Emerging Market Transportation Company Swvl Lands SPAC Deal: What Investors Should Know

Swvl announced a SPAC deal Wednesday with Queen’s Gambit Growth Capital GMBT, the first SPAC led by women.

The deal values the company at a $1.1 billion pro forma enterprise value, making Swvl the first unicorn ($1 billion-plus) from the Middle East to list on the Nasdaq.

The PIPE was led by Agility, Luxor Capital Group and Zain.

Public GMBT shareholders will own 22% of the company after the merger. The new company will trade as Swvl Holdings Corp with ticker "SWVL" on the Nasdaq.

About Swvl: Founded in 2017, Swvl is a company that uses technology to tackle mass transit in emerging markets.

The company offers services for daily commuting, transportation for businesses and schools and uses the transport-as-a-service to connect other customers.

“Mass transit systems in cities around the world are riddled with deficiencies, resulting in congestion, environmental concerns and reduced productivity,” Swvl founder Mostafa Kandil said.

Kandil founded the company with a goal to empower people to “go where they want to, when they want to and to feel comfortable doing it.”

Swvl is a market leader in 10 cities across Egypt, Kenya, Pakistan, the UAE, Saudi Arabia and Jordan.

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Growth Ahead: Swvl is targeting the $1-trillion global market of mass transit.

The company will use the money raised from going public to continue its long-term growth strategy, which includes being present in 20 countries and hitting $1 billion in annual revenue by 2025.

The plan calls for Swvl to operate in the continents of Africa, South America, North America, Europe and Asia by 2025.

Swvl highlighted its PIPE investors of Agility and Zain as partners that can help with growth. Agility is a “global supply chain and logistics powerhouse,” according to the presentation. Zain has over 50 million customers in many of Swvl’s existing markets.

New markets are seeing stronger adoption at launch, which could help the company with expansion. It took 21 months for Cairo to hit 500,000 bookings after its 2017 launch. The company’s most recent launch of Karachi, Pakistan hit 500,000 bookings in the first four months.

Swvl Financials: Swvl has had over 1.4 million riders booked over 46 million rides to date.

Swvl’s revenue has grown 430% compounded annually from 2017 to 2020.

The company had revenue of $26 million in fiscal 2020. Forecasted revenue is $47 million in fiscal 2021 and $141 million in fiscal 2022.

Swvl’s projections call for gross margins of 30% to 40%.

GMBT Price Action: GMBT shares are up 1.45% to $9.82 on Wednesday.

Photo: courtesy of Swvl.