F-1/A
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As filed with the Securities and Exchange Commission on June 24, 2022

Registration No. 333-264418

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Amendment No. 2

to

FORM F-1

REGISTRATION STATEMENT

Under

The Securities Act of 1933

 

 

Swvl Holdings Corp

(Exact name of Registrant as specified in its charter)

 

 

Not Applicable

(Translation of Registrant’s name into English)

 

 

 

British Virgin Islands   7372   98-1614508

(State or Other Jurisdiction of

Incorporation or Organization)

 

(Primary Standard Industrial

Classification Code Number)

 

(I.R.S. Employer

Identification Number)

The Offices 4, One Central

Dubai World Trade Center

Dubai, United Arab Emirates

+971 422411293

(Address, including zip code, and telephone number, including area code, of Registrant’s principal executive offices)

 

 

Cogency Global Inc.

122 East 42nd Street, 18th Floor

New York, NY 10168

(212) 947-7200

(Name, address, including zip code, and telephone number, including area code, of agent for service)

 

 

Copies to:

Nicholas A. Dorsey

Cravath, Swaine & Moore LLP

Worldwide Plaza

825 Eighth Avenue

New York, NY 10019

(212) 474-1000

 

 

Approximate date of commencement of proposed sale to the public: As soon as practicable after this registration statement becomes effective.

If any of the securities being registered on this Form are to be offered on a delayed or continuous basis pursuant to Rule 415 under the Securities Act of 1933 (as amended, the “Securities Act”), check the following box.  ☒

If this Form is filed to register additional securities for an offering pursuant to Rule 462(b) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(c) under the Securities Act, check the following box and list the Securities Act registration statement number of the earlier effective registration statement for the same offering.  ☐

If this Form is a post-effective amendment filed pursuant to Rule 462(d) under the Securities Act, check the following box and list the Securities Act registration number of the earlier effective registration statement for the same offering.  ☐

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933.

Emerging growth company  ☒

If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards† provided pursuant to Section 7(a)(2)(B) of the Securities Act.  ☐

 

The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.

 

 

The Registrant hereby amends this registration statement on such date or dates as may be necessary to delay its effective date until the Registrant shall file a further amendment which specifically states that this registration statement shall thereafter become effective in accordance with Section 8(a) of the Securities Act, as amended, or until the registration statement shall become effective on such date as the U.S. Securities and Exchange Commission, acting pursuant to said Section 8(a), may determine.

 

 

 


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The information in this preliminary prospectus is not complete and may be changed. These securities may not be sold until the registration statement filed with the Securities and Exchange Commission is effective. This preliminary prospectus are not an offer to sell these securities and are not soliciting an offer to buy these securities in any jurisdiction where such offer or sale is not permitted.

 

Subject to Completion, dated June 24, 2022

PRELIMINARY PROSPECTUS

Swvl Holdings Corp

102,939,766 CLASS A ORDINARY SHARES

 

 

This prospectus relates to the offer and sale from time to time by B. Riley Principal Capital, LLC (the “Selling Securityholder” or “B. Riley”) of up to 102,939,766 Class A Ordinary Shares. The shares included in this prospectus consist of Class A Ordinary Shares that we have issued or that we may, in our discretion, elect to issue and sell to the Selling Securityholder, from time to time after the date of this prospectus, pursuant to an ordinary shares purchase agreement we entered into with the Selling Securityholder on March 22, 2022 (as amended from time to time, the “Purchase Agreement”), in which the Selling Securityholder has committed to purchase from us, at our direction, up to $471,742,855 of our Class A Ordinary Shares, subject to terms and conditions specified in the Purchase Agreement. Pursuant to the Purchase Agreement, on April 6, 2022, we issued 386,971 Class A Ordinary Shares to the Selling Securityholder as consideration for its irrevocable commitment to purchase our Class A Ordinary Shares at our election in our sole discretion, from time to time after the date of this prospectus, upon the terms and subject to the satisfaction of the conditions set forth in the Purchase Agreement. See the section titled “Committed Equity Financing” for a description of the Purchase Agreement and the section titled “Selling Securityholder” for additional information regarding the Selling Securityholder.

The Selling Securityholder may sell or otherwise dispose of the Class A Ordinary Share included in this prospectus in a number of different ways and at varying prices. See the section titled “Plan of Distribution” for more information about how the Selling Securityholder may sell or otherwise dispose of the Class A Ordinary Shares being offered in this prospectus. The Selling Securityholder is an “underwriter” within the meaning of Section 2(a)(11) of the Securities Act.

We will not receive any proceeds from the sale of the securities by the Selling Securityholder. However, we may receive up to $471,742,855 in aggregate gross proceeds from sales of our Class A Ordinary Shares to the Selling Securityholder that we may, in our discretion, elect to make, from time to time after the date of this prospectus, pursuant to the Purchase Agreement.

Our Class A Ordinary Shares are listed on the Nasdaq Stock Market LLC (“Nasdaq”), under the trading symbols “SWVL”. On June 21, 2022, the closing price for our Class A Ordinary Shares on Nasdaq was $6.57.

The Class A Ordinary Shares being offered for resale in this prospectus (the “Resale Securities”) represent a substantial percentage of the total outstanding shares of our Class A Ordinary Shares as of the date of this prospectus. Assuming the issuance of all of the Resale Securities to the Selling Securityholder under the Purchase Agreement, the Resale Securities would represent approximately 46% of the then-outstanding Class A Ordinary Shares (assuming the Class A Ordinary Shares issuable upon the achievement of certain stock price thresholds pursuant to the Business Combination are not outstanding, or 43% assuming they are outstanding). The sale of all of the Resale Securities, or the perception that these sales could occur, could result in a significant decline in the public trading price of our Class A Ordinary Shares. In addition to the Selling Securityholder, certain other shareholders, including the PIPE Investors, the Sponsor, former holders of the Swvl Exchangeable Notes and Legacy Swvl equityholders (each as defined below and collectively, the “Additional Sellers”) may sell a substantial number of our securities pursuant to a separate resale prospectus (the “Additional Prospectus”). The sale of the Resale Securities together with the sale of the securities held by the Additional Sellers, or the perception that these sales could occur, could depress the market price of our securities.

We may amend or supplement this prospectus from time to time by filing amendments or supplements as required. You should read this entire prospectus and any amendments or supplements carefully before you make your investment decision.

