Dubai's Swvl raises $35.5m in growth finance before Nasdaq listing

Kuwait’s Agility and Chimera Abu Dhabi are among investors that are part of the mass transit company's latest funding round

Shared transport of Swvl on an Islamabad street in Pakistan. The company is pursuing a growth strategy that will expand its annual gross revenue to about $1bn. Reuters

Dubai mass transit and shared mobility services provider Swvl raised $35.5 million in growth financing before its planned merger and listing on the Nasdaq in the US.

Strategic and financial investors have pre-funded a significant portion of $100m Pipe (private investment in public entity) deal, which is part of Swvl’s proposed $1.5 billion merger with a blank-cheque company and its listing, the company said on Sunday.

Kuwait’s Agility and Chimera Abu Dhabi are among global investors that are part of the latest funding round, which will accelerate Swvl's expansion in current and new geographies, including markets in Europe, Latin America and the Asia-Pacific regions.

The financing by global investors is a sign of “confidence in our growth strategy”, said Swvl founder Mostafa Kandil.

"With this immediate infusion of growth capital, we are even better positioned to bring our transformative daily commuting, inter-city retail travel and TaaS [test as a services] offerings to new markets," he said. He also said that Swvl is “advancing our mission to reinvent the $1 trillion mass transit industry”.

In July, Swvl said it is listing shares through a merger with special purpose acquisition company, Queen’s Gambit Growth Capital, the first Spac that is led entirely by women. It is the second technology start-up from the Middle East to seek listing on the US bourse through Spac, but the first to have a $1.5bn valuation.

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 this year.

“We have already witnessed the disruptive power of Swvl’s parallel mass transit platform in many of our largest markets,” said Tarek Sultan, vice chairman of Agility. “We have full confidence in their ability to solve complex mobility challenges.”

Investors that have pre-funded the Pipe have received exchangeable notes of Swvl, which will be automatically exchanged for shares of the combined company at an exchange price of $8.50 per share, once it merges with the Spac.

“This pre-funding creates significant value for all Swvl’s shareholders as Swvl [uses] this capital into strategic and accretive expansions with high return on capital and upside to Swvl’s current business plan,” said Youssef Salem, Swvl's chief financial officer.

Swvl said it intends to use the pre-funded Pipe proceeds to expedite the availability of its mass transit solutions in other emerging market cities across Africa, Asia and the Middle East.

The company is pursuing a growth strategy that aims to push its gross annual revenue to $1bn and expand its presence to more than 30 cities in over 20 countries by 2025.

Earlier this month, Swvl agreed to take a controlling stake in Shotl, an Uber-like service in Barcelona for bus and van operators that caters to municipalities, corporations and educational institutions.

Shotl operates across 22 cities in Brazil, Japan, Spain, Germany, France, the UK, Italy, Switzerland, Portugal and Finland. The acquisition will enable Swvl’s entry into Europe more than one year ahead of schedule.