In August this year, Egyptian ride-sharing startup, SWVL, acquired a majority stake in Spain’s Shotl, but it looks like it is still gobbling up more. The latest is ViaPool, a mass transit company in Latin America (Argentina) which Swvl has acquired a controlling stake in, according to a Bloomberg press release.
Details of the deal were not revealed in the press release, but the deal is worth about $10 million, according to a person familiar with the matter who asked not to be identified because it was private.
Swvl’s acquisition of ViaPool is its second since it announced its plans in July to go public through a merger with Queen’s Gambit Growth Capital, and the company said the deal is expected to close this quarter.
Mostafa Kandil, Swvl’s co-founder and CEO
In August, Swvl bought Shotl, a Europe-based ride-on-demand service that uses buses and also operates in Brazil.
The company offers ViaPool transport personnel service through the use of minivans and buses, is a mix between the participation of private passenger and public transport services.
The company has more than 80 corporate clients including Unilever Plc, Bayer AG and Stellantis NV.
“We will continue to rapidly pursue strategic initiatives to further enhance shareholder value and take advantage of the synergies in our global platform,” Swvl Chief Financial Officer Yousef Salem said in the statement.
A Look At What SWVL Does
Swvl, which was founded in 2017 by Mostafa Kandil, Mahmoud Nouh, and Ahmed Sabbah, began as a bus-hailing service in Egypt, allowing users to travel inside a city by booking seats on fixed-route buses. Later, the service was expanded to Kenya and Pakistan, and the company’s headquarters were relocated to Dubai. In several markets, the company now offers intercity travel, car-based ride-sharing, and corporate services. Swvl produced $26 million in annual gross revenue, according to its SPAC presentation, with a negative EBITDA of $29 million (which means the company lost $29 million). It stated that by 2025, it hopes to increase its yearly gross revenue to $1 billion.
Swvl services both consumers and businesses in its major countries of Egypt, Kenya, and Pakistan through Daily, Travel, and Business solutions, however it solely serves businesses in some of the new regions it has just entered, such as Jordan and Saudi Arabia. Swvl’s transportation-as-a-service business offering allows schools, universities, and corporations to create customized transportation alternatives for their students or employees using Swvl’s software and fleet. In the next five years, the company wants to be in 20 countries on five continents.
The Cairo-based business has raised over $100 million to date, including an unannounced fundraising round earlier this year. Vostok New Ventures Global, Beco Capital, Raed Ventures, Sawari Ventures, MSA Capital, Silicon Badia, and Oman Technology Fund are among its prior investors. Its most recent public investment round was a $42 million Series B-2 round in 2019, following which it surreptitiously raised another $20 million in early 2020.
Mostafa had previously worked as a market launcher for the Middle East’s largest ride-hailing company. Swvl co-founders Mahmoud Nouh (COO) and Ahmed Sabbah (CTO) both departed the company to start their own businesses in October 2019 and March 2021, respectively.
SWVL ViaPool Latin America SWVL ViaPool Latin America
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 write
SWVL, an Egyptian ride-sharing startup, has reported its third-quarter earnings in advance of its planned first public offerings. In the third quarter of 2021, the mass transit company, which provides B2C and B2B/B2G solutions to make transportation more inexpensive, dependable, and easy for its consumers and corporate clients, said it had 507,000 B2C users.
“Combination of high user retention and low acquisition cost (both as a result of ability to offer a reliable, safe and convenient ride up to 80% cheaper than private transport) led to strong active user growth,” SWVL states in the earnings report.
According to the company, the increase in its B2C userbase reflects a 6x increase in the last three years and a 3.1x increase quarter over quarter.
As of September this year, the startup reported $66 million in annual recurring revenue. SWVL made $16 million in the third quarter of this year alone, according to the report, reflecting a 14x increase over the previous three years.
While it took the startup six months to reach the 50k bookings milestone in Cairo, Egypt, where it first began in 2017, it only took two months to reach the same milestone in Islamabad, Pakistan, where it launched two years later in 2019.
“Swvl plans to continue focus on growth for the remaining cities to reach critical mass faster and generate levers to optimize the economics in a sustainable manner,” SWVL notes.
SWVL credits its first success in Cairo to cutting-edge technology solutions such as demand estimate, demand-based capacity allocation, automated dynamic routing and pricing algorithms, and supplier bidding platforms, as well as the Swvl team’s perfect execution.
Since its beginning, the company has served over 1.8 million consumers (excluding B2C/B2G users). It has also received over 61.3 million reservations and onboarded over 19.4 thousand drivers so far.
A Look At What SWVL Does
Swvl, which was founded in 2017 by Mostafa Kandil, Mahmoud Nouh, and Ahmed Sabbah, began as a bus-hailing service in Egypt, allowing users to travel inside a city by booking seats on fixed-route buses. Later, the service was expanded to Kenya and Pakistan, and the company’s headquarters were relocated to Dubai. In several markets, the company now offers intercity travel, car-based ride-sharing, and corporate services. Swvl produced $26 million in annual gross revenue, according to its SPAC presentation, with a negative EBITDA of $29 million (which means the company lost $29 million). It stated that by 2025, it hopes to increase its yearly gross revenue to $1 billion.
Swvl services both consumers and businesses in its major countries of Egypt, Kenya, and Pakistan through Daily, Travel, and Business solutions, however it solely serves businesses in some of the new regions it has just entered, such as Jordan and Saudi Arabia. Swvl’s transportation-as-a-service business offering allows schools, universities, and corporations to create customized transportation alternatives for their students or employees using Swvl’s software and fleet. In the next five years, the company wants to be in 20 countries on five continents.
