The migration to the internet is coming at a cost. Egypt-based ride hailing app SWVL has reported hack into its data infrastructure which has exposed the personal information of the startup’s passengers including emails, names and phone numbers.
“On the 3rd of July, SWVL became aware of the unauthorised access to our system. The investigation into the breach is still underway, but at this stage, it is clear the data which was compromised is restricted to names, email addresses, and the phone number,” read a notice by SWVL. “Rest assured that our investigation ensures that passwords and credit card information were not affected.’’
Here Is What You Need To Know
The app on Monday evening notified customers of the security breach and the security measures it deployed after attackers gained access on its computer network.
SWVL advised customers to change their passwords on the app and on any other site where they had used the same.
Hackers use the information from data breaches to access other linked accounts on other sites with similar password combinations gaining credit or debit card information or use the accounts to fleece contacts of the account holder.
This is not the first ride hailing app to become a victim of a data breach. Back in 2016, Uber was hacked and information belonging to 57 million riders and drivers accessed including the names and driver’s license numbers.
Yahoo experienced multiple data breaches between 2013 and 2016 where three billion accounts were affected. A security researcher found an unprotected server with a database containing 419 million phone numbers belonging to Facebook users.
Zynga — creators of Words with friends and Draw something — were also breached last year with 218 million accounts
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.
Swvl, the Egypt-headquatered ride-sharing startup founded by Mostafa Kandil is back in operations after months of ban from the Kenya ’s National Transport and Safety Authority. This is one classic case of policy uncertainty in doing business in emerging markets, where startups can be swept off the feet without much ado. Although Swvl’s General Manager Kenyan operations, Dip Patel says this is a major new strength for the company which is looking to recover from the financial losses incurred from the ban, the covid-19 pandemic has further complicated issues.
Mostafa Kandil, co-founder, SWvl
Once we exit the lockdown, we will be able to steadily bring back our operations. From here, we can show our corporate customers that we have met all the regulatory requirements. 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.
In early October, 2019 Kenya’s National Transport and Safety Authority (NTSA), the authority in Kenya in charge of road use and safety asked digital public transport services SWVL and Little Shuttle to cease operations or face arrests for operating under Tour Service License but engaging in commuter services.
Swvl’s Operation In Kenya
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 that launched in Nairobi on a test basis seven months ago has already signed up 150 buses on 100 city routes.
The firm, 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.
The tech company leases the 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. It 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.
“We’re building a mass transit system. The investment will keep us going in this market,” said Shivachi Muleji, SWVL general manager for Kenya.
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.
According to Mr Muleji, the company is in negotiations with local Ford dealers and a financial institution to provide vehicles at 20 percent cheaper than the market rate as well as financing options for drivers. This is aimed at growing its bus network to meet the demand of the planned route expansion. The app company, which has received pushback on some of its routes from PSV (matatu) operators, says it is engaging some Saccos in the sector to invest in the business.
The service currently charges a flat rate of Sh200 but has plans to offer distance-based pricing at the end of 2019 or early next year.
“Kenyans are picky consumers so you have to offer a premium service for the extra 10 percent you charge,” said Mr Muleji.
Tech-based solutions in the transport sector have been causing a ripple locally with Uber making its entry in the taxi business several years ago despite protests by taxis at the onset.
Kenyan-based Little Cab also offers a similar shuttle service in the market while Safiri is still in the pilot stage of data collection.
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.
SWVL is offering Kenyan commuters free rides for food supplies and essential travels for those in critically needed jobs during this Coronavirus crisis period.
SWVL general manager in Kenya Dip Patel
“We are here to support our fellow Kenyans during this difficult time for our country. We will continue to operate on many high-traffic routes, to enable people shop for food supplies and continue with essential travel.” SWVL general manager in Kenya Dip Patel said.
Here Is All You Need To Know
The offer, by the online passenger service vehicle firm is however only available in areas with the most demand for necessary commutes.
He said users will receive notification of these routes via their app but encouraged users to stay home and avoid non-essential commuting.
The company is limiting its normal operations but ensuring it will provide “must-have routes” services to cover areas with demand for necessary commutes during this time of crisis.
