Egyptian mobility company Swvl has raised an additional US$21.5 million in private investment in public equity (PIPE) deal as part of its proposed business combination with Queen’s Gambit, ahead of its future listing on the Nasdaq exchange.
Founded by Mostafa Kandil in 2017, Swvl is a mass-transit system that enables riders heading in the same direction to share a ride in a van or bus. The startup’s proprietary mobility solutions are helping to solve mass transit supply and demand challenges in emerging markets, empowering underserved communities with transportation solutions that are reliable, convenient, safe, and affordable.
The startup is among the best-funded in Africa, and is now active across 10 cities in Egypt, Kenya, Pakistan, the United Arab Emirates (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 its platform.
Disrupt Africa reported last July Swvl was set for an initial public offering (IPO) on the Nasdaq exchange after a merger with special purpose acquisition company (SPAC) Gambit Growth Capital that values it at US$1.5 billion – making it a rare African “unicorn”.
Now, Swvl has entered into agreements for an additional US$21.5 million in PIPE funding, with new investors including the European Bank for Reconstruction and Development (EBRD). Kandil said the investment was a “clear vote of confidence” in Swvl’s growth strategy and future as a public company.
“We continue to demonstrate significant momentum towards our strategic goals. Armed with additional funding certainty, we are confident in Swvl’s ability to bring its transformative technology and services to new markets, in turn transforming a US$1 trillion global mass transit industry that is sorely in need of effective solutions. We look forward to completing the business combination, entering the public market, and continuing to create tremendous value for all stakeholders,” he said.
Victoria Grace, founder and CEO of Queen’s Gambit Growth Capital, said since announcing the proposed business combination with Swvl, the Swvl team had gone well beyond every element of its business plan, with strong execution across its existing markets, while pursuing additional attractive market opportunities in new geographies.
“The additional capital is expected to allow Swvl to continue to create significant value for all stakeholders. Swvl continues to be uniquely positioned from a technological, financial, and operational basis to execute on this tremendous market opportunity,” she said.
The investment terms are substantially similar to those in the initial PIPE financing announced in conjunction with Swvl’s proposed business combination transaction with Queen’s Gambit in July. The additional investment increases the aggregate amount of expected PIPE proceeds to US$121.5 million, providing additional capital to fund Swvl’s expansion efforts and further investments in its proprietary technology platform.