The Cairo-based business has raised over $100 million to date, including an unannounced fundraising round earlier this year. Vostok New Ventures Global, Beco Capital, Raed Ventures, Sawari Ventures, MSA Capital, Silicon Badia, and Oman Technology Fund are among its prior investors. Its most recent public investment round was a $42 million Series B-2 round in 2019, following which it surreptitiously raised another $20 million in early 2020.
Mostafa had previously worked as a market launcher for the Middle East’s largest ride-hailing company, Careem. Swvl co-founders Mahmoud Nouh (COO) and Ahmed Sabbah (CTO) both departed the company to start their own businesses in October 2019 and March 2021, respectively.
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
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.”
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.
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.
SWVL’s three co-founders: L-R -Mostafa Kandil, Mahmoud Nouh and Ahmed Sabbah. Credits: SWVL
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.
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 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
Swvl, an Egyptian ridesharing startup, has announced a partnership with various Egyptian banks to fund the provision of 14-passenger vehicles to independent drivers working on Swvl’s unfixed transportation routes.
This would help young people earn more money while also supporting the state’s efforts in this area. It will also help the transportation sector, which is expanding rapidly.
Swvl’s head of city trips, Ahmed El-Demerdash, said the company has achieved an agreement with Nasser Social Bank to finance passenger vehicles of various brands and models in the Egyptian market that match Swvl’s standards. Several young individuals have already applied for auto loans, and a deal is currently being worked out with some other banks to finance some more.
SWVL joins the increasing number of African ride-sharing startups adopting vehicle financing schemes. Source: SWVL
El-Demerdash went on to say that the return on investment was respectable, not exceeding 6.7 percent. In comparison to other banks in the market, the Bank’s prices were reasonable. The procedures are also simple and quick to complete.
Nasser Social Bank’s Vice Chairperson and Managing Director, Mohamed Ashmawy, stated that the bank is extending its financing options. In accordance with the state’s economic policies, the bank attempts to help various parts of society in order to revitalize the economy and provide job opportunities.
He expressed his delight at the deal reached with Swvl to finance about 50 minibuses in the first phase for a total of EGP 22 million.
Swvl, meantime, announced the acquisition of Shotl, a mass transportation platform partner, to deliver on-demand bus and truck services throughout Europe, Latin America, and the Asia-Pacific region, only days after the company’s $1.5 billion IPO on the New York Stock Exchange. It was the first Middle Eastern corporation to be listed on the New York Stock Exchange.
A Look At What SWVL Does
Swvl, which was founded in 2017 by Mostafa Kandil, Mahmoud Nouh, and Ahmed Sabbah, began as a bus-hailing service in Egypt, allowing users to travel inside a city by booking seats on fixed-route buses. Later, the service was expanded to Kenya and Pakistan, and the company’s headquarters were relocated to Dubai. In several markets, the company now offers intercity travel, car-based ride-sharing, and corporate services. Swvl produced $26 million in annual gross revenue, according to its SPAC presentation, with a negative EBITDA of $29 million (which means the company lost $29 million). It stated that by 2025, it hopes to increase its yearly gross revenue to $1 billion.
Swvl services both consumers and businesses in its major countries of Egypt, Kenya, and Pakistan through Daily, Travel, and Business solutions, however it solely serves businesses in some of the new regions it has just entered, such as Jordan and Saudi Arabia. Swvl’s transportation-as-a-service business offering allows schools, universities, and corporations to create customized transportation alternatives for their students or employees using Swvl’s software and fleet. In the next five years, the company wants to be in 20 countries on five continents.
The Cairo-based business has raised over $100 million to date, including an unannounced fundraising round earlier this year. Vostok New Ventures Global, Beco Capital, Raed Ventures, Sawari Ventures, MSA Capital, Silicon Badia, and Oman Technology Fund are among its prior investors. Its most recent public investment round was a $42 million Series B-2 round in 2019, following which it surreptitiously raised another $20 million in early 2020.
Mostafa had previously worked as a market launcher for the Middle East’s largest ride-hailing company. Swvl co-founders Mahmoud Nouh (COO) and Ahmed Sabbah (CTO) both departed the company to start their own businesses in October 2019 and March 2021, respectively.
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
Swvl, a Dubai-based provider of transformative mass transit and shared mobility solutions with Egyptian roots, has acquired a controlling stake in Shotl, a Spanish mass transit platform that partners with municipalities and corporations to provide on-demand bus and van services across Europe, LATAM, and APAC, thereby optimizing public transportation systems and reducing reliance on expensive private options.
Mostafa Kandil, Swvl’s co-founder and CEO
“Our two companies share the view that there is an urgent need to transform traditional public transportation to make it more accessible, convenient and sustainable,” said Mostafa Kandil, Swvl Founder and CEO. “Shotl’s vision for the future of mobility, with an emphasis on electrification, the reduction of congestion and emissions, and affordability — is exactly what Swvl has already achieved in ten emerging market megacities and the reinvented model for public transit systems across the world. With Shotl’s strategic relationships, rapidly growing user base and deep knowledge of its market landscapes, Swvl is meaningfully expanding its core markets, in line with our publicly stated growth objectives.”
Here Is What You Need To Know
With a presence in 22 cities across 10 countries, including Brazil, Japan, and a pan-European footprint1, over 350,000 bookings to date, more than 10% market share in Europe, and rapid adoption, Shotl is addressing challenges posed by transportation voids in suburbs, cities, and campuses. Shotl works with governments, towns, and businesses to reach those who live or work in low-density locations that are mainly neglected by existing mass transit and ride-sharing choices, such as senior citizens and people with limited mobility, who typically lack equal transportation access.