Commuters that must travel for essential work will use the free ride service by using the HERE4YOU promotional code and free rides will also be reflected in the SWVL app.
SWVL has also adopted new measures to operate in line with the directives issued in regard to public transport.
In accordance with the directive to limit the number of passengers per vehicle, the company will cap each vehicle’s booking capacity at 60 per cent.
This will ensure enough space for social distancing in each vehicle, additionally, all vehicles will maintain an open window policy to aid in decreasing the risk of contracting the virus and hand sanitisers will also be made available to bus operators for their passengers.
The company is urging commuters to make use of their in-app wallet, whenever needed, as a cashless payment option for their trips to limit the exchange of physical currency.
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.
He could be contacted at udohrapulu@gmail.com
When Venture Capital firm Vestox New Ventures participated in Swvl ’s last Series B-2 $42 million funding, little did it know that it was becoming part of a never-before-seen future in the African transport ecosystem. If Egypt’s Swvl continues in the manner with which it has been known in recent times, it would most probably be the only African startup in the transport sector to reach a unicorn status in the next 7 years or more. At the last count, Swvl, the Egyptian ride-sharing startup, is now over $160 million in value, beating any known Africa-owned transport or logistics startup both in funding and rate of expansion. First in Egypt, then quickly in Kenya and Uganda, before shooting off to Pakistan, with hopes of sealing off 2020 with major expansion to the Philiphines, Bangladesh, Indonesia or Nigeria, Swvl is finally home to roost. In the highly fragmented and chaotic African transport sector, if Swvl gets it right, it would care less about fintechs or other short-term money-spinning initiatives.
‘‘We believe the overall target of $1 billion in Gross Merchandise Value by 2023 is achievable,’’ notes Vestox, in a recently published financial report. ‘‘Egypt alone could become worth at least $500 million and, if successful in Lahore, Karachi, Nairobi, Lagos and Johannesburg, this upside obviously multiplies,” the report further reads.
The report is further optimistic given that overall total addressable market in emerging markets’s transport sector is estimated to be at some $150 billion, with Swvl’s cohorts and bus lines in Cairo reaching a 60%+utilization rate, Swvl is headed for a clear path to gross margins which is close to 30% over time, higher than taxi-hailing at roughly 20%. This would likely warrant higher multiples for this type of business, says the report.
It is however not rocket science that the startup has come this far. Swvl’s success rate could be attributed to the following factors:
A Compelling Product That Adjusts To The Cultural Behaviour Of A City
‘‘Better than a public bus ✅ Cheaper than an Uber ✅ WiFi equipped ✅ Comes on time, every time.
This is what Mostapha Kandil and his team got right. A former employee of the over $2 billion valued Careem, now acquired by Uber in a $3.1bn deal, Mostapha Kandil notes that around the world, public transportation is a loss-making machine. If you can take this load off the government and privatise it in a way that is super cheap and create job opportunities, you are revitalising a sector, he said. To address this, Swvl looked at the following metrics:
Cairo, where Swvl would launch its pilot project, is Africa’s most populous metropolitan city, boasting a population of over 20 million people, with every highway, road, and alleyway clogged with cars and motorbikes spewing fumes into the air.
The most used, and most important, part of Cairo’s transit system is the microbuses, a network of semiformal private vans that are ubiquitous on the streets of Cairo (and most African cities). While dirty, cheap and with lines all over the city, microbuses are known for driving at dangerous speeds, packing in as many passengers as they can, and ignoring traffic laws.
With Egypt already one of Uber’s fastest growing markets in the world at the time of Swvl’s launch, with 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, there was no gain fighting Uber already with the monumental capital base.
Swvl was therefore launched as a product that would find a niche, almost avoiding Uber’s model which most times is expensive and does not often bring the 27. 8% of Egypt’s population that were living below poverty line into its net. The Swvl product would however still retain the city’s culture of minibuses but in a disruptive way. This strategy hoped to reduce the number of cars on Egypt’s congested highways because the cleaner the mode of transport, the more attractive it would be for upper class users.
Swvl then works by connecting commuters with private buses, allowing them to reserve seats on these buses and pay the fare through the company’s mobile app. The buses available on Swvl operate on fixed routes (or lines).
