The two-year-old company, which started in Cairo and also operates in Alexandria and Nairobi in Kenya, got the money from venture-capital firms including Sweden’s Vostok, Dubai-based BECO Capital, China’s MSA and Endeavor Catalyst, based in New York.
“The plan is to be in at least two or three more African cities by the end of the year,’’ Mostafa Kandil, the 26-year-old founder and chief executive officer, said by phone from Cairo. “Lagos, Nigeria, is most likely the next market.’’
Swvl carries hundreds of thousands of customers each month, according to Kandil, an engineering graduate who once worked for Careem, a Middle Eastern-focused transport firm that Uber is acquiring.
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 whichlaunched 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.
Uber and Careem have both launched bus services in Cairo in the past year. Along with Swvl, they’re exploiting growing demand among the city’s 20 million people for transport options that are cheaper than taxis but more convenient than public buses, which are often perceived as unreliable and dangerous.
“We tap into the middle class and upper middle class, a segment that public buses in emerging markets don’t really serve,’’ said Kandil.