DUBAI: Ride-hailing firm Careem has acquired a minority stake in a three month-old Egyptian start up that connects commuters with private buses in Cairo.
Careem invested $500,000 (SR1.88 billion) in Swvl and Magnus Olsson, the Dubai-based firm’s chief experience officer and co-founder, will take a board seat. It did not disclose the exact size of the stake.
Swvl, founded in April by a former Careem executive, is a bus transportation service where passengers can reserve and pay their fare through the company’s mobile app.
The app uses the passenger’s location and destination to find the shortest possibly journey time based on the nearest bus station that travels along fixed routes.
Users of the Egyptian ride-hailing app can book fixed-route bus trips at prices 60 percent to 80 percent lower than competing ride-hailing services and without surge or peak pricing.
“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,” Olsson said.
Careem, which operates in 12 countries mainly in the Middle East, said last month that would speed up expansion plans after raising $500 million from investors, including German carmaker Daimler and Saudi Arabia’s Kingdom Holding.
Swvl, which is not an on-demand service like Uber and Careem, has 50,000 passengers and 200 buses using the mobile app, said Mostafa Kondil, the chief executive and co-founder.
It is targeting 300,000 monthly trips by the end of 2017, he said, claiming that it has been signing up a customer per minute since launch.
Swvl will use the Careem investment to increase its workforce, develop new app features, and to expand in Cairo and into other cities, including Egypt’s second-largest city Alexandria, and to Middle Eastern and Asian countries such as Saudi Arabia, Jordan and Pakistan next year.
“We’re planning to really improve our product,” Kondil said.