So when Mostapha Kandil and his team pulled the trigger, a different product was launched, way out of Uber or Careem’s way, and way into the culture of the city.
In A Crowded Ecosystem, Startups Need Enough Funding To Stick Out
Mostapha Kandil didn’t just quit Careem to be a watcher. Not doing feasibility studies of the market he was about to enter would most probably mean harm and dead on arrival for Swvl. At the time Softbank made an investment in Uber in 2017, Uber was already overshooting a valuation of about $48 billion. Careem, the Uber of the Arab world had already concluded its US$350 million Series D round, based on a $1 billion valuation for the company. Indeed, to illustrate the extent of Careem’s influence, Swvl’s first round of funding saw Careem investing $500,000 for a minority stake in the company, although Careem’s investment could best be described as a parting gift to Kandil who was previously an employee in Careem.
To further show that Swvl’s team was mindful of power of funding in confronting industry giants in the likes of Uber and Careem, of the total amount of about $686.4 million raised by African tech startups in 2018, Egypt got a share of $68 million. Out of Egypt’s share, SWVL got about $38 million backed by some of top regional VCs including BECO Capital, Raed Ventures, Oman Technology Fund, and global names like Endeavor Catalyst, making the startup the most-funded Egyptian startup.
Kandil said the company is seeking to raise more than $100 million in a financing round in the first half of next year, and is targeting a $1 billion valuation in the next five years.
This long-term focus on sustained funding ensured that when Uber and Careem entered the Egyptian public bus service as Swvl, Swvl had already captured a significant market share and had enough capital. Swvl’s application has been downloaded for well over 360,000 times on Google play store and Apple iStore. The platform completes 100,000 rides monthly.
“This year (2019), we have entered about seven new cities and next year we are targeting another 10 to 20 new big cities,” Kandil said. “We aim to reach one million trips a day in Egypt over the next five year.”
Although with Uber’s acquisition of Careem, Swvl may be headed for a more stiff fight for a market share in Egypt, the startup’s expansionist agenda has kept it far away from attrition.
‘Obviously, I am very happy about the fact that my team and I have reached this far in such a small amount of time,’’ Kandil said. ‘‘When we first came into this space, everyone thought we are crazy. They thought we are taking on Careem & Uber and we wouldn’t be able to survive. No investor was willing to take us seriously. This investment…proves that we can actually make it.’’
Swvl’s Team Executes Well And At High Speed
Mostapha Kandil built a strong team in Swvl. When Careem made its first investment in the startup in 2017, it noted that the team run, learn and develop at a very high pace and high agility. This is perhaps what has kept Swvl ahead of other startups started in the same year. In early 2019, Swvl announced plans to pour over $14 million in Kenya. The company partnered with BRCK for free wifi in its buses in the East-African country. In June 2019, the company raised US$42 million for its expansion in Africa. In July 2019, it expanded its operations to Pakistan, starting with Lahore. In September, it expanded its operations to Karachi, and Islamabad. The company has also announced that it has plans to invest $25 million in Pakistan.
‘‘Previously at Rocket and Careem, Mostafa Kandil has built a team that executes well and at high speed,’’ says Vestox stated in its published financial report on why it was part of Swvl’s Series B-2 $42 million round. ‘‘In fact, we believe that Mostafa may be the first Arab (and indeed African ) tech entrepreneur that builds a global product.’’
One of Kandil’s strategies is never to over-engineer everything. Just get it done, he said. You’ll figure it out on the way. Kandil said he learns more by learning faster. If you do 9 experiments a week and your competitor does 10 experiments, then your competition ends up learning 52 times more over a year, he said.
There Is Something About Swvl’s Partnerships
What makes Swvl different from its competitors is because of its series of partnership deals. The startup recently signed an agreement with Ford motor company, to deploy more cars on the road. The agreement will combine the brilliance of the Ford Motor Transit, world’s best-selling van brand, with an app-based mass transit system that enables commuters in Egypt’s major cities to enjoy an affordable, convenient, safe and reliable alternative to existing transportation services. Ford Transit, which the startup intends to use is already the third best selling van of all times. SWVL 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 routes.
