Egyptian vehicle hailing company, Swvl, has announced it will be making an inroad into Nigeria’s ridesharing market to offer services which the likes of Uber and Bolt are yet to offer Nigerians. However, it will meet a fierce challenge from yellow (commercial) bus operators.
The Founder and Chief Executive Officer of Swvl, Mostafa Kandil, said the company is planning to expand its market base to two or three African countries. Lagos will probably be the first location to set sail.
“The plan is to be in at least two or three more African cities by the end of the year… Lagos, Nigeria, is most likely the next market.”
Lagos is one of the biggest markets for ridesharing companies. Uber provided 30% more rides in this location than it did in London in its first 16 months of operating there.
Why this matters:
Swvl is entering the market to offer bus hailing service which Uber and Bolt have yet to started to explore in Nigeria. Note that bus transportation is the most popular means of commute. Since Lagos has an estimated population of 21 million people (the largest city in Africa), the customer base offers vast revenue potential for the bus hailing market.
Swvl will have the first mover advantage when it begins operations by the end of the year, tapping into the middle class and upper middle class; a segment that Kandil said public buses in emerging markets don’t really serve.
Note that Uber has been operating this bus service in Cairo since 2018 where the company is in competition with Swvl and Careem for demand. Uber recently acquired Careem.
What you need to know: The Egyptian tech company secured $42 million to push this expansion drive. The funding was raised from venture-capital firms such as Sweden’s Vostok, Dubai-based BECO Capital, China’s MSA and Endeavor Catalyst, based in New York.
Swvl also partnered with Ford: The agreement will see the Ford Transit minibus as the preferred vehicle of choice on Swvl’s routes, although this partnership is within Egypt, with the company entering Nigerian market, the usage might extend to the country as well.
The company has been active in fundraising in the past three years, securing $8 million and over $20 million in 2018 alone before securing it’s latest $42 million cash-support. Swvl’s fundraising keeps growing, which shows investors are keen on the prospect of the company.