Swvl—Once A Mobility Star—Seeks Lifeline Amid Fears of Grinding To A Halt

Swvl, the Cairo-born, Dubai-based mobility startup that once lit up the Burj Khalifa in red to celebrate its billion-dollar valuation as a mobility disruptor, recently announced USD 4.2 M in new contracts across Egypt in sectors like FMCG, telecom, e-commerce, and banking. These deals, touted as a testament to the company’s capacity for innovation in transportation solutions, include offerings such as shift-based employee transit and AI-driven commute optimisation for students.

Yet, beneath this optimistic announcement lies a more sobering reality: Swvl is fighting to maintain relevance and solvency amid an increasingly precarious financial and operational landscape.

While CEO Mostafa Kandil calls the contracts a “testament to Swvl’s ability to deliver transformative solutions,” broader questions about the company’s sustainability remain unanswered. Mounting legal challenges, delayed financial reports, and persistent operational hurdles paint a picture of a company scrambling for gains amid fears of grinding to a halt.

Swvl’s rise to prominence was as dramatic as its subsequent struggles. Founded in Egypt, the company rapidly gained attention for its tech-driven approach to mass transit, securing a USD 1.5 B valuation upon its Nasdaq debut in 2022. However, its stock has plummeted from a USD 10.00 IPO price to less than a dollar at one point in 2023 (currently trading at USD 4.79), following allegations of financial instability and operational mismanagement.

A damning report by activist short-biased activist Wolfpack Research in September alleged that Swvl was teetering on the edge of bankruptcy, pointing to dwindling cash reserves of USD 2.9 M and widespread service disruptions in its Cairo operations. The report triggered a 43.62% drop in Swvl’s stock, depleting what little investor confidence remains. Adding to its woes, U.S. law firm Pomerantz LLP launched an investigation into potential securities fraud, further undermining trust in the once-promising company.

The Shifting Sands of Strategy

Swvl’s current strategy leans heavily on B2B contracts and geographic expansion, particularly in Saudi Arabia. The company reported a sixfold increase in gross profits from its Saudi operations in 2024, fueled by USD 2.6 M in annual contract value from industries like education, healthcare, and food services. Its AI-powered platform, enabling real-time monitoring and route optimization, has found traction in managing student commutes and workforce mobility.

However, these gains are yet to offset Swvl’s broader struggles, especially in its home market of Egypt. Macroeconomic pressures, including a 40% devaluation of the Egyptian pound and surging inflation, continue to strain its cash flows. Meanwhile, the offloading of its European and Latin American operations in 2023, intended to streamline its business, provided only short-term financial relief.

Fighting Legal, Financial, and Operational Battles

Swvl’s financial disclosures, or the lack thereof, have further fueled scepticism. The company has not filed detailed earnings for 2024, leaving investors in the dark about its performance. While Swvl managed to report a net profit of USD 3.1 M in 2023—largely due to one-off debt settlements—it still incurred USD 8.2 M in losses from subsidiary sales. These figures underscore the fragility of its profitability.

Adding to its woes, Swvl faces delisting threats from Nasdaq for repeated compliance failures. It narrowly avoided delisting last year after its share price traded below USD 1.00 for 30 consecutive days.

Operationally, Swvl’s consumer services have taken a significant hit. Once the backbone of its revenue model, consumer offerings like Daily and Travel have been quietly removed from its website. While Kandil denies their closure, their absence signals a pivot away from the consumer market, where competition from ride-hailing giants and public transit systems proved too intense.

A Glimmer of Hope or a Mirage?

The recent USD 4.2 M in Egyptian contracts and a strategic five-year deal with e& Egypt, valued at USD 6.3 M, provide a glimmer of hope for Swvl. These partnerships highlight the company’s ability to adapt to the complex demands of B2B transportation solutions. However, analysts remain cautious, noting that Swvl’s reliance on contract wins and cost-cutting measures may not be enough to address its structural challenges.

“These contracts reflect Swvl’s potential,” Kandil has emphasised, but potential alone will not resolve its pressing financial and legal hurdles. With its U.S. expansion plans set for 2025 and strategic capital-raising efforts in its plans, Swvl’s ability to stabilise its operations in the coming months will be critical—not just for its survival but for the broader credibility of the transportation-as-a-service sector in emerging markets.

However, the company would be wary of over-committing as its rapid expansion into new markets, bolstered by acquisitions of companies like Shotl and Viapool, stretched its resources thin.

While its pivot to B2B and government partnerships reflects a pragmatic shift, the clock stays ticking for Swvl. Whether it can transform this period of crisis into an opportunity for reinvention remains to be seen.