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Sunday, 6 February 2022

Swvl receives funding boost ahead of Nasdaq SPAC merger + Anghami starts trading

The EBRD is backing Swvl ahead of Nasdaq debut: Egypt-born, UAE-based mass transit app Swvl has new investors on board as it gears up to go public on the Nasdaq via a SPAC merger, the firm announced on Wednesday. The European Bank for Reconstruction and Development (EBRD) and Teklas Ventures, the venture capital arm of auto parts maker Teklas, will invest USD 21.5 mn in a private placement (PIPE), joining Agility, Luxor Capital, Chimera and Zain which agreed last year to commit USD 100 mn.

What’s a PIPE, again? Standing for private investment in public equity, PIPEs are simply the sale of publicly-traded shares to private investors. Check out our explainer here for more.

Swvl is expected to IPO on the Nasdaq this quarter via a merger with US female-led SPAC Queen’s Gambit Growth Capital.

The company will list 35% of its shares on the exchange (c. 50 mn shares) and hopes to go ahead with the listing before the end of March, CFO Youssef Salem told Enterprise, confirming a story first reported by Al Mal.

The latest investment takes Swvl’s expected PIPE finance to USD 121.5 mn, of which USD 66.5 mn has been pre-funded, the company said. Other PIPE investors include Agility, Luxor Capital Group, Chimera, and Zain Ventures.

Minus one investor: Queen’s Gambit announced in a filing last Sunday the termination of two agreements with Atalaya Capital Management that would have seen it invest up to USD 100 mn in SPAC shares and another USD 2 mn via a private placement.

What they said: “Swvl is a highly dynamic tech investor with a transformative business model that brings tangible benefits to travelers in Egypt and other countries of operation of the EBRD, benefiting female travelers in particular,” said Sue Barrett, the EBRD’s director of sustainable infrastructure for the Middle East, Turkey and Africa.

Swvl made its entrance to Europe and Latin America last year after acquiring controlling stakes in Barcelona-based transportation platform Shotl and South American firm Viapool, which operates in Argentina and Chile.

IPO to fund big investment plans: The company plans to invest USD 250-300 mn over the next three years to expand its global footprint after it goes public.

Advisors: Law firm Ibrachy & Dermarkar is Swvl’s legal advisor on the merger, while Vinson & Elkins and Shahid Law Firm are acting as advisors for Queen’s Gambit.

The Middle East’s first US tech listing soars on debut: Shares in Abu Dhabi-based music streaming platform Anghami rose as much as 82% on its Nasdaq trading debut on Friday following its merger with blank-check company Vistas Media Acquisition Company, which valued the company at around USD 220 mn, Bloomberg reports. Shares opened the session at USD 17.91 before falling back to close at USD 12.07.

But the company saw a wave of redemptions: Shareholders holding 9.8 mn of Vistas’ 10 mn shares traded them in for cash during the day, continuing a trend that has seen appetite for SPAC listings diminish. Redemption rates hit 75% last month, up from just 14% a year before.

Though Anghami isn’t too worried: “[Redemptions are] something that is recently expected but we were well-prepared with a solid PIPE to compensate for this,” Anghami CEO Eddy Maroun told Bloomberg Daybreak (watch, runtime: 4:53). “Of course this is something that has been happening lately, but we’re good with the funding that we have in place now.” The SPAC raised USD 40 mn in private investment from Shuaa Capital and Visas’ parent company.

About Anghami: The company says it has more than 70 mn registered users with some 1 bn streams each month. Revenues have jumped 80% since 2018 and are projected to rise five-fold over the coming three years.

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