Dubai unicorn Swvl expands into Latin America with Viapool acquisition

The move will grant the mass transit company access to Argentina and Chile markets

Swvl is poised to become the first Middle East unicorn to list on the Nasdaq. Photo: Swvl

Swvl, the Dubai-based mass transit and shared mobility services provider, acquired a controlling interest in Argentina's Viapool in a deal expected to help its expansion within Latin America.

The acquisition will grant the Dubai company access to Argentina and Chile markets, and will serve as an entry point to Brazil and Mexico. However, the terms of the deal, expected to take place in 2022, were not disclosed.

Viapool deal is Swvl's second acquisition since it announced plans in July to list on the Nasdaq through a merger with Queen’s Gambit Growth Capital, a blank cheque company. In August, it agreed to buy Barcelona-based Shotl, a bus and van service similar to Uber that is also in Brazil.

"Latin America represents a compelling opportunity for Swvl to continue its global expansion, all the while capitalising on unmet commuting needs for hundreds of millions of individuals living within urban megacities," Mostafa Kandil, founder and chief executive of Swvl, said on Wednesday.

"Viapool shares our vision of transforming public transportation by making daily commuting more accessible, convenient and sustainable, and has demonstrated impressive growth, unit economics and customer traction. By adding Viapool to the Swvl platform, we will be ideally positioned to scale [up] our operations to additional cities within the region."

Swvl, which started in Cairo, began with a $500,000 seed round in 2017, led by Mr Kandil’s former team at Careem. It raised $8 million the following year in a series A funding round led by several key investors in the Mena region.

In 2019, the start-up raised $42m in a series C round from veteran venture capital firms such as Dubai’s Beco Capital, US-based Endeavour Catalyst, China's MSA, Egypt's Sawari Ventures and Michael Lahyani, chief executive of UAE real estate portal Property Finder, among others.

In August, it raised $35.5m in growth financing, with strategic and financial investors, including Kuwait’s Agility and Chimera Abu Dhabi, funding a significant portion of a $100m private investment in public entity (Pipe) deal.

The Swvl-Queen's Gambit merger would make it the second Arab company to list on the Nasdaq, but the first with a $1.5 billion valuation and the only technology enabled mass transit solutions company to list on any stock exchange. The listing is expected to happen this quarter.

Aramex, the Middle East's biggest provider of logistics and transport solutions, was the first company from the Arab world to list on the Nasdaq in 1997. It later delisted in 2002 and went public again in 2005 on the Dubai Financial Market.

The Viapool acquisition will enable Swvl to tap into a combined population of more than 65 million. The deal would add more than $5m in annual revenue from 130 vehicles serving about 175 routes.

Viapool has more than 80 institutional clients, including Nestle, Unilever, Carrefour, SAP, Mondelez, Bayer and Siemens. It said revenue grew rapidly in October at about four times pre-coronavirus levels.

"Daily commuting needs to be reinvented and, together with Swvl, we believe that one plus one can be much more than two. In these times, emerging markets around the world have much more in common than ever," said Alejandro Taubas, co-founder of Viapool.