Egyptian startup Swvl raises $8 million Series A
The company that connects Egypt’s 25 million daily commuters to buses seeks to optimize micro-transit within and beyond Egypt
SWVL, the premium app-based mass transit system disrupting commuting in the MENA region, announced a USD8 million Series A led by regional venture fund BECO Capital, alongside Africa-based investor DiGAME Investment Company and global VC fund Silicon Badia. Raed Ventures, Arzan VC, Oman Technology Fund, and chairman of EDventure Holdings Esther Dyson, also participated in the round, which is Egypt’s largest Series A as of yet. The round comes as both primary and secondary.
According to Mostafa Kandil, co-founder and CEO of Swvl, "the USD 8m round is the biggest round of funding for a tech startup in Egypt and one of the biggest rounds in the Middle East. With the funding, Swvl will solidify its position in Egypt and establish the company as a global leader in the affordable smart mobility space, offering fixed routes for a fixed flat fare at prices that are up to 80% cheaper than on-demand ride-hailing services.”
We’re trying to build our own version of public transportation, that’s smarter basically,” Kandil, who’s now 25 and earned a spot on Forbes Middle East’s 30 under 30 ranking, along with Nouh and Sabbah his co-founders.
According to Nouh and Sabbah “Swvl intends to invest 300 million EGP in the local market in the upcoming 3 years to empower as many micro-entrepreneurs as possible in Egypt and the region and to become one of the biggest job creators in the country.” Swvl is expected to expand beyond Egypt to other emerging markets across the Middle East, South East Asia and Africa region within 2018.
Swvl was founded by three young entrepreneurs - Mostafa Kandil, Ahmed Sabbah and Mahmoud Nouh, who have built a strong team with experience from Careem, Google, Uber, Quora, Rocket Internet and DeliveryHero.
Kandil also gladly announced Esther Dyson, on behalf of DiGAME, will be joining Swvl’s Board of Directors along with Dany Farha the CEO & co-founder of BECO Capital and the co-founder of Bayt.com. Esther was previously on the board of Yandex, which recently acquired Uber Russia.
Essentially, SWVL emerges from a double-sided problem. On the demand side, nearly 25 million Egyptian daily commuters, a quarter of the country’s population, are torn between two extremes: expensive on- demand ride-hailing services and less than reliable and inconvenient public transportation. This is coupled with a supply-side opportunity where the economic turndown in Egypt has limited the purchasing power of an aspirational middle-class and, simultaneously, generated a wealth of untapped private infrastructure. With the market finally ready for new transportation disrupters, lifted up by the success of Uber and Careem, and consumers looking for more inclusive and more affordable solutions, SWVL closes this gap by providing an alternative that is more reliable and convenient than public transportation yet cost competitive.
In under a year the company grew to do hundreds of thousands of rides per month with hundreds of buses in its network along 200 routes in Cairo and Alexandria. Customers are a mix of university students and corporate employees with a large portion of women commuters, who want to avoid harassment on public transportation. Eventually, SWVL aspires to cater to all customer segments by building out their network, optimization, and differentiated product offerings. “We try to solve all of our problems with technology,” says Kandil.
Building out of Egypt, SWVL widens access to new commuting solutions and, ultimately, seeks to re-model public transportation beyond Cairo and Alexandria, and into other emerging markets. This year, the company has plans to solidify its position in Egypt and expand into Karachi and Riyadh—big cities with inadequate public transportation infrastructure that have embraced on-demand ride-hailing. UN report on key trends in urbanization indicate that by 2030, 60% of the planet’s residents will be living in cities, creating a previously unknown demand for commuting services, and a US$5.4 trillion economic opportunity.
SWVL is an Egypt-based tech startup that enables riders heading in the same direction to share fixed-route bus trips for a flat fare with no surge pricing. The service is up to 70% cheaper than competing on-demand ride-hailing services, and is currently available on 140 routes in Cairo and Alexandria with plans to expand within and beyond Egypt. Customers can schedule their pick-up and drop-off points on fixed routes at fixed times, and pay through the app or in cash.