Arab Finance: With all eyes on Swvl and its landmark Nasdaq debut, we sat with CFO Youssef Salem who spoke to us about what it’s like to be the first Middle East unicorn to list on Nasdaq.

Salem, who is one of the youngest CFOs of a publicly listed company on the Nasdaq, talk us through the company’s grandiose visions and goals which definitely won’t stop at Nasdaq.

He also tells us how the mass transit players is transcending all geographical and cultural barriers with an every-growing expansion plan in place.

Speaking of Swvl’s landmark Nasdaq debut last month, can you tell us the objectives behind this move?

Our first objective is having access and first-mover to public currency. By being the first technology enabled mass transit player to be listed on any exchange globally, we are able to use this unique public currency to attract the best talent and combine with the leading players in this space globally.

Our second objective is having access to capital. The US public capital markets are some of the deepest and most liquid capital markets globally with access to various pools of equity, debt, and hybrid funding.

Third, we were striving for enhanced visibility and credibility. Half of our business is B2B and B2G where we provide transport and software as services to some of the leading corporates, universities, schools, and industrial clients globally as well as public transit agencies. Contracting with a Nasdaq listed company offers clients enhanced reliability.

And finally,timing. After extensive expansion across Africa, Middle East and South Asia, the next step in our journey was to expand our offering to the Americas and Europe. For this, we required a public currency on a global exchange to attract top talent and partners in these geographies.

Furthermore, how is this in line with the company’s vision and goals?

Swvl's mission is to provide a safe and reliable transport for every person to get to work, school and everywhere else regardless of their gender, income, and location with a focus on safe transport for women. Queen's Gambit is an all-women led SPAC which was seeking to combine with a leader in the sustainability space. Thus, the step is in alignment on mission.

The SPAC is also a thought leader in the mobility space. Queen's Gambit board members have extensive expertise in sustainable mobility with current and ex-board and advisory board memberships across global mobility leaders including Volvo, Geely, Proterra, Ford and Nissan

It provides us with strategic and high-quality backers. Queen's Gambit is backed by strategic partners in the transport and logistics space including Agility, one of the largest logistics players globally. Queen's Gambit shareholder base also includes global blue chip investors including Blackstone, one of the largest asset managers globally with $0.9 trillion assets under management, and Luxor Capital, one of the earliest backers of Delivery Hero.

Can you share with us the company in numbers, shedding light on the company’s performance? For instance, what are your year-on-year growth rate? What are the company’s revenues and profits? Etc.

Our proven growth track record and trajectory:

  • Track record of exponential growth, with annual growth of 430% over the past four years. Ridership growing faster than Via.
  • Exceptional results in Q4 2021 with over 12 million bookings, an increase of 40% QoQ and 174% YoY, and total annualized ticket fares of $93.6 million in December 2021.
  • TaaS offerings that have grown revenue per client by 4x with ~115% net dollar retention over the past two years.
  • Year-over-year growth is 183% as of Q4. Our annualized topline is more than $100 million before our recent streak of acquisitions which would substantially increase this number and are expected to cross $1 billion over the next 3 years. We expect to become profitable in 2024.

What’s the current scale of your business? Are there sectors that Swvl focuses on beyond transportation?

We made more than 12 million bookings in the last quarter. Swvl also uses the buses for advertising and logistics and has partnerships in place to provide financial services for captains.

Who is your target audience and did it change with time? Furthermore, how do you aim to build a more robust customer base?

We started with daily commuters going to work or school with our intracity B2C offering. Then we started catering for travelers via our intercity B2C product. Subsequently, we launched our B2B service for schools, universities, corporates, and industrial clients. Finally, we now offer software as a service for transit agencies and bus companies powering their operations with Swvl technology.

Our customer proposition is:

  1. Reliability and convenience
    1. Low average walk to station (7 mins)
    2. 7 days in-advance booking system
    3. 6/5 customer rating
    4. Air conditioned and top quality
    5. 96% on time pickups
    6. Multiple payment options
  2. Safety
    1. Vetted captains with background checks
    2. Ability to share live ride status
    3. Critical incident teams and third-party professional providers
    4. Ability to contact/trace
  3. Value for money
    1. On average 60-80% cheaper than ride hailing or taxis

How many countries does Swvl operate in? What’s your selection criteria to these countries and how does Swvl adapt to the cultural barriers in these different countries?

We operate in more than 100 cities in more than 20 countries across Latin America, Europe, Africa and Asia. We have multiple archetypes of cities including mega cities in emerging markets where we seek to complement public transit with our own marketplace of private high-capacity vehicles. In addition, cities in developed markets where we seek to partner with public transit agencies to power their operations with our software as a service technology offering and then provide ancillary services like B2B and intercity transport.

With the new ride-hailing apps being established, how does Swvl view competition and how does it set its pricing accordingly?

Our price point for customers will always be substantially below any ride-hailing service due to our ability to achieve more than 80% utilization on buses and minibuses and hence achieve a much lower cost base that allows us to make our service affordable to a much larger segment of the population.

Can you tell us more about Swvl’s business strategy and investments going forward?

We expect to invest $250m over the next two years to continue to strengthen our proprietary technology and launch in new markets including Kuwait, US, UK, South Africa, Turkey, Mexico, Peru and Colombia.

Being the first Middle East unicorn to list on Nasdaq, what’s next for Swvl in terms of landmark announcements? Can you share with us more details on its dual listing?

We will continue to rapidly launch new markets organically and inorganically utilizing our growth capital and public currency. We are considering the potential of a dual listing in Egypt, UAE and/or Saudi. The main critical path item is the regulatory/technical element of the link between Nasdaq and the regional exchanges.

What would you tell rising entrepreneurs about the current startup scene?

I would tell them that global investors are very keen on stories coming out of the Middle East and emerging markets and growing internationally. It offers them the combination of stronger growth, higher barriers to entry and more attractive valuations in emerging markets with the diversification, global leadership and capture of larger wallet sizes / purchasing power that international expansion brings.

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