Shotl will now be able to use Swvl’s unique technology to improve route optimization and vehicle load while minimizing traffic congestion. Shotl will act as Swvl’s European center and platform for additional major expansion, with offices in 20 locations across eight European nations, including Spain, Germany, France, the United Kingdom, Italy, Switzerland, Portugal, and Finland.
The addition of Shotl to the Swvl portfolio gives the company a strong presence in Europe, a full year ahead of Swvl’s expansion plans, and more than doubles Swvl’s geographic reach, bringing the total Swvl portfolio to 32 cities in 16 countries.
“We are very pleased to be joining the Swvl team, working in concert to realize our shared vision of building more equitable and accessible mass transit systems worldwide,” said Gerard Martret, CEO and co-founder of Shotl. “In just a few years, Swvl has established itself as a market leader, with rapid growth and unparalleled tech-enabled offerings. Swvl is ideally situated for expansion into European markets and will immediately capitalize on our local partnerships and brand value. As a company that has made significant strides in advancing sustainable mass transit over the past several years, we are confident that Shotl’s market-leading technology and expertise will greatly contribute to the Swvl platform, advancing our mission to provide superior transportation alternatives for all.”
Subject to customary closing conditions, the transaction is scheduled to occur in the fourth calendar quarter of 2021.
A Look At What SWVL Does
Swvl, a worldwide digital startup based in Dubai, was founded in 2017 by Mostafa Kandil, Ahmed Sabbah, and Mahmoud Nouh to provide a semi-private alternative to public transportation for those who cannot afford or access private solutions. In 10 megacities across Africa, Asia, and the Middle East, the company has constructed a parallel mass transit system that provides intercity, intracity, B2B, and B2G mobility.
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
Concordium, a leading blockchain technology company, and Swvl, Inc. (“Swvl”), a Egyptian provider of mass transit and shared mobility solutions, have announced a strategic agreement to construct revolutionary next generation mass transport systems for the first time.
“Swvl set out to create the mass transit system of the future, for the cities of the future. Our partnership with Concordium will improve the real-time capabilities of our offerings. We will be even better positioned to capitalize on fast-changing customer demands, resulting in quicker and more flexible commuting experiences,” Mostafa Kandil, Swvl Founder and CEO, said.
Mostafa Kandil, Egyptian CEO and founder of Swvl
Swvl, now based in Dubai with an implied, fully diluted equity value of about $1.5 billion offers a semi-private alternative to public transportation for persons who cannot afford or access private solutions.
Swvl announced the signing of a formal agreement for a business combination with Queen’s Gambit Growth Capital (“Queen’s Gambit”) (NASDAQ: GMBT), the first special purpose acquisition company run by women, on July 28, 2021.
Swvl makes transportation safer, more efficient, and ecologically responsible, while also making it accessible and cheap to everybody. Customers schedule rides using an easy-to-use app with a variety of payment choices, and they gain access to high-quality private buses and vans that follow fixed and semi-fixed routes, stations, times, and pricing.
Here Is How The Partnership Will Work
Concordium will provide a blockchain-based technological platform with the goal of improving Swvl’s customers’ mass transit travel experience. The platform is designed to aid in the resolution of the highly complex logistical difficulties inherent in mass transportation, while also boosting Swvl’s efforts toward decarbonization and smart, green mobility.
Concordium’s platform is designed to give the following primary benefits, among others:
Natural ebbs and flows in consumers’ travel needs may be detected more quickly and accurately, and fed into evolving travel routes via Swvl’s dynamic routing capabilities, making trips faster and less expensive.
Swvl’s technology enables the development of interactive relationships with its customers through greater driver monitoring and performance tracking, as well as increased efficiency and quality of service — making Swvl trips even safer and more reliable.
Driver pay can also be better tied to performance, motivating drivers to give the best service possible.
“Mass transit systems are inherently flawed, with inefficiencies that create significant barriers and cause daily commuting to be a struggle. Combining Concordium’s differentiated blockchain technology with Swvl’s cutting-edge mobility platform provides a seamless commuting experience that will change mass transit on a global scale,” Lone Fonss Schroder, Concordium’s chief executive, said.
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
Swvl, an Egyptian ride-sharing startup based in Dubai, has announced that it is going public through a merger with a special purpose acquisition company (SPAC). According to The Wall Street Journal, the mobility company is merging with Queen’s Gambit Growth Capital, a SPAC founded by a group of female CEOs early this year (which claims to be the first women-led SPAC). Victoria Grace, the company’s CEO, is the founder of Colle Capital, a venture capital firm based in New York.
Mostafa Kandil, Egyptian CEO and founder of Swvl
“We have 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,” Mostafa Kandil, the co-founder and CEO of Swvl, said.
“Queen’s Gambit is an ideal partner, who shares our core values and is committed to helping accelerate Swvl’s long-term growth plans. With their partnership, as a public company, we will expand our daily commuting offerings and enterprise TaaS services that remove barriers to seamless mobility for the populations that need it most. In doing so, we will create even greater value for all stakeholders and continue innovating best-in-class technology solutions that improve the universal, daily struggle of mobility for so many,” he added.
SWVL and Queen’s Gambit Growth Capital have signed a formal agreement for a business combination, according to the announcement, which would result in Swvl becoming a publicly traded company on NASDAQ after the proposed deal is completed. The company will trade under the ticker code ‘SWVL.’
Swvl will be the second Middle Eastern business to go public using the SPAC route. Anghami, an Abu Dhabi-based music streaming platform, stated earlier this year that it intends to go public by merging with Vistas Media Acquisition Company, a SPAC.
A SPAC, sometimes known as a blank-cheque corporation, is founded to obtain funds through an IPO in order to purchase and publicize an existing company. It will be the first Egyptian-born technology company to list on NASDAQ (or outside Egypt), as well as the second Egyptian technology company overall (Fawry being the first one).
