Swvl Stock Price Fall Another Relic of SPAC Era - Bloomberg

Swvl Stock Price Fall Another Relic of SPAC Era - Bloomberg

In July 2021 the world’s tallest tower, the Burj Khalifa in Dubai, was briefly lit up in brilliant red, with animated electronic text scrolling up its height announcing “the Middle East’s first $1.5 billion unicorn to list on Nasdaq.” The splashy marketing was for Swvl, a company with lofty ambitions to become a hybrid of a ride-hailing app and bus service in cities across the globe.

Twenty months later, the Dubai-based company’s shares have dropped more than 99%. Its roughly $9 million market value is a shadow of the billion-dollar-plus valuation that once gave it so-called unicorn status. A deal to buy Turkish transit company Volt Lines largely using Swvl shares fell apart in January. Once trumpeted by Dubai ruler Sheikh Mohammed bin Rashid Al Maktoum as a symbol of the Middle East’s startup spirit, Swvl Holdings Corp. has become another example of tech-sector overreach—and how quickly investor money dried up once superlow interest rates went away. It also shows the perils of trying to build a business that straddles emerging markets vulnerable to currency shocks as the dollar rises.

Swvl was co-founded in Cairo in 2017 by former Rocket Internet SE executive Mostafa Kandil along with Ahmed Sabbah and Mahmoud Nouh. The trio started the company as a solution for commuters who didn’t want to rely on public transit but couldn’t pay a premium for ride-share services. Their idea: buses and vans running along routes that users could book a ride on with an app.

The early days were promising. Swvl raised almost $100 million over several rounds from Beco Capital, VNV Global, Digame Investment, Armistice Capital and other investors. The first one, putting in $500,000, was Dubai-based Careem, a ride-hailing company that Uber Technologies Inc. later acquired.

In 2019, Swvl opened an office in Dubai to spearhead its international expansion, though it kept its technology and operational base in Egypt. It rented space in an upscale building whose other tenants include BMW and Rolls-Royce. Along the way, Kandil’s co-founders departed. (Nouh left to start a business-to-business marketplace company, Capiter, that’s now restructuring; Sabbah, to co-found the fintech startup Telda.)