Monday, June 21, 2021

    Egypt’s Swvl raises $42m investment, targets Nigerian expansion

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    Godwin Okafor
    Godwin Okafor is a Financial Journalist, Internet Social Entrepreneur and Founder of Naija247news Media Limited. He has over 16 years experience in financial journalism. His experience cuts across traditional and digital media. He started his journalism career at Business Day, Nigeria and founded Naija247news Media in 2010. Godwin holds a Bachelors degree in Industrial Relations and Personnel Management from the Lagos State University, Ojo, Lagos. He is an alumni of Lagos Business School and a Fellow of the University of Pennsylvania (Wharton Seminar for Business Journalists). Over the years, he has won a number of journalism awards. Godwin is the chairman of Emmerich Resources Limited, the publisher of Naija247news.

    Cairo-based transportation startup Swvl is expanding to Nigeria after it’s raised $42 million from investors, the startup told news wires after initially announcing the role of Country General Manager for Nigeria last week. Swvl will be launching in Lagos by mid-July with 50 buses initially, a Swvl representative confirmed, in a conversation with news wires, without sharing further details.

    Nigeria will be the third country for Swvl to launch its services after Egypt and Kenya. Some previous reports had also suggested that the Egyptian startup is looking to expand into Uganda but there was no confirmation. The startup last year had said that it plans to be in seven megacities by the end of 2019 including many in Southeast Asia but has apparently changed its plans to focus on Africa for now.

    Founded in 2017 by Mostafa Kandil who was previously with Careem, Ahmed Sabbah and Mahmoud Nouh, Swvl that connects commuters with private buses, allowing them to reserve seats on these buses and pay the fare through company’s mobile app, is currently available in Cairo, Alexandria & Nairobi. Swvl does not share the specifics but in a recent statement said that it is doing tens of thousands of bookings in these three cities.

    The startup has recently partnered with the American automotive giant Ford to provide Ford Transit minibus as the preferred vehicle of choice on Swvl’s routes by offering competitive lending rates to operators.

    Swvl may have been one of the first players to start this category in the region but now has Uber and Careem among its competitors, both of which launched their bus booking services in Egypt late last year. Careem has recently expanded this bus booking service that allows commuters to book buses with Careem Bus’ dedicated app to Saudi as well.

    But interestingly Swvl’s growth hasn’t slowed down even after the launch of similar services by Uber and Careem. Mostafa Kandil, Swvl’s CEO, in an interview, earlier this year claimed that they’ve been witnessing fourfold growth in signups since the launch of Uber Bus in Cairo. Signups may not be the right metric to assess performance as what matters at the end of the day is how many of those new users are actually using the service and what’s the frequency of their usage but it still gives some idea of what’s going on.

    Swvl won’t be the first player to launch such a service in Nigeria. There are some startups that are operating a similar service there and there are many indirect competitors including Gokada, a Lagos-based on-demand motorcycle-based ride-hailing company that recently raised $5.3 million investment.

    The transportation startup space in Lagos (& rest of Nigeria) might be getting a bit too crowded but city’s population of 20 million and its traffic congestion problem means the pie is big enough to be shared between multiple players

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