SPAC is also known as a blank check company and is formed to raise money through an IPO with the aim to buy an existing company and take it public. Swvl will be the first Egyptian-born technology company to go public on the Nasdaq (or outside Egypt) and the second Egyptian technology firm overall to list (Fawry was the first one).
Queen’s Gambit Growth Capital raised USD 300 million in January when it was formed and another USD 45 million at a later point through underwriters’ over-allotment option, noted the report. The deal with Swvl will also include a PIPE (private investment in a public entity) of USD 100 million, which will be put in by a group of investors including Agility, Luxor Capital, and Zain Group. This means that Swvl will have USD 445 million in fresh capital to invest in its growth and expansion.
Founded in 2017 by Mostafa Kandil, Mahmoud Nouh, and Ahmed Sabbah, Swvl started as a bus-hailing service in Egypt, enabling users to travel within a city by booking seats on busses that run on fixed routes. It later expanded its services to Kenya and Pakistan and moved its headquarters to Dubai. The company also offers inter-city travel, car-based ride-sharing, and corporate services in different markets. According to the financial information in its SPAC presentation, Swvl made USD 26 million in annual gross revenue, with a negative EBITDA of USD 29 million. The company said it aims to grow its annual gross revenue to USD 1 billion by 2025.
In a statement, Mostafa Kandil, co-founder and CEO of Swvl, said, “We have succeeded in executing our business plan in some of the most challenging emerging markets, where inefficiencies in infrastructure and related mass-transit systems represent a universal problem and have now reached a critical inflection point where we are ready to share our expertise and technology with the rest of the world.”
“Queen’s Gambit is an ideal partner as they share our core values and are committed to helping accelerate Swvl’s long-term growth plans. With this partnership, as a public company, we will expand our daily commuting offerings and enterprise transportation-as-a-service (TaaS) offerings, removing barriers to seamless mobility for the populations that need it most. In doing so, we will create even greater value for all stakeholders and continue innovating best-in-class technology solutions that improve the universal, daily struggle of mobility,” he added.
In its primary markets—Egypt, Kenya, and Pakistan—it serves both consumers and businesses through daily, travel, and business offerings, whereas in some new markets like Jordan and Saudi Arabia, where Swvl has recently launched, it is only serving businesses. Its TaaS offering enables schools, universities, and corporations to design customized transportation options for their students or employees using Swvl’s software and fleet. The company plans to be in 20 countries across five continents in the next five years.
The Cairo-born startup has raised over USD 100 million to date, including a funding round earlier this year that wasn’t publicly announced. Its previous investors include Vostok New Ventures Global, Beco Capital, Raed Ventures, Sawari Ventures, MSA Capital, Silicon Badia, and Oman Technology Fund. Its last publicly announced funding round was a USD 42 million Series B2 in 2019—after which it quietly raised over USD 20 million in early 2020.
Kandil had previously worked at the Middle East’s leading ride-hailing company as a market launcher. Swvl’s co-founders, Mahmoud Nouh (COO) and Ahmed Sabbah (CTO), left the company in October 2019 and March 2021, respectively, to start their own ventures.
Victoria Grace, Queen’s Gambit founder and CEO, commenting on the merger, said, “When forming Queen’s Gambit, I was squarely focused on assembling a team of highly successful and strategically minded women with unparalleled global relationships, to identify and then grow a disruptive platform that solves complex challenges and empowers underserved populations. In Swvl, we have found each of those things and more. Having established a leadership position in key emerging markets, we believe Swvl is ready to capitalize on a truly global market opportunity.”
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This article was originally published on MENAbytes.