This agreement not only gives SWVL an advantage within the Egyptian private transport market, it also, by some distance, allows it to broaden its reach in the MENA (the Middle East and North Africa) market.
‘‘I think we are in uncharted territory when it comes to expansion, when it comes to growth for an Egyptian startup,’’ Kandil said. ‘‘We feel that this is our responsibility, and we are committed to bringing what we have done in Egypt, scaling it even further and bringing it to the rest of the emerging markets.’’
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
End of the road for Egypt’s transportation startup Swvl’s co-founder and Chief Operating Officer Mahmoud Nouh. According to tech publication Menabytes, Nouh was leaving to pursue “new personal goals”.
Mostafa Kandil, Swvl’s co-founder and CEO
“Mahmoud has been a major pillar in the company since day one. 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,” Swvl noted in a statement.
The End Of An Era
In 2017, Mahmoud co-founded the Egyptian transportation startup with Mostafa Kandil and Ahmed Sabbah.
“Mahmoud has decided to move on with his career pursuing new personal goals. We will definitely see him in the startup scene very soon building his next big idea. We are very sure that Mahmoud will keep inspiring all of us and will forever have Swvl as his second home and family,” the statement added.
Mostafa Kandil, Swvl’s co-founder and CEO, also confirmed that Mahmoud had also resigned from Swvl’s board. He also explained that they’ve already hired a replacement and would be announcing the details at a later time.
Mahmoud still holds a stake in the company. We were unable to confirm how much it is but the three co-founders (between them), according to a one-month-old interview, own 30 percent of the company, Mostafa Kandil, Swvl’s co-founder and CEO had revealed.
It is also not clear if this (sort of) early exit from the company has had any effect on Mahmoud’s equity. In many cases, startups use two to four years of vesting for founders to be able to earn their entire stake in the company.
“We will continue to do everything we possibly can to solve the public transportation challenge and provide the experience everyone is looking for. We will continue to encourage and support everyone to pursue their dreams and will always have this in our company’s culture and DNA,” the statement by Swvl concluded.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
Swvl just made in roads into Kenya, but all that has been put to a stop by Kenya’s National Transport and Safety Authority (NTSA), the authority in Kenya in charge of road use and safety. Digital public transport services SWVL and Little Shuttle were asked to cease operations or face arrests for operating under Tour Service License but engaging in commuter services.
“We have shut down their (Little and SWVL) licenses because there are comprehensive regulations on how to operate a PSV,” NTSA director general Francis Meja said.
Here Is All You Need To Know
SWVL and Little Shuttle were poised to disrupt the public service sector by providing booking options, extra comfort and scheduled departure times in the chaotic segment.
In a notice from the NTSA Deputy Director Communications Dido Guyatu, the authority said it has blacklisted specific vehicles operating under the two companies and their TSL invalidated.
NTSA indicated that both firms had been notified of the suspension of operations until the necessary licenses for operating PSV’s were obtained or an exemption from the authority.
“Let them just follow the law so that we can facilitate them to do business in Kenya. Let them come to us… we are open for discussion to allow them do business in Kenya. It’s a fact that you cannot do business in Kenya without a proper license,” said Mr Meja.
In his response, Little Shuttle CEO Kamal Budhabhatti said the company is seeking audience with NTSA on a way forward.
“The buses we operate have countrywide TLB license, which allows us to move on any route. We do not operate as a matatu on fixed route. Our route is based on supply and demand software technology,” he said.
Compliance With The Suspension
A spot check by Nairobi News on Tuesday on Tuesday in Nairobi established that SWVL was still ferrying passengers despite the suspension.
The company’s General Manager in Kenya, Shivachi Muleji, said they are in talks with the government to ensure that they are fully compliant.
Egyptian start-up app SWVL currently has 150 buses on 100 city routes and last month indicated that it would inject Sh1.5 billion into the Kenyan market.
Meanwhile, it is still unclear when Little Shuttle will return to the road.
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.
Swvl’s Operation In Kenya
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 that launched in Nairobi on a test basis seven months ago has already signed up 150 buses on 100 city routes.
The firm, 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 Mr Kandil.
