Egyptian start-up that connects commuters with private buses in Cairo, Swvl announced Monday a $8 million series A funding.
The funding is led by regional venture fund BECO Capital, alongside Africa-based investor DiGAME 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 round of funding yet.
“The $8 million round is the biggest round of funding for a tech start-up in Egypt and one of the biggest rounds in the Middle East.” Moustafa Kandil, co-founder and CEO of Swvl, said.
“With this funding, Swvl aims to 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 percent cheaper than on-demand ride-hailing services.” Kandil added.
“We’re trying to build our own version of public transportation, that’s smarter basically,” Kandil said, who’s now 25 and earned a spot on Forbes Middle East’s 30 under 30 ranking; along with Mahmoud Nouh and Ahmed Sabbah, his co-founders.
According to Nouh and Sabbah, “Swvl intends to invest 300 million Egyptian pounds 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 plans to expand beyond Egypt to other emerging markets across the Middle East, South East Asia and Africa region within 2018.
Kandil also gladly announced that Esther Dyson will be joining Swvl’s board of directors, on behalf of DiGAME; along with Dany Farha the CEO and co-founder of BECO Capital and the co-founder of Bayt.com. Esther was previously on the board of Yandex, which recently formed a joint venture with Uber Russia.
Swvl is a product that 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 complete 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.
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 emerging markets across the Middle East, South East Asia and Africa region with inadequate public transportation infrastructure that have embraced on-demand ride-hailing. UN reports on key trends in urbanization indicate that by 2030, 60 percent of the planet’s residents will be living in cities, creating a previously unknown demand for commuting services, and a $5.4 trillion economic opportunity.