According to the report, Queen’s Gambit Growth Capital raised $300 million when it was founded in January and another $45 million afterwards through underwriters’ overallotment option. Swvl’s purchase will also involve a $100 million PIPE (private investment in a public firm) from a consortium of investors including Agility, Luxor Capital, and Zain Group. Swvl will now have $445 million in additional capital to invest in its growth and expansion.
“When forming Queen’s Gambit, I was squarely focused on assembling a team of highly successful and strategically-minded women with unparalleled global relationships, to identify and then grow a disruptive platform that solves complex challenges and empowers underserved populations. In Swvl, we have found each of those things and more. Having established a leadership position in key emerging markets, we believe Swvl is ready to capitalize on a truly global market opportunity,” Victoria Grace, Queen’s Gambit Founder & Chief Executive Officer, said.
Swvl, which was founded in 2017 by Mostafa Kandil, Mahmoud Nouh, and Ahmed Sabbah, began as a bus-hailing service in Egypt, allowing users to travel inside a city by booking seats on fixed-route buses. Later, the service was expanded to Kenya and Pakistan, and the company’s headquarters were relocated to Dubai. In several markets, the company now offers intercity travel, car-based ride-sharing, and corporate services. Swvl produced $26 million in annual gross revenue, according to its SPAC presentation, with a negative EBITDA of $29 million (which means the company lost $29 million). It stated that by 2025, it hopes to increase its yearly gross revenue to $1 billion.
Swvl services both consumers and businesses in its major countries of Egypt, Kenya, and Pakistan through Daily, Travel, and Business solutions, however it solely serves businesses in some of the new regions it has just entered, such as Jordan and Saudi Arabia. Swvl’s transportation-as-a-service business offering allows schools, universities, and corporations to create customized transportation alternatives for their students or employees using Swvl’s software and fleet. In the next five years, the company wants to be in 20 countries on five continents.
The Cairo-based business has raised over $100 million to date, including an unannounced fundraising round earlier this year. Vostok New Ventures Global, Beco Capital, Raed Ventures, Sawari Ventures, MSA Capital, Silicon Badia, and Oman Technology Fund are among its prior investors. Its most recent public investment round was a $42 million Series B-2 round in 2019, following which it surreptitiously raised another $20 million in early 2020.
Mostafa had previously worked as a market launcher for the Middle East’s largest ride-hailing company. Swvl co-founders Mahmoud Nouh (COO) and Ahmed Sabbah (CTO) both departed the company to start their own businesses in October 2019 and March 2021, respectively.
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
Egypt’s bus-hailing startup, SWVL, which is already present in Kenya, Pakistan as well as Egypt, has launched operations in Riyadh, Saudi Arabia, its fourth market since it was founded in 2017.
The Egyptian startup is seen as largely secretive about its expansion plans. In early 2018, when it raised tens of millions of dollars in its Series B-1, the startup said that it would use the money to expand to Southeast Asia, starting with Manila in 2019 Q1 but instead expanded to Kenya. In June 2019, the startup also said that it was planning to expand to Nigeria (by mid-July) but later launched operations in Lahore, Pakistan.
Mostafa Kandil, Egyptian CEO and founder of Swvl
In Riyadh, Saudi Arabia’s capital and main financial hub with a population of close to 8 million, Swvl will join forces with other competitors including Uber, Careem, My Taxi, Jahz and Taxi Watani, among others.
In 2018, the Saudi Arabia’s Public Transport Authority (PTA) said there were 20 ride-hailing applications already licensed to run in the kingdom, with government further issuing statements that ride-hailing driving remains exclusively reserved for the country’s nationals.
In 2017, the country passed a royal decree allowing women to drive in the kingdom, a move expected to have a major impact on car transport businesses operating in Saudi Arabia.
SWVL is different from Careem or Uber in that instead of using private cars, the startup confronts the public transport system as whole by allowing commuters to book seats on its growing network of “high-quality” buses (owned and operated by third-parties). SWVL operates bus lines on fixed routes with customers boarding the buses from specific pick-up spots to be dropped at pre-defined (virtual) stations.
Saudi Arabia’s Expansion Further Confirms The Startup Is Not Afraid Of Competition
Swvl’s bold inroads into crowded ride-hailing markets have been one of its greatest strengths from day one.
For instance, although the startup is the first riding app to offer bus services in Egypt, giant transportation startups Careem and Uber had previously offered their own bus services.
Mostafa Kandil, Egyptian CEO and founder of Swvl, has however, consistently noted that the joining of Uber and Careem to the industry has not influenced Swvl’s growth, asserting that Swvl has, instead, witnessed remarkable development since the two competitive players launched.
In 2019, the startup was valued at US$157 million, becoming the second Egyptian company after Fawry to reach these figures.
A Look At What SWVL Does
Founded in 2017 by Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh, Swvl connects commuters with private buses, allowing them to reserve seats on these buses and pay the fare through company’s mobile app. The buses available on Swvl operate on fixed routes (or lines) and are presently available in over 200 routes including in major cities like Cairo, Lahore, Alexandria, and Nairobi.
The startup launched its bus sharing services in Nairobi early 2019 after raising more than US$30 million in 2018.
Although bus-hailing operations have been greatly affected by the coronavirus pandemic, the SWVL app which is available for both Android and iOS users has registered over a million customers who frequently use its services.
SWVL also most recently signed an agreement with Ford motor company to deploy more cars on the road. Ford Transit, which the startup intends to use is already the third best selling van of all times. The startup is already in possession of about 100 Ford Transits. Hazem Taher, SWVL’s Head Marketing Manager, said the vans were ready to go and they’re excited to push them on SWVL’s route.
