The meteoric rise of Swvl

SME Stories

The meteoric rise of Swvl

Priya Wadhwa
SME Stories
Published:
The meteoric rise of Swvl
In 2018 alone, Swvl raised two rounds of funding to expand operations— a rare happening.

Egypt has a fast-growing startup ecosystem, becoming the second-largest in the Middle East and North Africa in 2018. One of the startups that is at the forefront of this movement is Swvl, the bus transportation startup that is solving the huge transportation issue in Egypt.

Uber, Careem and their rivals across the world have been game changers in the transportation sphere. With their car-hailing services through the tap of a button, they introduced transparency and reliability that people missed in the market. However, they became party to — if not increased — the major hindrance in transport: traffic. Swvl recognised this problem, and is resolving it in Egypt with not their car, but bus-hailing service.

The more cars there are on the streets, the more traffic there is, the longer it takes to reach a place. But cabs (even the ones that can be ordered through apps) do not stop their meter from running, nor give people an option to carpool. Now, Egypt’s city streets being clogged with cars is common knowledge. People spend upwards of two hours in their daily commute and prefer public transport due to a range of reasons, including the lack of affordability of a hefty cab bill everyday. However, like in many countries, public transport is not reliable and finding a place to sit is next to impossible. Enter Swvl. They allow you to book a seat on their minibuses that have fixed timings, fixed stops and fixed prices. Bringing in the same transparency as other cab-hailing platforms, but for public transport, thereby plugging in the gap in the market.

We all know what happens to startups that resolve problems for the public and sees a product market fit — they get funded, fast. Founded in April 2017 in Cairo, Swvl went from raising funds in Series A and shortly after Series B, within 2018. That’s rare to see for any startup, no matter the industry, as the norm is to have 18 to 24 months between funding rounds. Swvl’s services got recognition and gained ground within the market quickly too. It has had over a million users that have been making hundreds of thousands of bookings each month, with its service being available on 200 fixed routes in Cairo and Alexandria.

Swvl’s Series A funding round garnered $8 million from Dubai-based BECO Capital, Africa-based investor DiGAME and global investor Silicon Badia that offices in New York and Amman.

They also co-led its Series B funding which led to Swvl’s recent evaluation of close to $100 million. Whilst the exact funding amount remains undisclosed till date, it is rumoured to be between $18 and $35 million. Other returning investors included Saudi-based Raed Ventures, Kuwait’s Arzan VC, Oman Technology Fund, and EDventure Holdings chairman Esther Dyson. The Series B also saw Cairo-based Sawari Ventures, which became the first Egyptian VC to invest in Swvl, along with Jordan’s Dash Ventures and Emilian Popa.

Image source: Swvl
Image source: Swvl
Image source: Swvl

With a population of more than 100 million, Egypt certainly has a ripe market for cheaper transport solutions and Swvl’s growth hasn’t gone unnoticed; and while it is still leading the bus-hailing market, Uber and Careem have followed in its wake to get a piece of the lucrative pie.

One of the biggest pains here is congestion. After all the inflation, people are not able to afford the single ride-hailing service.
Hadeer Shalaby, Regional Director, Careem Bus

Early in December 2018, a new Cairo-based bus-booking app start-up, Buseet, raised seed investment from Saudi Arabia’s Vision Ventures. Moreover, in the same month, Halan, a slightly different start-up also based in Cairo, which offers motorcycle and tuk-tuk-hailing services, closed its Series A investment.

While the ride-sharing and hailing apps are gaining ground in Egypt, the competition to gain a share of the market segment is strengthening, with both local and international players. That means that Swvl and the rest have to step up their game, find their niche and expand in order to grow the market and lead the segment. And Swvl is not behind in that thinking either.

Recent announcements from the company have shown their intention to expand to South-East Asia in 2019. It has plans to launch its services in the region by the first quarter of this year, starting with Manila in Philippines, followed by its other cities, and many others in Vietnam and Thailand. By the end of 2019, Swvl plans to offer its services in seven major cities across the emerging markets in the asian region. In addition, it announced that part of the funds raised in its Series B would go into opening a research and development facility in Berlin.

Too many cars congesting the streets of Egypt and many other cities in the emerging markets means there is a problem that can be fixed. Add to that the time, space and money factors and you’ve got markets ripe for picking for companies able to offer a viable solution. Public transport works well in Europe, with it being a cheaper, efficient and environmentally friendly alternative; however its unreliable nature in most of Asia and Africa, mean either people are heavily dependent upon cars or put up with the system.In Egypt and many other such markets, the cost of living is on the rise, which is leading to many preferring cheaper, yet efficient alternatives.

Hence, Swvl’s bus-hailing service becoming ever-popular is almost a no-brainer. Such a service in any country would bring a stiff competition to not only established cab-hailing apps, but also the public transport. It may just be the direction in which the market for ride-hailing apps is driving to.