Swvl’s acquisition of UK-based smart bus platform Zeelo is off: Cairo-born mass transport app Swvl will not be acquiring UK startup Zeelo, after the two companies said they were calling off the transaction due to turmoil in financial markets, Swvl announced in a filing to the US Securities and Exchange Commission on Friday. The acquisition could have valued the UK startup at USD 100 mn, sources told TechCrunch earlier this year, though neither outfit has publicly confirmed the transaction value.

What changed? The acquisition was announced in April, just weeks after Swvl’s debut on the Nasdaq via a SPAC merger. Since its IPO, Swvl’s shares have plunged nearly 84% amid a heavy sell-off on Wall Street of tech stocks and companies that went public via blank check firms. “All pre-completion obligations were met, but following financial market volatility, Swvl and Zeelo mutually agreed to terminate the planned transaction,” Swvl said in the disclosure.

What they said: “The deal that was agreed no longer made sense right for the parties…not just in terms of the transaction, but also in terms of the growth opportunity…We wouldn’t be able to do any of that anymore,” Zeelo co-founder and CEO Sam Ryan told TechCrunch. “Now, we’re shielded from what’s going on in the public markets.”

What the failed acquisition cost Swvl: In financial terms, the startup had previously funded a USD 5 mn convertible promissory note to Zeelo, which it has now forgiven. In operational terms, the acquisition would have been Swvl’s ticket into the UK, South Africa and the US — three of the biggest markets the startup had been eyeing.

Austerity time for Swvl: In the face of challenging market conditions, Swvl has been forced into cutbacks this year to keep it on track to meet its financial targets next year. The company has slashed headcount by a third, eliminated unprofitable routes, and cut executive pay as it tries to become cashflow-positive by next year. Swvl is expecting losses to almost double this year but thinks it can rebound and turn a slight profit next year.

The news comes just a couple of weeks after Swvl entered Mexico. Swvl has made around five acquisitions to date as part of its global expansion plans. After acquiring Barcelona-based Shotl and Chile / Argentina-based Viapool last year, earlier this year the company bought Turkish firm Volt Lines, German SaaS platform Door2Door and, just a couple of weeks ago, Mexico’s Urbvan Mobility.