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
In 2016, Mahmoud Nouh abandoned his ship building venture barely a year into it, and even after raising $300k in just two months of operations. He was headed for SWVL, a bus-booking startup his friend Mostafa Kandil had just started. At that time, SWVL had industry giants, Careem and Uber to confront. Uber alone had more than 40,000 Egyptian drivers working on the platform every month, and new drivers joining up at the rate of 2,000 a week. Somewhere else far away, Ahmed Sabbah, owner of Goyastores, which he had tilled hard at for more than two years, was also about leaving, to join SWVL as Chief Technology Officer.
Yet, four years after taking the risk to join SWVL, both men still have one strong thing in common: quitting even SWVL and moving on.
“Mahmoud has been a major pillar in the company since day one,” SWVL noted in a farewell statement on Nouh in October, 2019. “His contributions to building SWVL from being a small startup in a tiny room to a major player in the transportation scene are countless. He is the mastermind behind building SWVL’s bus fleet and its operations.”
For Sabbah, it was such an emotional moment to leave.
“Yet.. everything in life has a beginning and an end and after four thrilling years, my SWVL ride is ending,” Sabbah wrote in a social media post.
“The SWVL journey has pushed me, and many of us, to be better than we ever thought possible — from challenging us with intense hard work and executing at breakneck speed to tapping into our grit and resilience,” he said.
Even though it is arguably expected that founders would, one day, seek exit from the startups they founded, it is important to comprehensively understand how most African founders, of both existing and non-existing startups, have handled this point in their lives.
SWVL’s three co-founders: L-R -Mostafa Kandil, Mahmoud Nouh and Ahmed Sabbah
Finding A Space On The Board
One recurring thing most African startup founders have done when it comes to exiting startups they founded is to find a space on the startups’ boards of directors.
This is usually the case where moving away from a startup entirely may be counterproductive, especially if the exiting founder previously oversaw the technical or other key departments of the startup, and there have not been adequate succession plans in place to absorb the impact of any exit.
Also, where there is uncertainty as to how the remaining percentage of the shares held by the founder may vest, especially if the founder quits before his or her shares in the company become fully vested, moving to the board may become an option.
Migrating to the board gives founders the chance to assist startups in absorbing the impact of their exit as well as re-negotiate their unvested shares.
Being part of the board, whether in an executive or non-executive director capacity, will also give founders the time to explore other opportunities as there is no limit to the number of companies they can be part of as directors, provided the multi-roles would not hamper the performance of their roles for the startups and that they have negotiated good deals in their contracts of directorship with the startups.
Notable African CEOs have taken the route of board membership upon exit from the startups they founded.
One founder whose exit via the board is worthy of mention is Grant Brooke, former CEO of Twiga Foods, who ran the Nairobi-based agritech startup for 6 years before handing over to Peter Njonjo, who has years of corporate experience, including a 21 year stint at Coca Cola Company where he led the multinational’s West and Central Africa business unit as President.
Upon resignation as CEO of Twiga Foods in 2020, Brooke moved to the board of the startup, and has remained there since then.
The board membership has allowed him to found, in 2020, another startup, Shara, which is building tools for SMEs in Kenya, Nigeria, and Zimbabwe.
This, he would not have been able to do if he were still the CEO of Twiga Foods.
“If my leadership was the period in which Twiga was proving a point that there’s a better way to build food safe and secure markets, Peter’s leadership will be about institutionalizing this way of doing business and scaling it. Peter’s experience in building efficient supply chains and last-mile distribution in over 33 African countries makes him uniquely suited to lead us,” said Grant Brooke at the time he left.
In essence, exiting as a founder via the board may also be a way of giving way for more experienced hands to drive a startup to the next stage.
Every founder wants to feel needed by their company. So there is one thing they just don't want to let go of. Usually the thing they are best at. But often, a specialist will be better than them, and it's better that they oversee that thing.
The best thing Marie Lora-Mungai, former CEO of Buni.tv could do when her startup was acquired by Trace Tv in 2016 was to fall back to Restless Global, a strategic advisory and content development company specialized in the African entertainment space, which she had founded a year before Buni.tv’s acquisition, in 2015.
Similar strategy was used by former Chief Operating Officer of Nigeria’s Jobberman, Olalekan Olude, when he resigned his position with the startup in 2017.
Olude moved that same year to Rovedana, a staffing and payroll financing services platform for SMEs in Nigeria which he had previously founded, and later to CicoServe Payments, a grassroots bank in Nigeria.
Most former CEOs and founders of African startups have equally explored the route of venture capital and angel investing, immediately after quitting their startups.
This is the case of Mark Forrester, former co-founder of WooCommerce, a South African startup that was sold in 2015 to web development company Automattic (WordPress) in a deal estimated to be worth over $30 million.
Forrester has since moved on to become an investor, investing in startups such as IoT security and automation platform Sentian; mobile creativity app Over; community-based security solution Jonga; and online grocery delivery service Yebo Fresh.
No matter what route exiting African founders took, one thread almost always runs through: they already have wall chests of resources and well-drawn-out plans about their next moves.
A majority of them ended up proceeding to found new companies as they had promised in their farewell speeches; with some moving on to entirely different endeavours.
However, it is not often easy for co-founders whose exits were forced, such as in cases of outright dismissal or resignation on the ground of gross misconduct, to move on from their exits.
A year after Kennedy Nganga — the technical person once in charge at Safi Analytics (a Kenya-based smart metering startup) — was asked to go, by foreign co-founders Lauren DunfordandWeston McBride, all appears not be well for the young man, even though he has since moved on to Techpreneur School, a platform that facilitates training and mentoring of upcoming entrepreneurs by experienced ones.
