UAE ride-hailing services company Careem has invested $500,000 in a start-up entity which focuses on connecting commuters with private buses in the Egyptian capital city of Cairo. Careem, which is seen as Middle East rival to global ride-hailing colossus Uber, acquired the minority stake in SWVL after weeks of negotiations. It has also been disclosed that in addition to the investment, CEO and co-founder of Careem, Magnus Olsson will also join the board of SWVL.
SWVL is only three-months old, but has already generated the interest of prospective investors after making an immediate impact in the transportation sector in Egypt. Careem, which operates in 12 countries, mainly in the Middle East will look to accelerate SWVL operations, although it declined to disclose the exact size of its minority stake in the organization.
SWVL was founded by a former Careem executive in April, and the company provides a bus transportation service which enables passengers to reserve and pay their fare through SWVL's mobile application. The application formulates and maps the shortest journey time home based on the passenger's location and destination by identifying the nearest bus station that travels along fixed routes.
Careem CEO expressed his desire to see the Egyptian start-up develop quickly, and he believes the best way of enabling that is by keeping the entity independent. Olsson said, "We want them to run and learn and develop at a very high pace and high agility and we believe the best way for them to do that is to stay independent."
Careem announced last month that it had raised $500m from investors such as German car manufacturer Daimler and Saudi Arabia's Kingdom Holding. It said the investment would help them accelerate their expansion plans. SWVL is unlike Careem and Uber in the sense that it isn't an on-demand service, but it has a strong foundation of over 50,000 passenger and 200 buses using the mobile application.
Chief executive of SWVL, Mostafa Kondil said its primary objective is to really improve the product and disclosed that it is targeting 300,000 monthly trips by the end of 2017. Analysts have suggested that SWVL will utilize the investment made by Careem in order to increase its workforce, develop new app features and expand into other cities beyond Cairo, and to Middle Eastern and Asian countries such as Saudi Arabia, Jordan and Pakistan next year.