Egyptian ride-sharing company Swvl to go public through SPAC merger
Swvl Inc., a provider of mass transit and shared mobility solutions, and Queen’s Gambit Growth Capital, a special purpose acquisition company (SPAC), announced that they have entered into an agreement for a business combination that would result in Swvl becoming a publicly listed company. Upon completion of the proposed transaction, the combined public company will be named Swvl Holdings Corp and is expected to be listed on NASDAQ under the ticker symbol SWVL.
Swvl, co-founded by Egyptian entrepreneur Mostafa Kandil in 2017 when he was just 24 years old, is transforming the $1 trillion global mass transit market. The company’s proprietary mobility solutions are helping to solve mass transit supply and demand challenges in complex, emerging markets – empowering massively underserved communities with transportation solutions that are reliable, convenient, safe, and affordable. Featuring diversified transit offerings that, in just a few short years, have evolved from daily commuting to inter-city retail travel, to transport as a service (TaaS) offerings for businesses, schools, universities and other critical service organisations, Swvl is poised to take the next step in its evolution.
Mostafa Kandil, Swvl founder and CEO said, ”Mass transit systems in cities around the world are riddled with deficiencies, resulting in congestion, environmental concerns and reduced productivity. In certain emerging market cities, commuter round-trip wait times are often greater than 40 minutes and, in one major city, upwards of 80% of women reported that they have experienced harassment on public transport. Even in developed markets, the societal cost imposed by a lack of mass transit solutions can be staggering. In the United States, for instance, the annual cost of traffic is estimated to be $88 billion, and in many parts of the world current alternatives to mass transit are prohibitively expensive. To address these problems, we founded Swvl with a simple but ambitious goal – to empower all people to go where they want to, when they want to, and to feel comfortable doing it.”
In just four years, Swvl has become the industry leader in mass transit across 10 cities in Egypt, Kenya, Pakistan, the UAE, Saudi Arabia and Jordan. Swvl’s gross revenue and markets have grown rapidly, with more than 1.4 million riders booking more than 46 million rides to date with thousands of drivers on Swvl’s platform. Swvl’s established user base has a track record of loyalty, with more than 20% of inter-city riders opting to use multiple platform offerings. Further, the company empowers drivers in emerging markets – who frequently experience income uncertainty from existing mass transit operations – to earn approximately double that of other ride-sharing platforms.
With its TaaS offerings, Swvl has already enabled more than 100 organisations around the world to reduce costs through dynamic routing, network planning, demand estimation, fleet optimisation, and other leading transit services. With continued momentum in its TaaS offerings, the company is well positioned to launch its high-margin SaaS solutions for institutions that maintain their own fleet and seek further efficiencies through advanced routing and planning capabilities.
Agility, a global supply chain leader operating in many of Swvl’s key markets, has made a significant capital commitment in Queen’s Gambit and the combined company. In addition, Zain, a mobile voice and data services operator with nearly 50 million active customers across many of Swvl’s current markets, has invested in the combined company. As such, Swvl believes there may be opportunities for strategic and operational collaboration with Agility and Zain, which could accelerate its global expansion, increase user engagement and expand its SaaS/TaaS client base.
Victoria Grace, Queen’s Gambit founder and chief executive officer said, ”Having established a leadership position in key emerging markets, we believe Swvl is ready to capitalise on a truly global market opportunity.”
The transaction is expected to generate gross proceeds of up to approximately $445 million, which will be used to fund and accelerate Swvl’s growth plan. This includes a $100 million fully committed private placement of common shares of the combined company, led by Agility, Luxor and Zain. The implied, fully diluted equity value of the combined company is approximately $1.5 billion, assuming minimal redemptions by Queen’s Gambit’s public shareholders, with existing Swvl shareholders expected to own approximately 65% of the combined company.
The transaction is expected to close in the fourth calendar quarter of 2021, subject to customary closing conditions, including the approval of Queen’s Gambit shareholders.
Are you seeking private equity or venture capital investment to grow your company? Africa Private Equity News now offers you the opportunity to connect with investors backing African businesses. Contact us at editor@africaprivateequitynews.com for our rate card and more information.