#StartupbillKE#businessnow I only hope this bill will help stem the culture of exploitation and technology theft from local innovators. Still out here fighting for justice about this issue. https://t.co/MoyHGtKqF4
Similar fate seems to have also touched African founders asked to go on grounds of fraud or sexual misconduct.
Ever since Anthony Kariuki, former CEO of the Nairobi-based fintech startup Alternative Circle was asked to leave the startup in 2017 — after barely a one-year stint as CEO— on grounds of sexual misconduct allegations, he has disappeared completely from limelight.
This is also the case for Daudi Were of another Kenyan startup, Ushahidi, who was asked to go in 2017 after nearly a ten-year stint as CEO.
The best way of explaining the after-effects of such disappearances forced by dismissal or crime allegations is that the affected founders were literally caught off-guard and had never, maybe, thought of leaving their startups soon.
In light of that, it is therefore imperative for startup founders to design solid personal succession plans from the outset of their participation in startups.
A good succession plan should cover all the possible permutations of their lives on the startups.
But then, a well-intentioned approach, aimed at first assisting the startup to fulfil its vision and mission should always be preferred, as most times beginning with ulterior motives in mind has, almost always, killed so many startup teams — and startups themselves — around the globe.
Moving In-House Under A Holding Company Structure
This is the second option — apart from moving to the board — often explored by African founders whose startups were acquired.
In most cases, this is enabled by a provision in the acquisition agreement that allows the founder to become automatically employed in a new role at the acquiring company upon acquisition.
The agreement may allow the founder to exit after some time, usually after the acquired startup has properly settled into the acquiring company.
This path has been hugely explored by most South African founders.
Hannes Van Rensburg, former CEO of South African startup, Fundamo City — which was bought by credit card company Visa in 2011 for $110 million — moved over to become Senior Vice President, Visa from 2011 to 2014.
Same for Chris Pinkham, former CEO of Nimbula — which was acquired in 2013 by software titan, Oracle for $110 million. Pinkham went on to Oracle as Senior Vice President, Cloud Product Development from 2013 to 2014.
S/N
NAME OF STARTUP FOUNDER/ BASE COUNTRY OF OPERATIONS
STARTUP/ROLE AT STARTUP
YEAR JOINED STARTUP
YEAR OF EXIT
NATURE AND REASONS FOR EXIT
MAJOR ACTION AFTER EXIT
1
Mahmoud Nouh (Egypt)
SWVL/Chief Operating Officer
2017
2019
Resignation. Reasons: For personal reasons.
Founded in 2020 Capiter, a B2B marketplace that brings together FMCGs, wholesalers, and merchants on one platform.
2
Ahmed Sabbah (Egypt)
SWVL/Chief Technology Officer
2017
2020
Resignation. Reasons: To start a consumer fintech.
Left to start a consumer fintech, which is yet to be launched.
3
Iyinoluwa Aboyeji (Nigeria)
Flutterwave/CEO
2016
2018
Resignation. Reasons: Personal and family reasons.
Moved on to found a community investment firm Future Africa,
4
Tonjé Bakang (Cameroon)
Afrostream/CEO
2014
2017
Termination due to liquidation. Reasons: Startup failure.
Proceeded to become a university lecturer at France’s Sciences Po. Seed investor in SpaceFill, Shipfix, among many others.
5
Barrett Nash (Rwanda)
CanGo(CEO)
2014
2020
Termination due to liquidation. Reasons: Startup failure.
Co-founder/CEO since March 2020 at InfiniteUp, a startup that is digitizing MSMEs across sub-Saharan Africa.
6
Tricia Martinez (South Africa)
Wala/CEO
2014
2020
Termination due to liquidation Reasons: Startup failure.
Proceeded to work for the U.S. Department of Energy’s Artificial Intelligence and Technology Office as a policy fellow since 2020.
7
Etop Ikpe (Nigeria)
Cars45/CEO
2016
2020
Resignation. Reasons: Dispute over startup’s equity structure.
Proceeded to found Autochek, a car listing platform in 2020 as the CEO.
8
Abdulhamid Hassan (Nigeria)
OyaPay/CEO
2017
2019
Termination due to liquidation. Reasons: Startup failure.
Proceeded to Paystack as Product Manager. Left Paystack to found Voyance and later to co-found a Y Combinator-backed fintech API startup, Mono in 2020.
9
Adewale Yusuf (Nigeria)
Techpoint/CEO
2015
2020
Resignation. Reasons: To launch a new venture.
Proceeded to co-found TalentQL, a tech talent-hiring platform.
10
Sim Shagaya (Nigeria)
Konga/CEO
2012
2016
Resignation. Reasons: Became Chairman of Konga’s Board of Directors.
Proceeded to found uLesson, an edtech startup in 2019.
11
Bolaji Akinboro (Nigeria)
Cellulant/Co-CEO
2004
2020
Resignation. Reasons: Allegations for financial impropriety.
No major move announced, but already a Chairman of the Board of Directors at Voriancorelli, a B2B marketplace company since 2020.
12
Ayodeji Adewunmi (Nigeria)
Jobberman/CEO
2009
2019
Resignation Reasons: to pursue a new career in venture investing.
Proceeded to GOKADA as co-CEO; Left Gokada in 2019 for Kudy Financials, Luxembourg as COO since 2020.
13
Kola Aina (Nigeria)
Ventures Platform Hub/Managing Partner
2016
2019
Resignation. Reasons: Moved to the Board.
Proceeded to get on the board of other companies, including that of Ventures Platform.
Proceeded to found Rovedana, staffing and payroll financing services platform for SMEs in Nigeria in 2017; and CicoServe Payments, a grassroots bank for in Nigeria.