We are an “emerging growth company” and a “foreign private issuer”, each as defined under the U.S. federal securities laws and, as such, may elect to comply with certain reduced public company disclosure and reporting requirements. See “Prospectus Summary—Emerging Growth Company” and “Prospectus Summary—Foreign Private Issuer”, respectively.

 

 

Investing in our securities involves a high degree of risk. You should carefully review the risks and uncertainties described under the heading “Risk Factors” beginning on page 15 of this prospectus before you make an investment in the securities.

Neither the Securities and Exchange Commission (the “SEC”) nor any state or foreign securities commission has approved or disapproved of these securities or determined if this prospectus is truthful or complete. Any representation to the contrary is a criminal offense.

Prospectus dated             , 2022


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TABLE OF CONTENTS

 

TRADEMARKS, SERVICE MARKS AND TRADE NAMES

     ii  

CURRENCY AND EXCHANGE RATES

     ii  

INDUSTRY AND MARKET DATA

     ii  

ABOUT THIS PROSPECTUS

     ii  

PRESENTATION OF FINANCIAL INFORMATION

     iv  

NON-IFRS FINANCIAL MEASURES

     iv  

CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

     vi  

PROSPECTUS SUMMARY

     1  

THE OFFERING

     13  

RISK FACTORS

     15  

COMMITTED EQUITY FINANCING

     58  

CAPITALIZATION AND INDEBTEDNESS

     69  

UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

     70  

USE OF PROCEEDS

     86  

MARKET PRICE OF OUR SECURITIES AND DIVIDEND POLICY

     87  

BUSINESS

     88  

OPERATING AND FINANCIAL REVIEW AND PROSPECTS

     99  

MANAGEMENT

     121  

COMPENSATION

     126  

BENEFICIAL OWNERSHIP OF CLASS A ORDINARY SHARES

     128  

SELLING SECURITYHOLDER

     130  

CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS

     132  

DESCRIPTION OF SECURITIES

     135  

CLASS A ORDINARY SHARES ELIGIBLE FOR FUTURE SALE

     143  

TAXATION

     147  

PLAN OF DISTRIBUTION

     151  

EXPENSES RELATED TO THE OFFERING

     153  

LEGAL MATTERS

     154  

EXPERTS

     155  

SERVICE OF PROCESS AND ENFORCEMENT OF CIVIL LIABILITIES UNDER U.S. SECURITIES LAWS

     156  

WHERE YOU CAN FIND ADDITIONAL INFORMATION

     157  

INDEX TO FINANCIAL STATEMENTS

     F-1  

Except as otherwise set forth in this prospectus, we have not taken any action to permit a public offering of these securities outside the United States or to permit the possession or distribution of this prospectus outside the United States. Persons outside the United States who come into possession of this prospectus must inform themselves about and observe any restrictions relating to the offering of these securities and the distribution of this prospectus outside the United States.

 

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TRADEMARKS, SERVICE MARKS AND TRADE NAMES

This prospectus includes certain trademarks, service marks and trade names, such as “Swvl”, which are registered under applicable intellectual property laws and are Swvl’s property or for which Swvl has pending applications or common law rights. Solely for convenience, trademarks, service marks and trade names referred to in this prospectus are listed without any ®, or other symbols, but Swvl intends to assert, to the fullest extent under applicable law, its right or the rights of the applicable licensors to these trademarks, service marks and trade names. This prospectus contains additional trademarks, service marks and trade names of others, which are, to our knowledge, the property of their respective owners. The use or display of other companies’ trademarks, service marks or trade names should not be interpreted to imply a relationship with, or endorsement or sponsorship of us by, any other companies.

CURRENCY AND EXCHANGE RATES

In this prospectus, unless otherwise specified, all monetary amounts are in U.S. dollars and all references to “$” mean U.S. dollars. Certain monetary amounts described herein have been expressed in U.S. dollars for convenience only and, when expressed in U.S. dollars in the future, such amounts may be different from those set forth herein due to intervening exchange rate fluctuations.

INDUSTRY AND MARKET DATA

Unless otherwise indicated, information contained in this prospectus concerning Swvl’s industry, including Swvl’s general expectations and market position, market opportunity and market share, is based on information obtained from various independent publicly available sources and reports, as well as management estimates. Swvl has not independently verified the accuracy or completeness of any third-party information. While Swvl believes that the market data, industry forecasts and similar information included in this prospectus are generally reliable, such information is inherently imprecise. Forecasts and other forward-looking information obtained from third parties are subject to the same qualifications and uncertainties as the other forward-looking statements in this prospectus. In addition, assumptions and estimates of Swvl’s future performance and growth objectives and the future performance of its industry and the markets in which it operates are necessarily subject to a high degree of uncertainty and risk due to a variety of factors, including those discussed under the headings “Risk Factors”, “Cautionary Note Regarding Forward-Looking Statements” and “Operating and Financial Review and Prospects” in this prospectus.

ABOUT THIS PROSPECTUS

This prospectus is part of a registration statement on Form F-1 filed with the SEC by Swvl Holdings Corp. The Selling Securityholder named in this prospectus may, from time to time, sell the securities described in this prospectus in one or more transactions. This prospectus includes important information about us, the securities being offered by the Selling Securityholder and other information you should know before investing. Any prospectus supplement may also add, update, or change information in this prospectus. If there is any inconsistency between the information contained in this prospectus and any prospectus supplement, you should rely on the information contained in that particular prospectus supplement. This prospectus does not contain all of the information provided in the registration statement that we filed with the SEC. You should read this prospectus together with the additional information about us described in the section below entitled “Where You Can Find Additional Information.” You should rely only on information contained in this prospectus, any prospectus supplement and any related free writing prospectus. We have not, and the Selling Securityholder have not, authorized anyone to provide you with information different from that contained in this prospectus, any prospectus supplement and any related free writing prospectus. The information contained in this prospectus is accurate only as of the date on the front cover of the prospectus. You should not assume that the information contained in this prospectus is accurate as of any other date.

 

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Discrepancies in any table between totals and sums of the amounts listed are due to rounding. Certain amounts and percentages have been rounded; consequently, certain figures may add up to be more or less than the total amount and certain percentages may add up to be more or less than 100% due to rounding.

