If you thought that mobility solutions just come from Silicon Valley, you’re in for a surprise.
For a few years now, Swvl has been dominating the industry from the Middle East. The company is of Egyptian origin and is based in Dubai. Founded in 2017 by Mostafa Kandil, Mahmoud Nouh, and Ahmed Sabbah, Swvl is an on-demand van and bus service: through an app, it offers a mass transit system to reserve and share trips in a van or a bus.
Swvl’s model is an important innovation for countries where public transportation is fragmented between different operators, thus having poor standardization and is deemed as unreliable to users.
In just five years, the company has come to operate in 16 countries, including Saudi Arabia, Egypt, the United Arab Emirates, and Kenya. In 2021 it acquired Shotl, a Barcelona-based company that operates a similar travel-on-demand service in several European countries, including Portugal and Italy, as well as Brazil. That same year, with a SPAC on the horizon, Swvl acquired Viapool, an Argentinian mobility company.
Last week, Swvl, valued at US$1.5 billion, made its debut on Nasdaq through a SPAC combination: it merged with Queen’s Gambit Growth Capital, for which Swvl raised $121.5 million PIPE.
A few days later, it raised another $8 million Series A led by BECO Capital, African firm DiGAME, and the VC fund Silicon Badiay. Another $600 million have been pledged from the firm B. Riley Principal, which will be allocated to Swvl in the coming weeks if conditions are met.
What does the company plan to do with such large funding? Expand globally, first reaching markets like Colombia, Mexico, the U.S., and South Africa.
Shared struggles
Swvl’s main offering are intracity trips, shared rides, and corporate services. It’s similar to Viapool’s, the Argentine company founded in 2010 by Alejo Miragaya and Alejandro Taubas that Swvl acquired last year for US$10 million.
Viapool is a community of bus routes, vans and cars with independent drivers that mainly serve users who seek to avoid public transport.
Talking with Contxto a few months ago, Alejo Miragaya said that Viapool currently offers two models: dedicated buses with tailor-made routes for companies in remote locations, and buses with seats available for any user in more crowded areas.
“The problem of daily commute transport has to do with emerging countries,” Miragaya explained. “Developed countries generally have good public transportation, but in regions like ours it has been harder to predict and understand mobility solutions.”
After a few difficult years – Uber and Didi’s growth explosion hurt Viapool’s business to the point it had to halt operations for a while until it pivoted to corporate travel– Miragaya and Taubas realized there were other interesting players in emerging markets.
Swvl’s aggressive growth caught their attention. Miragaya says that when approaching the company to talk about a possible merger, Swvl’s founders were struck by the fact that Latin America shared similar mobility problems with countries in the Middle East and Africa.
“I think that initial conversation almost immediately made us join Swvl,” says Viapool’s co-founder. With almost 100 vans, 70 cars, additional ride-hailing services, and more than 80 customers, including companies such as Unilever, Bayer, SAP, Nestlé, and Carrefour, Viapool made a complete merger with the Egyptian brand after its acquisition.
According to Miragaya, Swvl has every aspiration to become a global operator, seeking to enter all the major cities and dominate intracity transport. With its current traction and recent debut in public markets, it will be very interesting to see how it manages to do so.
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