16
Nico Stern (South Africa)
IoT.nxt
2015
2021
Resignation. Reasons: There were some suggestions in IoT.nxt’s statement that IoT.nxt’s closer integration with its parents had had at least a partial role in Steyn’s resignation.
No major move reported yet. Stern will however remain a shareholder and board director.
17
Manuel Koser (South Africa)
Zando/CEO
2012
2013
Resignation. Reasons: to co-found Silvertree Capital, a “company builder and venture investor” in African startups.
Co-Founder & Managing Director at Silvertree Holdings, an investment company since 2013
18
Robert Paddock (South Africa)
GetSmarter/CEO
2007
2018
Exit by acquisition. Reason: GetSmarter was sold to US edtech company 2U in 2017 (announced in May) for $103-million plus $20-million in cash. Paddock
Proceeded to found Valenture Institute, an e-learning platform in 2019.
19
Paul McEwan (South Africa)
Kapa Biosystems/Chief Scientific Officer
2006
2016
Exit by acquisition. Reason: The startup was sold to Swiss medical company Roche in 2015 for $445-million.
Proceeded to Roche as the Vice President, Life Cycle Leader, Sample Preparation from 2016 to 2018. Left Roche in 2018. Became an angel investor in Life Science Angels since 2019.
20
Hannes Van Rensburg (South Africa)
Fundamo City/CEO
1999
2011
Exit by acquisition. Reason: Fundamo was bought by credit card company Visa in 2011 for $110 million.
Exit by acquisition. Reasons: Nimbula was acquired in 2013 by software titan, Oracle for $110 million.
Proceeded to Oracle as Senior Vice President, Cloud Product Development from 2013 to 2014; Worked at Twitter as VP Engineering from 2015 to 2017. Co-founded Sailing Umoya since 2020.
22
Vinny Lingham (South Africa)
Gyft
2012
2015
Exit by acquisition. Reasons: Gyft was sold in 2014 to global payment technology solution company FirstData for “above $54-million” according to Lingham.
Proceeded to First Data Corporation as Senior Vice President Product Development from 2014 to 2015. Proceeded to host Shark Tank South Africa from 2016 to 2016. Co-founded Civic Technologies, a blockchain based identity management since 2016.
23
Mark Forrester (South Africa)
WooCommerce
2008
2015
Exit by acquisition. Reasons: WooCommerce sold in 2015 to web development company Automattic (WordPress) in a deal estimated to be worth over $30-million
Proceeded to become investor, investing in startups such as IoT security and automation platform Sentian, mobile creativity app Over, community-based security solution Jonga, and online grocery delivery service Yebo Fresh,
24
Adii Pienaar (South Africa)
WooCommerce/CEO
2008
2013
Resignation. Reasons: Sold his shares in the company to other co-founders, Magnus Jepson, and Mark Forrester to build another company.
Proceeded to found Conversio in 2014, which was acquired by acquisition by CM Group in August 2019. Adii became VP Commerce Product Strategy of CM Group, but left in September, 2020 to found Cogsy, a startup helping Ecommerce brands to optimise their inventory and increase their return on working capital, since October 2020.
25
Rob Stokes (South Africa)
Quirk (CEO)
1999
2016
Exit by acquisition. Reason: Quirk was acquired by advertising giant WPP in 2014 for a reported R350 million to R400-million ($35million to $39 million) at the time of the sale.
Proceeded to assume board chairmanship and directorships positions in several companies –BrandsEye; The Open Knowledge Trust –he founded
26
Grant Brooke (Kenya)
Twiga Foods/CEO
2014
2020
Resignation. Reasons: To assume board role at Twiga Foods.
Proceeded to assume a board position on Twiga Foods, but co-founded Shara, a startup where building tools for SMEs in Kenya, Nigeria, and Zimbabwe since 2020.
27
Anthony Kariuki (Kenya)
Alternative Circle/CEO
2016
2017
Resignation. Reasons: Sexual misconduct allegations
–
28
Daudi Were (Kenya)
Ushahidi (Co-founder)
2008
2017
Resignation. Reasons: Sexual misconduct allegations.
Proceeded to found a company a little known company Mikakati since 2018
29
Kennedy Nganga (Kenya)
Safi Analytics (CTO)
2017
2020
Dismissal. Reason: Allegations of being pushed out of the company by foreign co-founders Lauren Dunford and Weston McBride
Proceeded to found Techpreneur School, a platform that facilitates training and mentoring of upcoming entrepreneurs by experienced ones.
30
Munyaradzi Chiura (Zimbabwe)
Hypercube/Cofounder
2013
2017
Exit by dissolution. Reasons: Hypercube Dissolved by founders.
Proceeded to Flywire Corporation as Payments Consultant Africa since 2017. Currently Head, Rest of Africa Growth at Flutterwave since 2021.
31
Marie Lora-Mungai (Kenya)
Buni.tv/CEO
2009
2016
Exit by acquisition. Reasons: Buni.tv was acquired by Trace Tv.
Proceeded to the board of Buni.tv as a board member since 2016. Also, an angel investor. CEO since 2015 of Restless Global, a Strategic Advisory & Content Development company specialized in the African Entertainment space, which encompasses the Cultural and Creative Industries (CCI) , Sports Business, and Technology, Media, and Telecommunications (TMT) sectors.
When Every Other Thing Fails
African startup founders faced with exit dilemma have also explored different paths, apart from those stated above.
Former CEO of Nigerian ecommerce company Konga, Sim Shagaya, saw a cool-off period — during which he was still sitting on Konga’s board as chairman — of almost three years, returning only in 2019 to launch uLesson, an edtech startup.
