It has been more than three months since Egypt’s transportation startup Swvl announced an $8 million Series A round, the largest for any startup of the country.
In their announcement, it was made clear that the capital has been raised by both selling primary and secondary shares. They only had one external shareholder at the time, Careem, that had invested $500,000 as seed funding in Swvl last year.
So it’s only Careem that could’ve sold its stake. There were a lot of rumors about it but both Swvl and Careem declined to comment when I reached out to them to learn the details. Careem could’ve sold the entire stake or a part of it (unlikely but still possible).
According to information that I had learned from a reliable source and that has also surfaced in the media recently, Careem had sold its entire stake in Swvl for $3 million but all the parties; Careem, Swvl, and the VCs who’ve invested in both the companies declined to comment probably because there’s an NDA in place.
With Careem recently confirming its plans to move into bus bookings, there should be no doubts about the fact that Middle Eastern unicorn has exited the hottest Egyptian startup (at the moment) that was co-founded by one of its former employees last year.
In a conversation with MENAbytes, Mostafa Kandil, the co-founder and CEO of Swvl has welcomed the move of former employer to expand into bus bookings saying that they are very proud of the fact that within one year they were able to force a regional giant to move into their territory.
Mostafa, once again, declined to comment on their current arrangement with Careem but had a lot of good things to say about them, “Careem is an innovative company that continues to add new services to their existing offerings. When they felt the pressure from Swvl’s growth, it was obvious for them to join us as competition.”
There have been rumors about Careem trying to acquire Swvl before they closed the $8 million round and Swvl declining the offer. Mostafa declined to confirm or deny this as well.
Speaking about how Careem entering the market will change Swvl’s plans, he said, “One thing I tell my team is that staying focused is the key but when you move the same focus towards your competition, it’s the start of your end. We’ll continue to focus on what we’ve been doing. We still have to wake up every morning thinking its a new day and we have to prove ourselves again regardless of who our competitors are.”
He went on to add that Careem was the first believer in Swvl and that Careem CEO Mudassir Sheikha has always been a mentor for him.
From employer to an investor, and now a competitor, Careem’s relationship with Mostafa has changed quite a lot in less than two years.
It would be interesting to see how the 25-year-old fares in his latest role as a competitor of the ride-hailing giant.
Featured image via Forbes Middle East.