With USD 42 Mn in the bank and what can be regarded as a successful play in Cairo, Egypt’s transport tech Swvl was sure going to pull off something big. Not just the way we expected.
For a company that raised it Series A and Series B in one year, it looked like anything was possible. It said during its last funding round that it was going to expand to Lagos but till now no sign of them. Well, it is either they are coming later or never – more likely never.
In case you don’t know, Swvl has launched in Lahore, Pakistan, and this is an expansion it did rather quietly. After Egypt and Kenya, this is the bus booking startup’s third market.
Everyone anticipated the company to take operations to Lagos, one of Africa’s busiest and most challenged cities when it comes to traffic. But bubbles were apparently burst when a recent development on their Facebook page indicated that they have steered to Asia.
There had been rumors about its expansion to Pakistan, but the company exclusively denied for reasons best known to it. But rather than saying the startup was not honest about where it’s going, remember that keeping where you are taking your services to as a business that faces competition is completely normal.
You would rather take everyone by surprise than have some local players pull off a stunt that will make launching almost Herculean. It is also the practice of startups who raise rounds to be vocally ambitious about expansion, when sometimes, in reality, they take on something else.
This is not the first time the Cairo-headquartered firm is taking an unforeseen detour and taking everyone by surprise. When it raised tens of millions of dollars in its Series B-1 last year, Swvl announced that it would use the investment to expand to Southeast Asia, to launch in Manila in the first quarter of 2019.
They instead expanded to Kenya, a move that not even as much as a slight hint was given about. In the same fashion, the company said last month that it is riding to Nigeria by mid-July, but July is almost over, and the startup has gone to Pakistan.
This development somehow reminds the Nigerian tech space of SafeBoda’s promise to expand to Lagos after it secured an undisclosed amount of funding from Allianz X and GoJEK. But till now, no sign of launch.
Techpoint Africa decided to dig in, only for the Ugandan ride-hailing firm to initially say that it did not officially announce any expansion intention. Now, I am no expert but the time frame between SafeBoda’s storied Lagos entry and rivals GoKada and Max.ng’s huge funding rounds is quite narrow.
It would seem that the ride-hailing market in Lagos heard about SafeBoda’s intentions and decided to rev up operations. What’s more, GoKada soft-pedaled on the asphalt and took on the waters, launching GBoat. Then Max.ng recently expanded to Akure in what many did not see coming.
Let’s not forget ORide, who came into the market with a bang and gave its competitors a triathlon for their naira. Perhaps because of these developments that fast followed expansion rumors, SafeBoda needs to come up with a new plan or call the plan off altogether.
Despite the fact that SafeBoda co-founder Austin Sussock says that the Lagos launch will still happen, this trend could be the reason Swvl is playing this card. To put some factors into perspective, Lagos roads are already awash with vehicles and internet penetration is still at its infancy.
Needless to say, the ride-hailing market in Lagos is already choked up. I see no reason more vehicles should be on the road when the city is endlessly lamenting about traffic jams, and the government is not chomping at so many bits to create new access roads. Also, Lagosians are already more comfortable with the regular buses – also known as Danfo.
It may take a lot of compulsion before they start booking Swvl’s buses when they can just flag one down along a main road or by a popular junction. If they want to arrive their destinations in comfort and perhaps style, there’s Uber and Bolt to do so. For quickness in the lieu of madding traffic, ORide, Max.ng and GoKada to the rescue.
Lahore is the second-largest city in Pakistan, home to more than 10 million people and challenged when it comes to transportation. Conversely, Lagos is the smallest state in Nigeria. The tech space in Lahore is also more developed than that of Lagos – everything seems to be in place, even though Lagos is home to 17.5 million people.
With backing from top regional VCs such as BECO Capital, Raed Ventures, Oman Technology Fund and globalists such as Endeavour Capital, Swvl boasts of no less than USD 80 Mn raised, making it one of the best-funded startups in the MENA region and it its category.
It’s USD 42 Mn is the largest-ever for an Egyptian startup, and the company has previous experience in Pakistan. Apparently, Swvl has what it takes to thrive in Lahore.
Featured Image: Raed Ventures
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