The tech company leases the 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. It 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.
“We’re building a mass transit system. The investment will keep us going in this market,” said Shivachi Muleji, SWVL general manager for Kenya.
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.
According to Mr Muleji, the company is in negotiations with local Ford dealers and a financial institution to provide vehicles at 20 percent cheaper than the market rate as well as financing options for drivers. This is aimed at growing its bus network to meet the demand of the planned route expansion. The app company, which has received pushback on some of its routes from PSV (matatu) operators, says it is engaging some Saccos in the sector to invest in the business.
The service currently charges a flat rate of Sh200 but has plans to offer distance-based pricing at the end of 2019 or early next year.
“Kenyans are picky consumers so you have to offer a premium service for the extra 10 percent you charge,” said Mr Muleji.
Tech-based solutions in the transport sector have been causing a ripple locally with Uber making its entry in the taxi business several years ago despite protests by taxis at the onset.
Kenyan-based Little Cab also offers a similar shuttle service in the market while Safiri is still in the pilot stage of data collection.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
Barring any last minute changes, Egyptian transport technology startup Swvl will expand into two cities in Pakistan in the next two weeks and begin operations in Nigeria’s commercial capital Lagos before the end of the year, its chief executive.
Co-founder and CEO Mostafa Kandil.
“We will enter Lagos before the end of the year, and our eyes are on Dar es Salaam and Abidjan,” co-founder and CEO Mostafa Kandil told Reuters. ‘‘The firm is also planning to launch in other South East Asian markets, he added.’’
Here Is All You Need To Know
The firm, which operates buses along fixed routes and allows customers to reserve and pay for them using an app, will also expand into Manila in the first half of next year, Kandil added.
Kandil said the company is seeking to raise more than $100 million in a financing round in the first half of next year, and is targeting a $1 billion valuation in the next five years.
Since its launch in April 2017 Swvl has secured the biggest round of funding for a tech start-up in Egypt.
“We were a company worth about $2 million two years ago and our paid-up capital is now $80 million,” he said.
Kandil said he hoped Swvl would eventually go public, but did not say on which stock exchange. He said he would in the longer term also consider a buyout offer from the likes of ride-hailing giant Uber (N:UBER).
Kandil, 25, said the company has been losing money, but expects to turn a profit in two to three years.
“This year we have entered about seven new cities and next year we are targeting another 10 to 20 new big cities,” Kandil said.
The Cairo-based firm, which is due to move its headquarters to Dubai in November, launched in Nairobi about six months ago and began operations in Lahore in July.
“We aim to reach one million trips a day in Egypt over the next five years,” said Kandil.
He and two other young Egyptian co-founders, Mahmoud Nouh and Ahmed Sabbah, own more than 30% of the company, he said.
The rest is held by 17 investment funds, including U.S.-based Autotech Ventures, Sweden’s Vostok New Ventures, Oman’s sovereign wealth fund, the UAE’s BECO Capital and China’s MSA Capital.
The Swvl app, which has fixed bus routes, uses the passenger’s location and destination to determine the shortest possible trip time based on the nearest bus stop.
Uber and regional competitor Careem began operating their own bus services in Egypt in late 2018, competing directly with Swvl.
About Swvl
Founded in 2017, 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).
The report by Vostok New Ventures, notes,”Swvl offers a premium on-demand bus service with third party supply. The algorithm plans the most efficient routes and the most efficient bus stops for peak hours, and more flexibility is possible during off peak hours. Network effects arise through the snowball of the more users that are attracted to the service, the more bus owners will want to offer their supply, the more bus supply the more routes etc., the more customers etc.”
It won’t be a fair comparison but to give you some context, Careem had raised its $60 million round (Series C) at a valuation less than $200 million in November 2015, over three and half years after the company was founded.
Swvl is now in the same territory both in terms of total investment they’ve raised so far and the valuation, in almost two years.
The VC landscape in MENA is entirely different today with a lot more options when it comes to raising Series A/+ rounds so the funding is relatively easier to come by (than it was when Careem raised money) but what Swvl has achieved is still a very big feat.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world
The disruption game is on. Swvl has raised more money and it is currently staging a major feat in Kenya. Swvl riders in Kenya will now save their MBs while onboard Swvl buses, as well as have access to online entertainment, similar to the experience you have onboard a plane with mini TVs sticking into your faces.
