Swvl to list on Nasdaq, South Africa expansion planned

By Sherif Tarek
Posted on Thursday, 31 March 2022 12:21

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

Egyptian bus-hailing service provider Swvl will make its debut on the Nasdaq stock exchange on Thursday 31 March, and then push forward with plans to expand into South Africa later this year.

The Egypt-founded firm, which is based in Dubai, will list through special purpose acquisition company (SPAC) Queen’s Gambit Growth Capital, the company’s CFO Youssef Salem tells The Africa Report in an exclusive interview. The listing will take place despite market volatility driven by the Russia-Ukraine war.

“There is heightened volatility in the short term. However, it doesn’t have a material impact on Swvl given that the company has a fully funded business plan and additional committed capital to fund its M&A business,” says Salem. “As such, the company is able to continue to deliver on its long-term strategy.”

[…] since there is no other stock from the same sector and region [on Nasdaq, Swvl] could attract interest.

“Recently, after what happened in Ukraine, there has been a selloff in tech stocks,” says Amr Elalfy, head of research at Prime Securities, an investment bank headquartered in Cairo. “But since there is no other stock from the same sector and region [on Nasdaq, Swvl] could attract interest.”

The valuation is $10 per share, valuing the company at approximately $1.5bn. Barclays is the sole book runner and Cravath, Swaine & Moore is sole legal advisor on the deal, says Salem.

Ambitions

The Egyptian company first unveiled its intention of listing on Nasdaq in July last year, through a merger with already-listed American Queen’s Gambit Growth Capital with the aim to become the first $1.5bn unicorn from the Middle East on the New York exchange.

“The parties expect the business combination to close on 31 March 2022…Upon closing, post-combination Holdings’ Class A ordinary shares and warrants are expected to commence trading on Nasdaq, under the symbols ‘SWVL’ and ‘SWVLW’, respectively, on April 1,” Queen’s Gambit said in a statement.

The offering, a 35% stake in the company, is estimated to provide a $445m cash injection, which will be used for expansion across 20 countries by 2025, including potential business roll out in Nigeria, Côte d’Ivoire and Senegal.

Swvl, which expects to turn its first profit in 2024, announced last year it was also considering an IPO on the Egyptian Exchange. However, according to CFO Salem, there is no specific timeline for a listing on the EXG.

South Africa plans

Salem also says that Swvl plans to expand into South Africa this year, although no specific date was given.

In Africa, Swvl already operates intercity rides connecting major cities in both Egypt and Kenya – where it started its first operations beyond Egyptian borders. It also manages rides in major Egyptian cities, including Cairo, Giza and Alexandria, as well as Kenya’s Nairobi. Operations in both countries make up more than half of the company’s overall investments.

Founded in Cairo in 2017, before moving its headquarters to Dubai in 2019, Swvl has been expanding aggressively across the globe over the past years through a series of acquisitions and organic expansions.

In January, the company said the expansion “has exceeded an important milestone in its rapid geographic expansion with a footprint of 115 cities across 18 countries on 4 continents”.

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