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SWVL: Bus-hailing app to focus on Egypt/Kenya market, with eye on South Africa

By Sherif Tarek
Posted on Monday, 22 November 2021 12:58

A woman walks past a vehicle with a logo of the Egyptian transport technology start-up Swvl, parked along a road in Islamabad
A woman walks past a vehicle with a logo of the Egyptian transport technology start-up Swvl, parked along a road in Islamabad, Pakistan, November 11, 2019. REUTERS/Akhtar Soomro

With more than half of its investments worth in Africa, particularly in Egypt and Kenya, Swvl Inc has no current plans for new ventures on the continent amid its global fast-paced growth. The bus-hailing app rather intends to expand operations in both countries, where it first launched its services. 

Swvl Inc has no concrete plans to tap into new markets in Africa for the time being, in spite of its aggressive worldwide expansion over the past few years.

There is, however, one African nation that the Dubai-based bus-hailing services startup finds quite appealing nowadays.

“No immediate plans at the moment” to expand into new African markets “but we see South Africa as a market where there is a high product market fit” for Swvl, the company’s CFO Youssef Salem tells The Africa Report.

Latin America

Salem’s comments come shortly after Swvl – which was founded in Cairo four and a half years ago before moving its headquarters to Dubai in 2019 – unveiled a “definitive agreement to acquire a controlling interest in Viapool” – a Latin American mass transit firm – on 16 November.

The deal, which according to Bloomberg is valued at around $10m, will see Swvl operate in Argentina and Chile for the first time. In August, the company acquired Shotl, an on-demand ride provider that runs its services in European countries, in addition to Brazil.

“We will continue to rapidly pursue strategic initiatives to further enhance shareholder value and capitalise on the synergies of our global platform,” Salem says in a statement detailing Swvl’s agreement with Viapool.

Current operations

According to its website, Swvl currently operates in 32 cities and 16 countries in the Middle East, Asia, Europe, Latin America, and Africa, where it manages rides in five Egyptian cities – including Cairo, Giza and Alexandria – as well as the Kenyan capital, Nairobi.

It also operates intercity rides connecting major cities in both Egypt and Kenya – where Swvl started its first operations beyond Egyptian borders. Shortly after kicking off its services in the East African country in 2019, the company got into licensing disputes with local authorities, before they were resolved in the next year.

“For Egypt and Kenya, we continue to expand significantly … in terms of our network, the number of vehicles, the number of riders, etc,” Salem says.

The deal will make Swvl the first $1.5bn Middle-Eastern unicorn to list on the New York bourse.

He adds that Swvl’s current investments in Egypt and Kenya are valued at nearly $70m, which comprises almost 60% of the company’s overall investments.

“We continue to evaluate other countries in Africa for potential future expansions as well,” he says, without divulging further details.

South Africa, Nigeria…?

Apart from South Africa, a few other African countries were previously on Swvl’s radar, including Ivory Coast and Senegal.

Two years ago, co-founder and CEO Mostafa Kandil told Reuters that his firm would begin operations in Nigeria’s commercial capital, Lagos, before the end of 2019, but the move has not materialised, for no apparent reasons.

Last July, Kandil announced that Swvl – which has operations in Saudi Arabia, the UAE, Jordan, and Pakistan – started a merger with an American special purpose acquisition company, Queen’s Gambit Growth Capital, a step that could allow Swvl to list on the Nasdaq stock exchange.

The deal will make Swvl the first $1.5bn Middle-Eastern unicorn to list on the New York bourse.

28-year-old Kandil, who had previously worked with Uber’s ride-hailing company Careem, was highly acclaimed over the merger by Egypt’s Prime Minister Mostafa Madbouly and Dubai’s ruler, Sheikh Mohammed bin Rashid Al Maktoum.

Swvl, which Salem previously said expects to turn its first profit in 2024, is also mulling an initial public offering on the Egyptian Exchange within the next two years.

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