Dubai-based mobility company Swvl said Wednesday that it plans to go public through a reverse merger with Queen’s Gambit Growth Capital. The special purpose acquisition company is led entirely by women.
Founded in 2017, Swvl provides ridesharing services in emerging markets that don’t always have reliable public transportation.
Unlike ride-hailing services that focus on one-off and individual rides, Swvl focuses on mass transit. This both reduces emissions, and cuts the cost for what otherwise might be a prohibitively expensive ride. The company utilizes a proprietary algorithm to figure out the fastest routes, including for things like going to school or to work.
The deal with Queen’s Gambit values Swvl’s equity at around $1.5 billion, making it the largest Middle East-based unicorn to debut on the Nasdaq. An expected closing date for the merger was not given, but once complete the company will trade under the ticker SWVL. Reverser mergers involve private companies going public by buying a controlling share of a public firm.
Swvl currently operates in 10 cities across the Middle East and Africa, and it has its sights set on entry into new markets. The company’s 2020 revenue was roughly $26 million, and Swvl expects that number to rise to $79 million during 2021. All told, Swvl values the global mass transit market at $1 trillion.
The company did not disclose 2020’s net income or net loss.
“Mass transit systems in cities around the world are riddled with deficiencies, resulting in congestion, environmental concerns and reduced productivity,” said Swvl founder and CEO Mostafa Kandil. Since the company’s founding 1.4 million riders have booked more than 46 million rides through the platform.
“Having established a leadership position in key emerging markets, we believe Swvl is ready to capitalize on a truly global market opportunity,” added Victoria Grace, founder and CEO of Queen’s Gambit.
Grace first announced the SPAC in December, and in January said the fund had raised $300 million, which was above the initial target. Grace subsequently launched a second blank-check company in February called Queen’s Gambit Growth Capital II.
Grace said in a statement that she was looking to identify and grow a “disruptive platform that solves complex challenges and empowers underserved populations,” noting that in Swvl she found “each of those things and more.”
The merger comes amid a boom in SPAC investing that began in 2020. Last year so-called blank check companies raised a then record $83.4 billion, according to SPACInsider. For 2021 thus far $115 billion has been raised, although regulatory pressures and some high-profile instances of lackluster performance have somewhat cooled the enthusiasm.
SPACs have been a popular path to the public market for clean tech companies on the heels of a surge in ESG investing. Since March 2020 55 SPAC deals in the clean tech space have been announced, according to data from Raymond James.
The firm noted that the mergers span industry, size and business stages, but said that electric vehicle-focused deals dominate the list.
For its part, Swvl claims to have prevented roughly 245 million pounds of carbon emissions since its inception relative to single-rider options.
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