Throughout this prospectus, unless otherwise designated or the context otherwise requires, the terms “we”, “us”, “our”, “Holdings”, “Swvl”, “the Company” and “our company” refer to Swvl Holdings Corp and its subsidiaries; provided, however, that when used with reference to the period prior to the consummation of the Business Combination, the terms “Swvl” or “Legacy Swvl” refer to Swvl Inc. and its subsidiaries.

 

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PRESENTATION OF FINANCIAL INFORMATION

SPAC

The historical financial statements of Queen’s Gambit Growth Capital (“SPAC”) as of December 31, 2020 and 2021, and the period from December 9, 2020 (inception) through December 31, 2020 and for the year ended December 31, 2021, were prepared in accordance with generally accepted accounting principles in the United States (“U.S. GAAP”) and are denominated in U.S. dollars.

Swvl

The historical financial statements of Swvl as of and for the years ended December 31, 2019, 2020 and 2021 were prepared in accordance with International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board (“IASB”) and are denominated in U.S. dollars.

NON-IFRS FINANCIAL MEASURES

Swvl reports certain financial information using non-IFRS financial measures, including Adjusted EBITDA. Swvl believes that these measures provide information that is useful to investors in understanding the performance of Swvl and facilitate a comparison of Swvl’s interim and full-year results from period to period. These non-IFRS financial measures do not have any standardized meaning under IFRS and may not be comparable with similar measures used by other companies. For certain non-IFRS financial measures, there are no directly comparable amounts under IFRS. The presentation of the non-IFRS financial measures included herein is not meant to be considered in isolation or as a substitute for Swvl’s audited consolidated financial results or condensed interim consolidated financial results prepared in accordance with IFRS. For more information on the non-IFRS financial measures used in this prospectus, please see “Operating and Financial Review and Prospects—Key Business and Non-IFRS Financial Measures”.

CERTAIN DEFINED TERMS

Unless the context otherwise requires, references in this prospectus to:

 

   

“Articles” are to the Second Amended and Restated Memorandum and Articles of Association of the Company;

 

   

“B2B” are to “business to business”;

 

   

“B2C” are to “business to consumer”;

 

   

“Board” are to the board of directors of the Company;

 

   

“bookings” are to seats that have been reserved by riders on a ride;

 

   

“Business Combination Agreement” are to that certain Business Combination Agreement, dated as of July 28, 2021, by and among Swvl, SPAC, the Company, Cayman Merger Sub and BVI Merger Sub, as amended;

 

   

“Business Combination” are to the transactions effected by the Business Combination Agreement;

 

   

“BVI” are to the British Virgin Islands;

 

   

“BVI Companies Act” are to the BVI Business Companies Act (as amended);

 

   

“BVI Merger Sub” are to Pivotal Merger Sub Company II Limited, a British Virgin Islands business company limited by shares incorporated under the laws of the British Virgin Islands;

 

   

“captains” are to drivers using Swvl’s platform;

 

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“Cayman Merger Sub” are to Pivotal Merger Sub Company I, a Cayman Islands exempted company with limited liability;

 

   

“Earnout RSUs” are to restricted stock units in respect of Earnout RSU Shares;

 

   

“Earnout RSU Shares” are to Class A Ordinary Shares that will be issued in settlement of Earnout RSUs upon the achievement of certain price targets or occurrence of a “change of control” event, as more fully described in the section titled “Class A Ordinary Shares Eligible for Future Sale—Earnout”;

 

   

“Earnout Shares” are to the up to 15,000,000 additional Class A Ordinary Shares (inclusive of Earnout RSU Shares) issuable pursuant to the Business Combination Agreement upon the achievement of certain price targets or the occurrence of a “change of control” event, as more fully described in the section titled “Class A Ordinary Shares Eligible for Future Sale—Earnout”;

 

   

“Exchange Act” are to the Securities Exchange Act of 1934;

 

   

“FINRA” are to the Financial Industry Regulatory Authority;

 

   

“Lock-Up Agreement” are to the Lock-Up Agreement entered into concurrently with the execution and delivery of the Business Combination Agreement by and among the Company, certain shareholders of SPAC and certain shareholders of Legacy Swvl effective as of the Closing;

 

   

“Private Placement Warrants” are to the warrants the SPAC originally issued to the Sponsor in a private placement prior to the Business Combination and which, pursuant to the Business Combination Agreement and the Warrant Agreement, were subsequently assumed by Swvl, and converted into warrants of Swvl, upon consummation of the Business Combination;

 

   

“Public Warrants” are to the warrants the SPAC issued in connection with its initial public offering and which, pursuant to the Business Combination Agreement and the Warrant Agreement, were subsequently assumed by Swvl, and converted into warrants of Swvl, upon consummation of the Business Combination;

 

   

“riders” are to persons filling seats on rides;

 

   

“Sarbanes-Oxley Act” are to the Sarbanes-Oxley Act of 2002;

 

   

“seats” are to physical spaces on rides that can be booked by riders;

 

   

“Service Provider” are to any employee, officer, director, individual independent contractor or individual consultant of Swvl;

 

   

“SPAC” are to Queen’s Gambit Growth Capital, a Cayman Islands exempted company with limited liability;

 

   

“Sponsor” are to Queen’s Gambit Holdings LLC, a Delaware limited liability company;

 

   

“Warrants” are to the Public Warrants and Private Placement Warrants; and

 

   

“Warrant Agreement” are to the Warrant Agreement, dated January 19, 2021, between SPAC and Continental Stock Transfer & Trust Company, as warrant agent, as amended.

 

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CAUTIONARY NOTE REGARDING FORWARD-LOOKING STATEMENTS

Some of the statements contained in this prospectus constitute forward-looking statements within the meaning of the U.S. federal securities laws. Forward-looking statements include all matters that are not historical facts, and generally relate to expectations, beliefs, projections, future plans and strategies, anticipated events or trends and similar expressions. Forward-looking statements reflect our current views with respect to, among other things, the benefits of the Business Combination, the Company’s capital resources, results of operation, financial condition, liquidity, prospects, growth and strategies, future market conditions, economic performance and developments in the capital and credit markets. In some cases, you can identify these forward-looking statements by the use of terminology such as “outlook,” “believes,” “expects,” “potential,” “continues,” “may,” “will,” “should,” “could,” “seeks,” “approximately,” “predicts,” “intends,” “plans,” “estimates,” “anticipates” or the negative version of these words or other comparable words or phrases, but the absence of these words does not mean that a statement is not forward-looking.

