Egyptian ride-sharing startup, Swvl is going public via SPAC at a valuation of $1.5 billion

Swvl, a Cairo-born, but Dubai headquartered ride-sharing startup has disclosed on Tuesday that it is going public by merging with a special purpose acquisition company (SPAC). The mobility startup said it’s merging with Queen’s Gambit Growth Capital, a women-led SPAC, which will see the startup’s valuation rise to over $1.5 million.

Swvl was founded in 2017 by Mostafa Kandil, Mahmoud Nouh, and Ahmed Sabbah, the startup kicked off operations as a bus-hailing service in Egypt, enabling users to travel within a city by booking seats on buses that run on fixed routes. Later on, it expanded to other emerging markets such as Kenya, Pakistan, Jordan, and Saudi Arabia. It also moved its headquarters to Dubai, in a bid to become a global company.

According to information disclosed in its SPAC presentation, the company had annual gross revenue of $26 billion last year and hopes to increase it to $79 million this year. Swvl also aims to grow its annual gross revenue to $1 billion by 2025. The company will trade under the ticker “SWVL”.

The deal with Swvl will also include a PIPE (private investment in a public entity) of $100 million, which will be put in by a group of investors including Agility, Luxor Capital, and Zain Group. What this means is that Swvl will have $445 million in fresh capital to invest in its growth and expansion.

Queen’s Gambit Growth Capital raised $300 million when it was launched in January this year. It later raised another $45 million through underwriters’ overallotment option, the statement said.

Commenting on the deal, Mostafa Kandil, the 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, who shares our core values and is committed to helping accelerate Swvl’s long-term growth plans. With their partnership, as a public company, we will expand our daily commuting offerings and enterprise TaaS services that remove 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 for so many,” 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 of the new markets like Jordan and Saudi, where Swvl has launched recently, it is only serving businesses.

Its business offering, known as transportation-as-a-service enables schools, universities, and corporates 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 5 continents in the next five years.

Victoria Grace, Queen’s Gambit Founder & Chief Executive Officer, 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.”

Once this deal falls through, Swvl will be the first tech-enabled mass transit solution to be listed on any stock exchange. It will also be the second company from the Middle East to take the SPAC route to IPO. The first startup to have done so is the Abu Dhabi-based music streaming platform, Anghami, which announced its plan to go public by merging with a SPAC, Vistas Media Acquisition Company. 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.