Mobility company Swvl plans to go public in US$1.5bn merger with Gambit Growth Capital

EGYPTDubai-based mobility company Swvl has announced plans to go public through a reverse merger with Queen’s Gambit Growth Capital, a special purpose acquisition company (SPAC).

Queen’s Gambit Growth Capital was created earlier this year by a team of female executives (which claims to be the first women-led SPAC). Its CEO Victoria Grace is the founder of New York-based VC fund Colle Capital.

The two companies have entered into a definitive agreement for a business combination that would result in Swvl becoming a publicly listed company on NASDAQ after the completion of the proposed transaction, noted the statement adding that the company will trade under the ticker symbol ‘SWVL’.

Swvl will be the second Middle Eastern company to take the SPAC route to public markets. Abu Dhabi-headquartered music streaming platform Anghami had announced earlier this year that it plans to go public by merging with a SPAC, Vistas Media Acquisition Company.

“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,” Victoria Grace, Queen’s Gambit Founder & Chief Executive Officer, commenting on the merger, said.

“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.”

“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 – Founder & Chief Executive Officer, Queen’s Gambit

A SPAC is also known as a blank-cheque company and is formed to raise money through an IPO with the aim to buy an existing company and take it public. It will be the first Egypt-born technology company to go public on NASDAQ (or outside Egypt) and the second Egyptian technology firm overall to list (Fawry being the first one).

Queen’s Gambit Growth Capital raised US$300 million in January this year when it was formed and another US$45 million at a later point through underwriters’ overallotment option, noted the report.

The deal with Swvl will also include a PIPE (private investment in a public entity) of US$100 million which will be put in by a group of investors including Agility, Luxor Capital, and Zain Group. What this means is that Swvl will have US$445 million in fresh capital to invest in its growth and expansion.

“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 in statement.

“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.”

Founded in 2017 by Mostafa Kandil, Mahmoud Nouh, and Ahmed Sabbah, Swvl started as a bus-hailing service in Egypt, enabling users to travel within a city by booking seats on buses that run on fixed routes. It later expanded the service in Kenya and Pakistan and moved its headquarters to Dubai.

The company today also offers inter-city travel, car-based ride-sharing, corporate services, in different markets. According to the financial information in its SPAC presentation, Swvl made US$26 million in annual gross revenue with a negative EBITDA of US$29 million (which means the company lost US$29 million). It said it aims to grow its annual gross revenue to US$1 billion by 2025.

The Cairo-born startup has raised over US$100 million to date including a funding round earlier this year (that wasn’t announced publicly).

Its previous investors include Vostok New Ventures Global, Beco Capital, Raed Ventures, Sawari Ventures, MSA Capital, Silicon Badia, and Oman Technology Fund.

It’s last publicly announced funding round was US$42 million Series B-2 in 2019 – after which it had quietly raised over US$20 million in early 2020 as well.

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