The forward-looking statements contained in this prospectus reflect our current views about future events and are subject to numerous known and unknown risks, uncertainties, assumptions and changes in circumstances that may cause its actual results, levels of activity, performance, or achievements to differ significantly from those expressed in any forward-looking statement. The following factors, among others, could cause actual results and future events to differ materially from those set forth or contemplated in the forward-looking statements:

 

   

the ability to obtain or maintain the listing of our securities on Nasdaq;

 

   

the risk that the consummation of the transactions disrupts current plans and operations of Swvl;

 

   

the parties’ ability to realize the anticipated benefits of the Business Combination, which may be affected by, among other things, competition and the ability of Swvl to grow and manage growth profitably;

 

   

Swvl’s incurrence of substantial transaction costs related to the Business Combination;

 

   

Swvl’s success in attracting and retaining riders and qualified drivers or changes in its officers, key employees or directors following the Business Combination;

 

   

the risk of reputational challenges based on the behavior of drivers using Swvl’s platform or performance of its operations, including safety, reliability and quality of its services;

 

   

changes in applicable laws or regulations;

 

   

the possibility that COVID-19 may adversely affect the results of operations, financial position, and cash flows of Swvl;

 

   

technological changes, particularly across the SaaS/TaaS vertical;

 

   

the inability of our management team to properly manage a public company, which may result in difficulty adequately operating and growing its business;

 

   

data security or privacy breaches, as well as defects, errors, outages or vulnerabilities in Swvl’s technology and that of third-party providers; and

 

   

the possibility that Swvl may be adversely affected by other economic, business, legal or competitive factors.

While forward-looking statements reflect our good faith beliefs, they are not guarantees of future performance. Except as otherwise required by applicable law, we disclaim any obligation to publicly update or revise any forward-looking statement to reflect changes in underlying assumptions or factors, new information, data or methods, future events or other changes after the date of this prospectus, except as required by applicable law. For a further discussion of these and other factors that could cause our future results, performance or transactions to differ significantly from those expressed in any forward-looking statement, please see the section entitled “Risk Factors.” You should not place undue reliance on any forward-looking statements, which are based only on information currently available to us.

 

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PROSPECTUS SUMMARY

This summary highlights certain information about us, this offering and selected information contained elsewhere in this prospectus. This summary is not complete and does not contain all of the information that you should consider before deciding whether to invest in the securities covered by this prospectus. You should read the following summary together with the more detailed information in this prospectus, any related prospectus supplement and any related free writing prospectus, including the information set forth in the section titled “Risk Factors” in this prospectus, any related prospectus supplement and any related free writing prospectus in their entirety before making an investment decision.

Overview

We are a technology-driven disruptive mobility company that aims to provide reliable, safe, cost-effective and environmentally responsible mass transit solutions. Our mission is to identify and solve inefficiencies associated with low-quality or sometimes non-existent public transportation infrastructure in urban areas that are in critical need of such services. Our technology and services provide commuters, travelers and businesses with a valuable alternative to traditional public transportation, taxi companies or other ridesharing companies. Through our Swvl platform, we provide thousands of riders per day with a dynamically-routed self-optimizing network of minibuses and other vehicles, helping people get where they need to go.

Our core product is our business to consumer (“B2C”) Swvl Retail offering, which provides riders with a network of minibuses and other vehicles running on fixed or semi-fixed routes within cities. Commuters use our Swvl mobile application to book rides between pre-defined pick-up points located throughout the city. Our service is powered by a suite of proprietary technologies that regularly optimize routing, predict rider demand, set pricing and provide a seamless user experience for customers and drivers. We believe that our platform offers a transportation alternative that is more efficient, reliable and safe than traditional public transportation options, at an accessible price point. This has allowed us to grow our business rapidly. As of December 31, 2021, more than 2.1 million users have booked more than 73.3 million rides on Swvl.

With our Swvl Travel offering, riders can book rides on long-distance intercity routes on either vehicles available exclusively through the Swvl platform or through third-party services marketed through Swvl.

Leveraging the technology that we use for our Retail and Travel offerings, we also offer “transport as a service” (“TaaS”) enterprise products (marketed as Swvl Business) for businesses, schools, municipal transit agencies and other customers that operate their own transportation programs. These products include, among other things, access to our Swvl Business platform, use of our proprietary technologies, consulting and reporting services and use of the vehicles and drivers on our network to operate such transportation programs. We package our TaaS products to meet the specific needs of each customer. As of December 31, 2021, more than 250 companies across diverse industries, including technology, finance, food and beverage, consulting and healthcare, use our TaaS products. We also announced plans to expand our Swvl Business offering by introducing “software as a service” (“SaaS”) products in 2022, which will allow customers with their own vehicle fleets to utilize the benefits of our platform and technologies.

Our business was founded on February 8, 2017 by Mostafa Kandil, our Chief Executive Officer, Mahmoud Nouh and Ahmed Sabbah. We launched our first commuter services in Cairo, Egypt in March 2017, before expanding to Alexandria, Egypt the same year. As of December 31, 2021, we have expanded our operations to multiple cities across seven countries, with our core Retail offering available in select cities in Egypt, Kenya, Pakistan and Jordan. In January 2019, we commenced operations in Nairobi, Kenya. Namely, in the second half of 2019, we commenced operations in major cities in Pakistan, including Lahore, Islamabad and Karachi, and relocated our headquarters from Cairo, Egypt to Dubai, United Arab Emirates. In 2020 and 2021, we also launched TaaS offerings in the United Arab Emirates, Jordan, Saudi Arabia and Malaysia.

 

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Recent Developments

Announcement of Portfolio Optimization Program

On May 31, 2022, Swvl announced its implementation of a portfolio optimization program featuring a renewed focus on its highest profitability operations, enhanced efficiency and reduced costs to accelerate its path to profitability. The Company’s portfolio optimization program will include a focus on the growth of its TaaS and SaaS business, focus on and optimization of its B2C business, continued investment in developing its proprietary technology and a reduction of its employee headcount by approximately 32%.

