Mass transit group Swvl has confirmed to TechCrunch its deal to buy U.K. startup Zeelo, estimated to be a $100 million acquisition, according to sources.
The Egyptian-born startup that provides shared transportation services for intercity and intracity trips, recently expanded into Turkey with its acquisition of Volt Lines. Earlier this year it went public (NASDAQ: SWVL) via a SPAC.
The agreement to acquire Zeelo, which claims to be the U.K.’s largest ‘smart bus’ platform aimed at manual workers and students, adds to Swvl’s recent acquisitions of Viapool and Shotl, as well as the announced acquisitions of Volt Lines and door2door.
The deal means Swvl will be able to expand into the U.K., South Africa and the U.S. via Zeelo's footprint, which has 160+ U.K.- and Barcelona-based staff.
Zeelo's model is about shifting from single occupancy vehicles to zero-emission mass transit to work locations. The acquisition is expected to be completed in May 2022.
Mostafa Kandil, Swvl Founder and CEO, said in a statement:
Swvl was founded on the belief that accessible transportation is essential to unlocking economic opportunity. Swvl and Zeelo share a vision and mission to provide reliable transportation that gets riders where they need to go in an affordable, safe, and environmentally-friendly manner.
The company says the transaction will expand Swvl B2B offering with a managed TaaS (transport as a service) platform that connects riders via their employers and schools to operators and drivers; a SaaS licensing platform for third-party fleet operators; partnerships with existing fleet partners (such as 200 bus operators in the U.K. and the U.S.).
Sam Ryan, Zeelo Founder and CEO, added:
Swvl is revolutionizing the mass transit industry and we are thrilled to join forces with them on this next phase … Bus transport done well with tech can take us beyond our dependency on cars and taxis which are not suitable for commutes from non-urban areas … especially shift workers, professionals and students living in transport-poor areas in the developed markets.
Swvl and Zeelo, and the better-known Via in the U.S. or FlixBus in Germany, hope to disrupt the public transport industry with their booking platform for private buses. This means buses are more responsive to demand than scheduled routes. There is also an environmental angle as it takes private cars off the road. Shares in Swvl, valued at $850 million, have dropped during the broader fall in tech shares.
Zeelo was founded by two British entrepreneurs who sold their startup to Addison Lee in 2014.
It’s raised $19.6 million in total. The last round was a $12 million Series A round led by ETF Partners (Environmental Technologies Fund) with participation from InMotion Ventures (Jaguar Land Rover’s corporate venture fund) and Dynamo (a U.S.-based venture capital investor in mobility and supply chain), which closed in August 2021. Angel investors include Liam Griffin (CEO Addison Lee), who was the first backer of the business.