The degree to which previous founders and workers of Egyptian ridesharing company SWVL have left the company to start new businesses less than four years after it was founded closely resembles the same pattern followed by Mostafa Kandil, the CEO and co-founder of the startup.
Mostafa Kandil, then 30 years old, co-founded SWVL after leaving Careem, where he had worked for a year. Although he, a petroleum engineering graduate, had described his job until SWVL as “too stiff”, it appears that a different factor — timely execution —is to blame for the early exit of both the company’s founders and employees to found/co-found their own startups.
This factor was hinted at by Vostok New Ventures after it participated in SWVL’s investment round in 2019.
“The entrepreneur here is of very high quality,” noted Vostok New Ventures, now VNV Global, in its financial report of 2019. “Previously at Rocket and Careem, Mostafa Kandil has built a team that executes well and at high speed…I believe that Mostafa may be the first Arab tech entrepreneur that builds a global product.”
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In fact, the statement has gone on to be proved just 2 years after, with SWVL recently announcing it is going public through a merger with a special purpose acquisition company (SPAC), Queen’s Gambit Growth Capital, at a $1.5bn valuation.
Kandil was quoted as saying that the implication of the SPAC is that SWVL has “…succeeded in executing our business plan in some of the most challenging emerging markets, where inefficiencies in infrastructure and related mass-transit systems represent a universal problem, and have now reached a critical inflection point where we are ready to share our expertise and technology with the rest of the world.”
But perhaps the biggest story from SWVL’s success is the quantity of startups it has inspired, three of which are quite worthy of note:
Founded Barely A Year Ago, B2B Ecommerce Startup Capiter Has Raised More Than $30m To Date
Cairo-based B2B e-commerce startup Capiter was co-founded by Ahmed Nouh, who left his shipping and logistics business to join SWVL in 2017. Nouh resigned from SWVL in 2019, to co-found Capiter.
Capiter is a B2B marketplace that brings together FMCGs, wholesalers, and merchants on one platform.
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Capiter’s platform supports over 12 different merchant categories, including mom-and-pop shops, hotels, restaurants, cafes, electronic stores, supermarkets, grocery stores, and catering organizations, all of which have their own unique solutions.
The company’s profits come from small margins on products purchased from manufacturers and sold to retailers. Then there are rebates for suppliers and commissions from merchants’ working capital. Capiter also makes money by providing market research and data services to manufacturers and fast-moving consumer goods companies.
Typically, B2B e-commerce platforms follow one of two models: asset-light or inventory-heavy. Capiter chose a hybrid model, according to Nouh, by making deliveries without owning any trucks in order to ensure scalability and inventory ownership, especially for high-turnover products, which helps the company with high availability and better pricing.
The startup recently raised a $33 million Series A, including from SWVL’s former investor, China-based MSA Capital.
Founded Barely Five Months Ago, Egyptian Digital Bank Telda Has Raised Egypt’s Largest Ever Preseed From Investors Such As Sequoia
Telda was founded barely five months ago by Swvl’s co-founder and former Chief Technology Officer, Ahmed Sabbah. The startup is Egypt’s first digital bank.
Users may create a Telda account entirely online, using only their phone number and national ID number. Telda’s account comes with a Mastercard-powered card that can be used for online payments, in-store transactions, which cash withdrawals (and can be requested from the app). Users may use the IBAN that they earn for their digital account on Telda to receive money from anyone in Egypt and beyond.
The startup is aiming at Gen Z in the whole of the Middle East, starting with Egypt.
Although no previous investor in SWVL participated in Telda’s pre-seed round, the investment came from notable investors such as Sequoia Capital Global Founders Capital and Class 5 Global, with more rounds due in the future.
Founded This Year, Dubai-based PropTech Startup Hotdesk Has Raised $1m Seed, Backed By One Of SWVL’s Employees
Hotdesk was founded most recently by Mohamed Khaled, who was recently involved in Swvl’s $1.5 billion SPAC merger as Director of Finance.
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By providing flexible, on-demand access to workspaces, hot desks, private offices, and meeting rooms, the startup is disrupting the real estate industry in the Middle East.
Participating in Hotdesk’s latest investment is Youssef Salem, Swvl’s current Chief Financial Officer.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based lawyer who has advised startups across Africa on issues such as startup funding (Venture Capital, Debt financing, private equity, angel investing etc), taxation, strategies, etc. He also has special focus on the protection of business or brands’ intellectual property rights ( such as trademark, patent or design) across Africa and other foreign jurisdictions.
He is well versed on issues of ESG (sustainability), media and entertainment law, corporate finance and governance.
He is also an award-winning writer