Definitive Agreement to Acquire Zeelo

On April 28, 2022, Swvl announced a definitive agreement to acquire Zeelo LTD. (“Zeelo”), the UK’s largest smart bus platform and technology scale-up, measured by bookings. We believe joining forces with Zeelo provides a launchpad to rapidly land and expand business operations in three strategic developed markets including the UK, South Africa and the US with Zeelo’s seasoned team of over 160 staff across the globe, including 29 software engineers based out of Zeelo’s R&D hub in Barcelona. This transaction will involve Swvl issuing shares as part of the transaction consideration, which will dilute current shareholders. See the section titled “Risk Factors—Risks Related to Operational Factors Affecting Swvl—Swvl’s acquisitions of controlling interests in Shotl and Viapool and acquisitions of Volt Lines and door2door and announced acquisition of Zeelo may not be beneficial to Swvl as a result of the cost of integrating geographically disparate operations and the diversion of management’s attention from Swvl’s existing business, among other things, and those transactions involve the issuance of equity securities, which dilutes the interests of our existing shareholders. In addition, Swvl may not consummate all acquisitions that it announces.

Our acquisition of Zeelo did not close in May 2022 as originally expected. At this time, with recent market changes, such as declining stock market values and the related increase in cost of equity capital, certain completion deliverables remaining outstanding as of the date of this prospectus and the ongoing discussions between the parties around modifications to the transaction, including whether to continue to pursue the transaction, there is no certainty as to whether the transaction will complete, and if so on what terms, nor whether any potential disputes may raise.

Acquisitions of Volt Lines and Door2Door

On April 25, 2022, we announced a definitive agreement to acquire Volt Lines B.V. (“Volt Lines”), a Turkey-based B2B and Transport as a Service mobility business. The transaction closed on May 25, 2022. On March 24, 2022, Swvl announced a definitive agreement to acquire Door2Door GmbH (“door2door”), a high-growth mobility operations platform that partners with municipalities, public transit operators, corporations, and automotive companies to optimize shared mobility solutions across Europe. The transaction closed on June 3, 2022. The acquisitions build on Swvl’s recent acquisitions of controlling stakes in Shotl Transportation, S.L. (“Shotl”) and Viapool Inc. (“Viapool”), and pending acquisition of Zeelo. These transactions will involve Swvl issuing shares as part of the transaction consideration, which will dilute current shareholders. See the section titled “Risk Factors—Risks Related to Operational Factors Affecting Swvl—Swvl’s acquisitions of controlling interests in Shotl and Viapool and acquisitions of Volt Lines and door2door and announced acquisition of Zeelo may not be beneficial to Swvl as a result of the cost of integrating geographically disparate operations and the diversion of management’s attention from Swvl’s existing business, among other things, and those transactions involve the issuance of equity securities, which dilutes the interests of our existing shareholders. In addition, Swvl may not consummate all acquisitions that it announces.

First Quarter 2022 Key Business Measures

On April 13, 2022, the Company released key business measures for the quarter ended March 31, 2022. The Company reported total ticket fares of $27 million for the first quarter 2022, representing an increase of

 

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approximately 27% from the prior quarter and a 4.0x increase from the first quarter 2021. The average ticket fare for the first quarter 2022 was $1.73, with average cost per available seat for the first quarter 2022 of $1.28, 74% of average ticket fare. Ticket fare growth was driven by the Company’s user-centric ecosystem, robust geographic expansions and a swift turnaround from the impact of Covid (total ticket fares for the first quarter represented a 2.7x increase from pre-Covid levels). Bookings increased 25% in the first quarter 2022 since the fourth quarter 2021 and, including first quarter 2022 bookings, aggregate bookings since the start of operations crossed 90 million. Bookings increased approximately 3.9x year-over-year and increased approximately 2.3x from 2020 levels before the onset of the pandemic. Fleet utilization levels remained high at 82% for the first quarter 2022. The Company also achieved a 25% increase in total available seats and bookings growth of 25% in the first quarter 2022 from the prior quarter.

Business Combination

On March 31, 2022, the Company consummated the previously announced business combination pursuant to the Business Combination Agreement. Pursuant to the Business Combination Agreement, among other things, (a) SPAC merged with and into Cayman Merger Sub (the “SPAC Merger”), with Cayman Merger Sub surviving the SPAC Merger (Cayman Merger Sub, in its capacity as the surviving company of the SPAC Merger, the “SPAC Surviving Company”) and becoming the sole owner of all of the issued and outstanding shares, par value $1.00 per share, of BVI Merger Sub (each, a “BVI Merger Sub Common Share”), (b) concurrently with the consummation of the SPAC Merger, the Company redeemed each Class A Ordinary Share and each Class B ordinary share, par value $0.0001, of the Company (each, a “Common Share B”) issued and outstanding immediately prior to the SPAC Merger for par value, (c) following the SPAC Merger, the SPAC Surviving Company distributed all of the issued and outstanding BVI Merger Sub Common Shares to the Company (the “BVI Merger Sub Distribution”) and (d) following the BVI Merger Sub Distribution, BVI Merger Sub merged with and into Legacy Swvl (the “Company Merger”), with Legacy Swvl surviving the Company Merger as a wholly owned subsidiary of the Company. As a result of the Business Combination, the SPAC Surviving Company and Legacy Swvl each became wholly owned subsidiaries of the Company and the securityholders of SPAC and Legacy Swvl became securityholders of the Company.

As part of the Business Combination, at the effective time of the SPAC Merger (the “SPAC Merger Effective Time”), among other things, (a) each Class A ordinary share, par value $0.0001 per share, of SPAC (each, a “SPAC Class A Ordinary Share”) issued and outstanding immediately prior to the SPAC Merger Effective Time was automatically cancelled, extinguished and converted into the right to receive one Class A Ordinary Share and (b) each Class B ordinary share, par value $0.0001 per share, of SPAC, was automatically cancelled, extinguished and converted into the right to receive one Common Share B, (c) each fraction of or whole warrant to purchase SPAC Class A Ordinary Shares (each, a “SPAC Warrant”) issued, outstanding and unexercised immediately prior to the SPAC Merger Effective Time was automatically assumed and converted into a fraction or whole Warrant, to acquire (in the case of a whole warrant) one Class A Ordinary Share, subject to the same terms and conditions (including exercisability terms) as were applicable to the corresponding former warrants of SPAC and (d) without duplication of the foregoing, each unit of SPAC, comprised of one SPAC Class A Ordinary Share and one-third of one SPAC Warrant, existing and outstanding immediately prior to the SPAC Merger Effective Time was automatically cancelled, extinguished and converted into one unit of the Company (each, a “Unit”), comprised of one Class A Ordinary Share and one-third of one Warrant.

