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 vehicle is run exclusively by women.
Swvl was founded in 2017 and offers carpooling in emerging countries that do not always have reliable public transport.
Unlike ride hailing services that focus on one-off and individual rides, Swvl focuses on local transport. This reduces both emissions and the cost of an otherwise prohibitively expensive trip. The company uses a proprietary algorithm to determine the fastest routes, including things like commuting to and from school.
The deal with Queen’s Gambit estimates Swvl’s equity at around $ 1.5 billion, making it the largest Middle Eastern-based unicorn to debut on the Nasdaq. An anticipated completion date for the merger has not been announced, but upon completion the company will trade under the ticker SWVL. In reverser mergers, private companies go public by acquiring a majority stake in a public company.
Swvl currently operates in 10 cities in the Middle East and Africa and has its sights set on entering new markets. The company’s sales in 2020 were around $ 26 million, and Swvl expects that number to climb to $ 79 million in 2021. All in all, Swvl estimates the global mass transit market at $ 1 trillion.
The company did not disclose net income or net loss for 2020.
“Mass transportation systems in cities around the world are rife with flaws, leading to congestion, environmental concerns and lower productivity,” said Swvl Founder and CEO Mostafa Kandil. Since the company was founded, 1.4 million passengers have booked more than 46 million trips via the platform.
“After building a leadership position in key emerging markets, we believe Swvl is poised to capitalize on a truly global market opportunity,” added Victoria Grace, Founder and CEO of Queen’s Gambit.
SPACs turn green
Grace first announced the SPAC in December and said in January the fund had raised $ 300 million, which is above its original target. Grace then started a second blank check company called Queen’s Gambit Growth Capital II in February.
Grace said in a statement that she wants to identify and develop a “disruptive platform that solves complex challenges and empowers underserved populations”, noting that she found “every one of these things and more” in Swvl.
The merger takes place amid a boom in SPAC investment that began in 2020. Last year, so-called blank check companies collected a record of 83.4 billion dollars, according to SPACInsider. It has raised $ 115 billion so far for 2021, though regulatory pressure and some high-profile cases of lackluster performance have cooled the buzz a bit.
SPACs are a popular route to the public market for clean tech companies after a surge in ESG investment. According to Raymond James, 55 SPAC deals in the cleantech sector have been announced since March 2020.
The company noted that the mergers spanned industry, size, and business stages, but said EV-focused deals dominated the list.
For its part, Swvl claims to have avoided around 245 million pounds of CO2 emissions since its inception when compared to single driver options.
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