Being a newbie to the game doesn’t mean the odds are not in your favor. A three-month-old Egyptian transport startup named Swvl received big news on July 17 when it was announced that Careem, a major transportation network company based in Dubai, had purchased a minority stake in the burgeoning company.
Swvl and Careem share similar concepts, but have different traits. Where Swvl connects people to buses through its mobile app, Careem connects people to private cars, making it Uber’s biggest rival in the region as well as source of frustration for taxi drivers.
Reuters reported that Careem has invested $500,000 in seed funding in Swvl and that Careem’s Chief Experience Officer and Co-Founder Magnus Olsson will be joining Swvl’s board as part of the agreement. However, Careem declined to comment on the exact size of the minority stake.
“Swvl and Careem share a similar mission in that we both wish to solve the transportation challenges facing the MENASA region,” said Olsson in a press release. “Our investment in the company is a clear bet on the value we believe Swvl will bring to the Egyptian people and further fulfills our promise to be a source of inspiration to local startups. We’re also proud to have played a part in promoting entrepreneurship in the region."
The news comes after Careem announced in June that it would step up its expansion plans after raising $500 million from investors, according to Reuters. It comes as no surprise then that Swvl, which was founded by former Careem executive Mostafa Kandil, looked like a worthy candidate for investment. Swvl also marks Careem’s first foray into public transportation.
"Mostafa was an amazing colleague while he was at Careem, and we are excited to support him on Swvl as the company looks to expand its footprint and accelerate its growth,” said Olsson.
With its new investment from Careem, Swvl plans to increase its workforce, develop new features on its app and expand its services in Cairo and other cities, before eventually expanding to other countries in the Middle East.
Swvl currently accepts payments via credit card, but is expected to plug in additional payment options following the latest investment from Careem.
The bus transportation app aims to provide affordable, reliable and convenient public transportation by allowing Swvl app users to select their pick-up and drop-off locations and monitor bus routes to estimate arrival times.
Swvl is currently serving 50,000 passengers and has 200 buses signed up to the mobile app, but the company targets 300,000 trips a month by the end of 2017.
Photo credit: Swvl