As part of the Business Combination, at the effective time of the Company Merger (the “Company Merger Effective Time”), among other things, (a) the Units separated into their component securities and ceased to exist, (b) all of Legacy Swvl’s ordinary common shares A of no par value, all of Legacy Swvl’s ordinary common shares B of no par value (“Common Shares B”) and all preferred shares of Legacy Swvl (collectively, “Legacy Swvl Shares”) outstanding immediately prior to the Company Merger Effective Time (excluding any Legacy Swvl Shares held in treasury by Legacy Swvl) were automatically cancelled, extinguished and converted into the

 

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right to receive (i) a number of Class A Ordinary Shares equal to an exchange ratio of approximately 1509.96x, and (ii) upon the satisfaction of certain conditions set forth in the Business Combination Agreement, the applicable per share earnout consideration (the “Per Share Earnout Consideration”), in each case without interest and (c) each then outstanding and unexercised option to purchase Common Shares B (each, a “Legacy Swvl Option”), whether or not vested, were assumed and converted into (i) an option to purchase a number of Class A Ordinary Shares (such option, an “Exchanged Option”) equal to the product of (A) the number of Common Shares B subject to such Legacy Swvl Option (assuming payment in cash of the exercise price of such Legacy Swvl Option) immediately prior to the Company Merger Effective Time multiplied by (B) the exchange ratio, at an exercise price per share equal to (x) the exercise price per share of such Legacy Swvl Option immediately prior to the Company Merger Effective Time, divided by (y) the exchange ratio (which option will remain subject to the same vesting terms as such Legacy Swvl Option) and (ii) a number of restricted stock units that will be settled in Class A Ordinary Shares upon the satisfaction of certain price targets or the occurrence of a “change of control” event. Concurrently with the consummation of the Company Merger at the Company Merger Effective Time, then outstanding convertible notes of Legacy Swvl also converted into the right to receive Class A Ordinary Shares.

In connection with the transactions contemplated by the Business Combination Agreement, SPAC and the Company entered into subscription agreements (the “PIPE Subscription Agreements”) with a number of investors (the “PIPE Investors”), pursuant to which the PIPE Investors agreed to purchase, and the Company agreed to sell to the PIPE Investors in a private placement at or after the Company Merger Effective Time, Class A Ordinary Shares for a purchase price of $10.00 per share, representing an aggregate purchase price of $49.7 million, of which $39.7 million was received by the Company at the Company Merger Effective Time. In addition, Legacy Swvl issued $71.8 million of exchangeable notes (the “Swvl Exchangeable Notes”) to investors, including certain of the PIPE Investors, which such Swvl Exchangeable Notes were automatically exchanged for Class A Ordinary Shares. The aggregate number of Class A Ordinary Shares issued as of the date of this prospectus in connection with the PIPE Subscription Agreements and the Swvl Exchangeable Notes was 12,188,711.

The Business Combination was consummated on March 31, 2022. As a result of the Business Combination, the SPAC Surviving Company and Legacy Swvl each became wholly owned subsidiaries of the Company. On April 1, 2022, the Class A Ordinary Shares and Warrants (together, the “Securities” or the “Swvl Securities”) commenced trading on Nasdaq, under the new tickers “SWVL” and “SWVLW,” respectively. The Units, having automatically separated into their component securities at the Company Merger Effective Time, have ceased to be outstanding.

Certain of the Additional Sellers beneficially own approximately 47% of our outstanding Class A Ordinary Shares and, subject to the contractual lock-ups described below, may sell all of their Class A Ordinary Shares in the public market at any time, so long as the registration statement of which the Additional Prospectus forms a part remains effective and the Additional Prospectus remains usable. Pursuant to lock-up agreements entered into with the Company, these Additional Sellers have agreed not to (a) transfer, assign or sell any Class A Ordinary Shares, (b) enter into any swap or other arrangement that transfers to another, in whole or in part, any of the economic consequences of ownership of any Class A Ordinary Shares, whether any such transaction is to be settled by delivery of such securities, in cash or otherwise, in each case until the earlier of (x) either one year or six months after the consummation of the Business Combination (depending on the applicable Additional Seller’s beneficial ownership of our Class A Ordinary Shares), (y) the first date on which the last sale price of our Class A Ordinary Shares equals or exceeds $12.00 per share (as adjusted for share subdivisions, share dividends, reorganizations, recapitalizations and the like) for any 20 trading days within any 30-day trading period commencing at least 150 days after the consummation of the Business Combination and (z) a liquidation, merger, share exchange or other similar transaction which results in all of our shareholders having the right to exchange their Class A Ordinary Shares for cash, securities or other property. We currently intend to ask certain of such shareholders to voluntarily extend their applicable lock-up period, but they are under no obligation to do so. Sales of a substantial number of our shares in the public market or the perception that these sales might occur, could depress the market price of our securities.

 

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Committed Equity Financing

On March 22, 2022, the Company, Legacy Swvl and the Selling Securityholder entered into an ordinary shares purchase agreement and a registration rights agreement in order to establish a committed equity financing facility for the Company following the consummation of the Business Combination, which subsequently occurred on March 31, 2022. Accordingly, as the intent of each of the parties to such agreements was to establish a source of potential equity financing solely for the post-Business Combination public company (“post-Business Combination Company”), and not for either the Company or Legacy Swvl in the event that the Business Combination was not consummated, and that the Selling Securityholder would commit to purchase, at our direction, only newly issued Class A Ordinary Shares of the post-Business Combination Company that had been approved for listing and were then publicly traded on Nasdaq, both the ordinary shares purchase agreement and the registration rights agreement expressly stated that the effectiveness of such agreements is delayed until (i) the consummation of the Business Combination shall have occurred and (ii) the “Closing” as defined in the ordinary shares purchase agreement occurs, subject to the satisfaction of each of the conditions to Closing set forth in the ordinary shares purchase agreement, provided that such Closing may not occur prior to 5:00 p.m., New York City time, on the second trading day immediately following the date on which the Business Combination is consummated. Both the ordinary shares purchase agreement and the registration rights agreement further expressly stated that prior to such Closing, the purchase agreement and the registration rights agreement have no force or effect.