Tonjé Bakang, CEO of failed music streaming startup Afrostreams, has since assumed a lecturing role at Sciences Po, a research-based university based in Paris, France. Tonjé is, today, also a serial seed investor.
Tricia Martinez, of failed crypto startup Wala, has equally moved on to work for the U.S. Department of Energy’s Artificial Intelligence and Technology Office as a policy fellow.
However, it is worthy of note that not all founders of failed African startups shunned entrepreneurship entirely, afterwards.
“…I just took another risk leaving one of the leading companies in the AI space in Europe to move back home for no salary but I love every minute of this new hustle!” Wrote Hassan in 2018, on the occasion of the death of one of his first startups.
What Happens To The Unvested Shares?
There are no hard and fast rules about vesting shares, but standard practice is that once the founder has exhausted the period of such vesting and the ownership of the shares have fully accrued to him or her, then no further rules apply except, of course, that the founder is at liberty to dispose of the shares in any manner he or her desires.
Problems however arise where the founder exits before the shares become fully vested in him or her.
The general rule in all cases is, however, that a company has an option to repurchase unvested shares if a co-founder ceases to work for the company for any reason or fails to make the expected contributions he or she has agreed to make.
In any case, the agreement between the founder and the startup may also make room for accelerated vesting, in which case the shares held by the founder go against the natural course of time earlier agreed between the founder and the startup, allowing the founder to be entitled to all the shares due to him or her in a shorter time period.
But this mostly happens if the startup is going through Initial Public Offering (IPO), take-over, mergers and acquisitions, sale of more than half of the company’s assets, among unlimited possibilities.
At the end of the day, what matters in vesting shares is always the agreement between the founder and the startup; and it is important that the founder’s agreement covers this; and at the same time, leaving rooms for future amendments.
This is one way to take care of uncertainties arising out of a founder’s exit.
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
Before now, you would need to hail ride-sharing startup SWVL for trips only within the Nairobi city. Although there was a previous announcement in February this year that the company would be exploring long distance journeys, now, it looks clearer. In a landmark partnership with local matatu cooperatives (saccos), SWVL has made it possible to hail public buses, popularly known as matatus, via the SWVL app for long distance trips say, from Nairobi to Kisumu or from Nakuru or Eldoret to Nairobi.
Dip Patel, the General Manager for Swvl in Kenya
“We are looking to make it easier for Kenyans to make their journeys upcountry, especially as we approach the festive season next month. This desire is what prompted us to partner with the matatu saccos who already provide this service and help them in streamlining the process of filling up their vehicles by giving them a digital platform,” said Dip Patel, the General Manager for Swvl in Kenya.
Here Is What You Need To Know
The long distance rides will be available on the SWVL app and can be booked in the same way as regular rides within the city. All you need to do is pick a date and time as well as your location and destination. The app will then proceed to give you options of the available rides and you can choose the nearest and most convenient time for you.
In the meantime, SWVL customers can travel to a total of twelve upcountry destinations including Naivasha, Nakuru, Molo, Eldoret, Narok, Bomet, Kericho, Kisii, Kisumu, Nyeri, Nanyuki and Machakos.
A Major Win For Matatus Themselves
Perhaps the fear of disruption that came with the arrival of the Egyptian ride-hailing startup, SWVL, in the Kenyan public transport sector has been quelled. Matatus are now part of the grand scheme of things and will, going forward, not only determine the future of SWVL in Kenya, but also its success .
One of the saccos, Metrotrans Sacco — a leading PSV transport Saccos operating in Nairobi — is already leading the new chapter. The union has rolled out 45 additional new buses from Isuzu East Africa with financing from Co-op Bank in form of a lease worth Kes 225 Million. The lease will enable the Sacco to respond to increased demand in their existing routes and to also serve their customers better by offering cashless payments enabled by technology company SWVL that allows users to make and track bookings through the SWVL app.
Swvl recently invaded its Kenyan market with over Sh1.5 billion ($14.5 million) investment to finance an aggressive route expansion plan in Nairobi.
Swvl, already operational on multiple Nairobi routes, has set a target to grow its network to 500 routes served by 1,000 buses.
The app-based public service transport operator which started in Cairo, is seeking to take advantage of Nairobi’s chaotic and largely unreliable public transport system.
“Kenya is a market with a need for a stable solution for the perennial traffic snarl ups and SWVL believes that we can be of great benefit to the local consumer and the transport sector as a whole,” said founder, Mostafa Kandil.
Before now, the tech company has been leasing its vehicles that currently include 11-seater and 14-seater vans as well as 22-seater shuttles at a daily rate of $70 (Sh7,000) and $150 (Sh15,000) to ply the various routes. The company tops up the daily collection if the earnings for the day are less than the daily leasing amount, but collects any income above the agreed rate.
The app-based service allows users to book trips using their mobile devices, which notifies them of the nearest pick-up point, price and time by the bus.
The driver’s contact and registration number of the vehicle as well as live map update appear on the app interface for easy identification once the buses arrive.
In early October 2019, Kenya’s National Transport and Safety Authority (NTSA), the authority in Kenya in charge of road use and safety asked SWVL and Little Shuttle to cease operations or face arrests for operating under Tour Service License but engaging in commuter services.
SWVL’s license was restored in May this year.
“We aim to continue our operations and we are very pleased about the consideration of the regulatory framework to incorporate technological developments coming up in the industry,” said SWVL’s General Manager, Dip Patel.
The firm says its popular routes include Ruiru to the CBD/Upper Hill, Karen to CBD/Westlands via Upper Hill, Ongata Rongai to Westlands/CBD via Upper Hill, Ruiru to Westlands, Ndenderu to CBD/ Upper Hill, and Kikuyu to CBD/ Upper Hill.
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