Here Is All You Need To Know
This innovation is by way of a partnership with BRCK, a Nairobi-based startup.
The partnership will see BRCK installing free WiFi and online entertainment on its buses in Kenya.
The Kenyan BRCK startup has developed a rugged, self-powered mobile WiFi device for internet connectivity in areas with poor infrastructure.
These WiFi routers are being installed by BRCK in Swvl buses to have riders access the internet using Moja, a free WiFi network BRCK that also comes with entertainment content including Music, TV shows, cartoons, and books.
The users can access free content by downloading Moja’s Android app.
BRCK has already installed its routers on 15 Swvl buses and is expected to take this number to 700 by 2020.
Swvl is paying a monthly fee to BRCK for installation and maintenance of the routers.
Top 10 Startup Funding Africa, 2019
Extension To Other Markets Outside Kenya
Swvl and BRCK have not confirmed if they plan to extend their partnership to other markets where Swvl operates.
BRCK’s network is already available on a large number of minibuses (Matau) in Kenya and Rwanda with over 445,000 unique monthly active users, TechCrunch reported citing company data.
Swvl, since launch in 2017 in Cairo, has expanded to Alexandria, Nairobi, and Lahore, with tens of thousands of daily bookings in these markets. The startup had recently raised $42 million in one of the largest tech investment rounds of MENA. Careem had also announced last month that it will be providing free WiFi to all the riders in UAE.
This is a classic way startups can effectively leech on to the existing value chain.
Swvl’s Business Model
SWVL’s goal is to make it easier for Egypt’s residents to book bus rides at a fixed rate on existing routes.
Users schedule trips, pay online or in cash and are given virtual boarding passes.
Even with fierce competition from the likes of Buseet and Uber vying into premium public transport service, SWVL’s application has been downloaded for well over 360,000 times on Google play store and Apple iStore.
The platform completes 100,000 rides monthly.
It was the first company to introduce the service in Egypt in 2017 before Careem and Uber joined the sector late last year.
Swvl is however different from its competitors because of its series of partnership deals. The startup’s credit facility agreements with Nasser Social Bank and EFG Hermes Bank, and after-sales support and maintenance services with Ford-trained technicians are some of these moves.
What Egyptian SWVL users think about the startup is its priority on affordability, comfort, and safety.
Not Afraid Of Competition
Although Swvl is the first riding app to offer bus services in Egypt, giant transportation startups Careem and Uber have recently offered their own bus services.
Mostafa Kandil, Egyptian CEO and founder of Swvl, has however noted that the joining of Uber and Careem to the industry has not influenced Swvl’s growth asserting that they have witnessed remarkable development since the two competitive players have launched. In 2018, the startup was valued at nearly US$100 million, becoming the second Egyptian company after Fawryto reaches these figures.
The startup has 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. SWVL 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
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Egypt’s Swvl is coasting home big time. The startup is never looking back. Its next bus stop is Lahore, Pakistan ’s capital. Watch out for how the two-year startup is invading Uber, Careem and Airlift’s territories and raising huge funds to scale its operations. Mustafa Kandil is indeed never looking back. Swvl’s wind is gradually sweeping strong. The two-year-old startup is now in Egypt, Kenya, Pakistan, and counting.
An In-depth Look At The Momentum
This move by Swvl, the Cairo-headquartered app-based bus booking startup to Pakistan makes Pakistan Swvl’s third market after Egypt and Kenya.
Swvl had announced plans to expand to Pakistan earlier this month.
The Egyptian startup seems to have developed a habit of being secretive about their expansion plans (which makes sense).
In early 2018, when Swvl raised tens of millions of dollars in its Series B-1, the startup had said that it will use the money to expand to Southeast Asia, starting with Manila in 2019 Q1 but they actually expanded to Kenya which was never revealed previously.
Last month, Swvl said that it is planning to expand to Nigeria (by mid-July) but now we’re learning about their Pakistan expansion.