The ordinary shares purchase agreement executed on March 22, 2022 further provided that the Selling Securityholder’s maximum aggregate purchase obligation thereunder, or its “Total Commitment” as defined therein, would be such number of Class A Ordinary Shares having an aggregate gross purchase price to the Selling Securityholder equal to $525,000,000, less the aggregate dollar amount of funds released to the Company on or after the date of consummation of the Business Combination (net of redemptions) from the SPAC’s trust account (“Trust Account”), and that such dollar amount of funds released to the Company from the Trust Account, as well as the resulting “Total Commitment” of the Selling Securityholder under the committed equity facility, each would be specified in an amendment to the ordinary shares purchase agreement and the registration rights agreement prior to the Closing (and prior to the Company’s initial filing of the registration statement that includes this prospectus with the SEC), so that the amount of the Selling Securityholder’s Total Commitment under the committed equity facility would be fixed at the time of the Closing and prior to the initial filing of the registration statement that includes this prospectus with the SEC. The Company determined $525,000,000 to be its desired upper limit to the facility after reviewing its business plan, including its related target capital raise upon consummation of the Business Combination and for the subsequent twenty-four months. More specifically, in addition to cash that had been made available to the Company through the issuance of Swvl Exchangeable Notes ($69,168,000 as of March 22, 2022) and cash that was expected to be funded by the PIPE Investors upon consummation of the Business Combination ($42,332,000 as of March 22, 2022), the Company targeted to raise $345,000,000 (representing the cash on hand in the Trust Account), plus $50,000,000 (representing the Company’s estimate of the Company’s and the SPAC’s cash transaction expenses as a result of the Business Combination), plus $130,000,000 (representing additional growth capital for strategic initiatives including potential future acquisitions). Following discussions between the Company and the Selling Securityholder, the Company and the Selling Securityholder agreed to the maximum aggregate purchase obligation described in this paragraph.

Prior to the consummation of the Business Combination on March 31, 2022, there were no redemptions of SPAC Class A Ordinary Shares and the cash on hand in the Trust Account was $345,000,000, an amount more than required by the Minimum Cash Condition (as defined herein) in the Business Combination Agreement. Upon the consummation of the Business Combination on March 31, 2022, after giving effect to redemptions of 29,175,999 SPAC Class A Ordinary Shares, amounting to $291,853,889.71, the cash on hand in the Trust Account was $53,257,144.90. As a result, B. Riley’s Total Commitment under the ordinary shares purchase

 

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agreement was reduced by the cash on hand in the Trust Account as of the effective time of the Business Combination and became fixed at $471,742,855.

Accordingly, as contemplated by the ordinary shares purchase agreement, on April 6, 2022, the Company, Legacy Swvl and the Selling Securityholder entered into Amendment No. 1 to the ordinary shares purchase agreement (“Amendment No. 1 to the Purchase Agreement”) and Amendment No. 1 to the registration rights agreement (“Amendment No. 1 to the Registration Rights Agreement”), among other things, to specify that the Selling Securityholder’s Total Commitment under the committed equity facility is $471,742,855 and to modify certain of the defined terms contained therein. Similar to the ordinary shares purchase agreement and the registration rights agreement dated March 22, 2022, each of Amendment No. 1 to the Purchase Agreement and Amendment No. 1 to the Registration Rights Agreement expressly stated that such amendments shall become effective concurrently with the effectiveness of the ordinary shares purchase agreement and the registration rights agreement at the Closing, subject to the satisfaction of each of the conditions to Closing set forth in the ordinary shares purchase agreement, and that such amendments shall have no force or effect prior to the effectiveness of the ordinary shares purchase agreement and the registration rights agreement dated March 22, 2022, concurrently with the effectiveness of such amendments, at the Closing. Thereafter, on April 6, 2022, the Closing under the ordinary shares purchase agreement occurred, at which time each of the ordinary shares purchase agreement, as amended by Amendment No. 1 to the Purchase Agreement, and the registration rights agreement, as amended by Amendment No. 1 to the Registration Rights Agreement, became effective.

Subsequently, on April 14, 2022, the Company, Legacy Swvl and the Selling Securityholder entered into Amendment No. 2 to the ordinary shares purchase agreement (“Amendment No. 2 to the Purchase Agreement”), primarily to effect certain changes to the pricing mechanics and certain of the procedures relating to the purchases pursuant to which the Company may elect to require the Selling Securityholder to purchase shares of Class A Ordinary Shares from the Company pursuant to the committed equity facility. The ordinary shares purchase agreement dated March 22, 2022, as amended by Amendment No. 1 to the Purchase Agreement on April 6, 2022 and Amendment No. 2 to the Purchase Agreement on April 14, 2022, is referred to in this prospectus as the “Purchase Agreement,” and the registration rights agreement dated March 22, 2022, as amended by Amendment No. 1 to the Registration Rights Agreement on April 6, 2022, is referred to in this prospectus as the “Registration Rights Agreement.”

As of the date of this prospectus, Swvl currently expects to utilize approximately $50,000,000 of the committed equity facility in the third calendar quarter of 2022, assuming that the requisite conditions to its use are satisfied during such period. Swvl’s actual use of the facility could be higher or lower depending on a number of factors, such as working capital needs, acquisitions, cost of capital and liquidity in Swvl’s common stock.

Below is a summary of the terms of the Purchase Agreement and the Registration Rights Agreement, each as so amended prior to the date the registration statement of which this prospectus is a part was initially filed by the Company with the SEC on April 21, 2022.

Upon the terms and subject to the satisfaction of the conditions set forth in the Purchase Agreement, the Company will have the right, in our sole discretion, to sell to the Selling Securityholder up to $471,742,855 (the “Total Commitment”) of our newly issued Class A Ordinary Shares (subject to limitations set forth in the Purchase Agreement), from time to time from and after the Commencement Date (as defined below) and during the term of the Purchase Agreement. Sales of Class A Ordinary Shares to the Selling Securityholder under the Purchase Agreement, and the timing of any such sales, are solely at our option, and we are under no obligation to sell any securities to the Selling Securityholder under the Purchase Agreement. In accordance with our obligations under the Registration Rights Agreement, we have filed the registration statement of which this prospectus forms a part with the SEC to register under the Securities Act the resale by the Selling Securityholder of up to 102,939,766 Class A Ordinary Shares, consisting of (i) 386,971 Class A Ordinary Shares (the “Commitment Shares”) that we issued to the Selling Securityholder as consideration for its commitment to

 

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purchase Class A Ordinary Shares at our direction under the terms and subject to the conditions set forth in the Purchase Agreement and (ii) up to 102,552,795 Class A Ordinary that we may elect, in our sole discretion, to issue and sell to the Selling Securityholder, from time to time from and after the Commencement Date under the Purchase Agreement.

