Dubai-based Swvl to go public through $1.5bn SPAC deal

The Cairo-born tech-enabled mass transit company is set to go public through a merger with female led-blank cheque company Queen’s Gambit Growth Capital

Swvl is merging with blank cheque company Queen’s Gambit to go public. Swvl

Dubai-based Swvl will become the second technology start-up from the Middle East to list on the Nasdaq through a special purpose acquisition company but the first to have a $1.5 billion valuation, the company said on Wednesday.

The Cairo-born mass transit and shared mobility services provider is set to go public through a merger with Queen’s Gambit Growth Capital, the first SPAC that is led entirely by women.

The combined public company will be named Swvl Holdings Corporation and is expected to list under the ticker symbol SWVL. The transaction is expected to close in the fourth quarter of 2021.

“Dubai-headquartered Swvl is the first Middle East $1.5bn Unicorn to list on Nasdaq US, founded by Mostafa Kandil, 28-year-old entrepreneur,” Sheikh Mohammed bin Rashid, Vice President and Ruler of Dubai, said in a tweet.

“Dubai’s impact on the global start-up scene shows the vision and spirit of the region’s youth in shaping tomorrow’s businesses.”

Swvl, which was co-founded by Mr Kandil in 2017, allows commuters to reserve seats on private buses operating on fixed routes and pay fares through its mobile app. The start-up, which uberises mass transit, currently operates in 10 cities in Egypt, Kenya, Pakistan, the UAE, Saudi Arabia and Jordan.

More than 1.4 million riders have booked over 46 million rides to date with thousands of drivers on Swvl’s platform, the company said. Swvl said it earned approximately $26m in revenue last year and is expecting to earn $79m in revenue this year.

“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,” Mr Kandil said.

Queen’s Gambit was created earlier this year by a team of female executives and is led by Victoria Grace, the founder of New York-based venture capital fund Colle Capital.

“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,” said Ms Grace, Queen’s Gambit founder and chief executive.

The transaction will provide gross proceeds of up to approximately $445 million to the combined public company.

Key investors include Agility, Luxor Capital and Zain Group, which put in $100m through a PIPE (private investment in a public entity).

Swvl has raised over $100m to date, with its last publicly announced funding round amounting to $42m in 2019.

It is the second company in the Middle East to go public through a SPAC listing. Abu Dhabi-based music streaming platform Anghami said earlier this year it plans to go public by merging with Vistas Media Acquisition Company.

Aramex, the Middle East's biggest provider of logistics and transportation solutions, which was founded by Fadi Ghandour in 1982, became the first company from the Arab world to list on the Nasdaq in 1997. It later delisted in 2002 and went public again in 2005 on the Dubai Financial Market.

Blank-cheque companies, also known as SPACs, are those with no commercial operations and trade without business fundamentals. They are formed with the intention of raising funds through an initial public offering and seek to acquire existing companies.