Earlier in March Egyptian Mass transit and shared mobility provider Swvl went public, marking a landmark moment for Egyptian and Middle Eastern tech ecosystems. Quoting the statements of Tage “It’s also a test for the company going public despite a market that’s been unfriendly toward combinations with special purpose acquisition companies, or SPACs, of late.”
To Understand SPAC : A SPAC is a publicly-traded corporation with a two-year life span formed with the sole purpose of effecting a merger, or “combination,” with a privately held business to enable it to go public. SPACs raise money largely from public-equity investors and have the potential to derisk and shorten the IPO process for their target companies, often offering them better terms than a traditional IPO would.
Fast forward later the Company offers a public statement on its LinkedIn page, ” It will lay off 32% of its workforce: this means 400 persons will be rendered unemployed. The Company has acquired 4 companies in total and raised more than $132 million from investors including BECO Capital and Vostok Ventures. It last raised a $26 million round of funding led by VNV Global in May 2020, per Crunchbase data.
SWVL won’t be the First Company to Exit the Kenyan scenes during troubling times, in 2020 Safeboda a Ride-hailing app did Exit the scenes.
— SafeBoda Kenya (@SafeBoda_Kenya) November 16, 2020
That was one of the best and cheapest ride-hailing startups that the majority of the Kenyans Loved, SWVL also became a Kenyan Lover in Transit, SWVL typically has 3 parts to their transport program. SWVL Daly, City-City and Business-Business. After almost three years in the country, they will be pausing the Daily and CIty-City rides.
In addition to the layoffs, Swvl has also announced voluntary salary deductions from the top management team, reduction of current office spaces, and freezing their current hiring program.
Yesterday evening, SWVL announced they are Pausing services in the Kenyan space: “In light of the global economic downturn, we are pausing our Swvl Daily intra-city rides in Nairobi next Friday the 3rd of June, 2022. And Swvl Travel on Sunday the 30th of May, 2022. Swvl Business will still operate to cater to corporations, organizations, and private entities. Anyone with inquiries can always reach us via the Swvl App Help Section. We want to thank you for trusting us. We’re sorry, but we will be back.”
on Pausing its operations in Kenya this means 100 people it directly employs in the country are going to be affected. Swvl works with over 500 bus owners whom have partnered with the company.