Founded in 2017, Swvl dubs itself as a private premium alternative to public transportation enabling riders to book seats on its network of “high-quality” buses (owned and operated by third-parties). The startup operates bus lines on fixed routes with customers boarding the buses from specific pick-up spots to be dropped at pre-defined (virtual) stations.
The Startup Is Fully On Ground In Lahore and Ride Sharers Are Invited To Place Bookings
Although Swvl has not shared the details about the number of lines and buses its operating in Lahore, Lahore city is, however, Pakistan’s second-largest home to over 10 million people and is similar to Swvl’s home market Cairo in many ways.
Both the cities have a poor public transportation system (things in Lahore have improved lately with the government-run bus rapid transit service but it only covers a specific part of the city), long commute times, and traffic congestion is some of the similarities the two cities share.
And that is why both the cities offer a great opportunity to startups like Swvl to solve some of these issues.
Expect A Stiff Competition But An Easy Triumph
Swvl is not the first player in this category in Pakistan. Airlift, a local startup that was launched earlier this year and is in the process of closing their first investment round has already gained decent traction in Lahore (and is apparently available in Pakistan’s largest city Karachi as well).
But Swvl obviously has the resources to take all these players on. Backed by some of top regional VCs including BECO Capital, Raed Ventures, Oman Technology Fund, and global names like Endeavor Catalyst, Swvl has raised over $80 million in VC money to date which makes it one of the best-funded startups in MENA and the best-funded startup in this category.
Pakistan might be a new market for Swvl but having worked there earlier, their team has enough know-how about the dynamics of local transportation ecosystem. Mostafa Kandil, in his previous role as Market Launcher for Careem, has launched different cities in Pakistan. Swvl’s Head of Global Expansion Shahzeb Memon, a Pakistani national, was previously with Careem (Pakistan) serving them as Supply Manager before joining Swvl in 2018.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
Egypt’s Swvl, a mass-transit system that enables riders heading in the same direction to share a ride in a van or bus, has raised US$42 million as it looks to expand into other parts of Africa, including Nigeria.
Its latest round of investment is the largest ever secured by an Egyptian tech startup, beating its own record, and is co-led by Vostok Ventures and BECO Capital. Also participating are Arzan VC, Autotech, Blustone, Endeavor Catalyst, MSA, OTF Jasoor Ventures, Sawari Ventures, and Property Finder chief executive officer (CEO) Michael Lahyani.
The funding will see Swvl continue to solidify its position as a leader in building tech-enabled public transportation. It already facilitates hundreds of thousands of rides each month, serving tens of thousands of customers on its network of more than 200 routes in Cairo and Alexandria in Egypt, and Nairobi in Kenya. Other African launches are planned, while Swvl is also launching an R&D facility in Berlin, Germany.
“The plan is to be in at least two or three more African cities by the end of the year,’’ Mostafa Kandil, the founder and chief executive officer, said. “Lagos, Nigeria, is most likely the next market.’’
Not Afraid Of Competition
Although Swvl is the first riding app to offer bus services in Egypt, giant transportation startups Careem and Uber have recently offered their own bus services.
Mostafa Kandil, Egyptian CEO and founder of Swvl, has however noted that the joining of Uber and Careem to the industry has not influenced Swvl’s growth asserting that they have witnessed remarkable development since the two competitive players have launched. In 2018, the startup was valued at nearly US$100 million, becoming the second Egyptian company after Fawryto reaches these figures.
The startup has 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. SWVL 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.
The startup launched its bus sharing services in Nairobi early this year after raising more than US$30 million in 2018 at a valuation of approximately US$100 million.
Founded in 2018 by Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh, Swvl is presently available in 200 routes between Cairo, Alexandria, and Nairobi.
To date, the app which is available for both Android and iOS users has registered over a million customers who frequently use their services.
Charles Rapulu Udoh
Charles Rapulu Udoh is a Lagos-based Lawyer with special focus on Business Law, Intellectual Property Rights, Entertainment and Technology Law. He is also an award-winning writer. Working for notable organizations so far has exposed him to some of industry best practices in business, finance strategies, law, dispute resolution, and data analytics both in Nigeria and across the world.
