Swvl eyes new markets + GrubTech lands in Egypt
Swvl announces expansion plans just days after cutting its workforce by a third: Nasdaq-listed mass transport startup Swvl is planning to start operations in Mexico this month and could kick off in the US during 2H 2022, CFO Youssef Salem told us, confirming a report in Al Mal. The news comes in the same week that the Cairo-born company said it is laying off 32% of its staff — or some 400 employees — across all its markets in a bid to turn cashflow positive by next year.
Why the US and Mexico? They are “very sizable markets with attractive unit economics and strong B2B and SaaS opportunity in line with Swvl’s strategic focus,” Salem said. The company aims to focus more on B2C and SaaS services, areas of the business that are currently turning a profit.
The company is trimming the fat wherever possible: Swvl has a hiring freeze in effect, has cut headcount, imposed salary cuts for leadership, is shedding workspace and eliminating unprofitable routes, all in hopes of turning profitable by 2023, Salem said.
Swvl wants to indirectly raise ticket prices: The firm will slash the value of the discounts it offers users by 10-20% in all its markets, Salem said, telling us to expect local Swvl prices to jump in line with inflation. Earlier this week the company said that it is also looking to end some of its unprofitable intercity routes outside of Egypt as part of its efforts to optimize operations.
Swvl has been on a buying spree: Swvl recently expanded into Europe with its acquisition of Turkish firm Volt Lines and mobility platform Shotl. It also recently took a controlling stake in transit company Viapool, which operates in Argentina and Chile, and entered Central Europe with its acquisition of German company Door2Door.
The Fed’s rate hike put startups in a vulnerable position: The US Federal Reserve’s monetary tightening is making funding more costly at the same time that venture funding is drying up across Planet Startup. Meanwhile, investors in public equities have pulled back from recently listed startups as part of a general risk-off that has swept global markets. “We are no longer funded by VCs [after going public] but even the public markets where we are being funded are impacted,” Salem said.
Tech companies and blank-check firms have been particularly hard hit this year as rising interest rates reverse the easy conditions of the covid era and put pressure on growth stocks. US-listed stock stocks have plunged into a bear market in what has become the worst year on record for the Nasdaq — and Swvl’s shares have halved in value since it debuted on the Nasdaq via a SPAC merger in April
IN OTHER STARTUP NEWS-
GrubTech arrives in Egypt: Dubai-based foodtech startup GrubTech has launched in Egypt and plans to invest USD 5 mn over the next 12-18 months into its operations, it said in a statement (pdf) yesterday. Backed by USD 13 mn in series A funding, the company has opened an office in Cairo and plans to use Egypt as a hub to reach other markets in Africa, it said.
About GrubTech: Founded in 2019 by Mohamed Al Fayed (LinkedIn), Omar Rifai (LinkedIn) and Mohamed Hamedi (LinkedIn), GrubTech provides cloud and dark kitchen services to restaurants. Billing itself as an “all-in-one” management tool, restaurants can receive orders, monitor stock and schedule deliveries via the platform, which also provides marketing tools and access to data analytics. The company is currently present in 17 countries.
MOVES- The company has tapped Osama Harfoush (LinkedIn) as its country manager. Harfoush joins the company from Mrsool where he served as the company’s Egypt country manager.
The startup has recently partnered with Paymob to streamline payments for Egypt’s F&B industry, signing a partnership agreement to incorporate digital payments for local restaurants, cafes, and cloud kitchens using GrubTech.
How much did Appetito pay for Lamma? No less than USD 10 mn, Appetito CFO Mark Adeeb told Bloomberg Asharq. Earlier this week, the Cairo-based grocery delivery platform announced that it had acquired its Tunisian competitor, in a move that will give Appetito access to new markets in Tunisia and Morocco.
Appetito has a USD 20-40 mn funding round in the pipeline that it hopes to complete this year, Adeeb said. The startup is set to use the funds for its regional expansion.