Upon the initial satisfaction of the conditions to the Selling Securityholder’s purchase obligations set forth in the Purchase Agreement (the “Commencement”), including that the registration statement of which this prospectus forms a part be declared effective by the SEC, we will have the right, but not the obligation, from time to time at our sole discretion over the 24-month period after the date on which the Commencement occurs (the “Commencement Date”), to direct the Selling Securityholder to purchase a specified amount of Class A Ordinary Shares (each, a “Purchase”), not to exceed the lesser of (i) 50.0% of the Purchase Volume Reference Amount (as defined below) applicable to such Purchase and (ii) 30.0% of the total aggregate number (or “volume”) of our Class A Ordinary Shares traded on Nasdaq during the applicable Purchase Valuation Period (as defined below) (such lesser amount of shares, the “Maximum Purchase Amount”) (and subject to certain additional limitations set forth in the Purchase Agreement) (the number of shares to be purchased giving effect to the Maximum Purchase Amount and all such additional limitations, the “Purchase Share Amount”), by timely delivering written notice to the Selling Securityholder (each, a “Purchase Notice”) prior to 9:00 a.m., Eastern time, on any trading day (each, a “Purchase Date”), so long as (i) the closing sale price of our Class A Ordinary Shares on the trading day immediately prior to such Purchase Date is not less than $1.00 (subject to adjustment as set forth in the Purchase Agreement) (the “Threshold Price”) and (ii) all Class A Ordinary Shares subject to all prior Purchases and all prior Intraday Purchases (as defined below) effected by us under the Purchase Agreement have been received by the Selling Securityholder prior to the time we deliver such Purchase Notice to the Selling Securityholder.

The per share purchase price that the Selling Securityholder will be required to pay for the Class A Ordinary Shares in a Purchase effected by us pursuant to the Purchase Agreement, if any, will be determined by reference to the volume weighted average price of our Class A Ordinary Shares (the “VWAP”) for the applicable “Purchase Valuation Period” on the Purchase Date, which is defined in the Purchase Agreement as the period beginning at the official open (or “commencement”) of the regular trading session on Nasdaq on such Purchase Date, and ending at the earliest to occur of: (i) the official close of the regular trading session on Nasdaq on such Purchase date, (ii) such time that the total aggregate number (or “volume) of our Class A Ordinary Shares traded on Nasdaq reaches a threshold amount equal to the quotient obtained by dividing (x) Purchase Share Amount for such Purchase, by (y) 0.30 (calculated in accordance with the Purchase Agreement) (the “Purchase Volume Maximum”), and (iii) such time that the trading price of our Class A Ordinary Shares on Nasdaq falls below the applicable minimum price threshold specified by us in the Purchase Notice for such Purchase (or a price equal to 75.0% of the closing sale price of our Class A Ordinary Shares on the trading day immediately prior to the applicable Purchase Date for such Purchase if we do not specify a different minimum price threshold) (the “Minimum Price Threshold”), less a fixed 3.0% discount to the VWAP for such Purchase Valuation Period.

The “Purchase Volume Reference Amount” is defined in the Purchase Agreement as the number of shares of Class A Ordinary Shares equal to the average daily trading volume of our Class A Ordinary Shares on Nasdaq for the 10 consecutive trading day period ending on (and including) the trading day immediately preceding the Purchase Date for such Purchase.

In addition to the regular Purchases described above, after the Commencement, we will also have the right, but not the obligation, subject to the continued satisfaction of conditions set forth in the Purchase Agreement, to direct the Selling Securityholder to purchase, on any trading day, including the same Purchase Date on which a regular Purchase is effected (if any), a specified amount of Class A Ordinary Shares (each, an “Intraday Purchase”), not to exceed the applicable Intraday Purchase Maximum Amount

 

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(as described below) for such Intraday Purchase (and subject to certain additional limitations set forth in the Purchase Agreement), by the delivery to the Selling Securityholder of an irrevocable written purchase notice, after 10:00 a.m., Eastern time (and after the Purchase Valuation Period for any earlier regular Purchase effected on the same Purchase Date as such Intraday Purchase (if any) and the Intraday Purchase Valuation Period (as defined below) for the most recent prior Intraday Purchase effected on the same Purchase Date (if any) have ended), and prior to 1:30 p.m., Eastern time, on such Purchase Date (each, an “Intraday Purchase Notice”), so long as, (i) the closing sale price of our Class A Ordinary Shares on the trading day immediately prior to such Purchase Date is not less than the Threshold Price and (ii) all Class A Ordinary Shares subject to all prior Purchases and all prior Intraday Purchases effected by us under the Purchase Agreement have been received by the Selling Securityholder prior to the time we deliver such Intraday Purchase Notice to the Selling Securityholder.

The per share purchase price that the Selling Securityholder will be required to pay for the Class A Ordinary Shares in an Intraday Purchase effected by us pursuant to the Purchase Agreement, if any, will be calculated in the same manner as in the case of a regular Purchase (including the same fixed percentage discounts to the applicable VWAP as in the case of a regular Purchase, as described above), except that the VWAP for each Intraday Purchase effected on a Purchase Date will be calculated over different periods during the regular trading session on Nasdaq on such Purchase Date, each of which will commence and end at different times on such Purchase Date.

There is no upper limit on the price per share that the Selling Securityholder could be obligated to pay for the Class A Ordinary Shares that we may elect to sell to it in any Purchase or any Intraday Purchase under the Purchase Agreement. In the case of Purchases and Intraday Purchases effected by us under the Purchase Agreement, if any, all share and dollar amounts used in determining the purchase price per share of Class A Ordinary Shares to be purchased by the Selling Securityholder in a Purchase or an Intraday Purchase (as applicable), or in determining the applicable maximum purchase share amounts or applicable volume or price threshold amounts in connection with any such Purchase or Intraday Purchase (as applicable), in each case, will be equitably adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during any period used to calculate such per share purchase price, maximum purchase share amounts or applicable volume or price threshold amounts.

From and after the date on which the Commencement occurs, subject to the continued satisfaction of conditions set forth in the Purchase Agreement, we will control the timing and amount of any sales of Class A Ordinary Shares to the Selling Securityholder. Actual sales of shares of our Class A Ordinary Shares to the Selling Securityholder under the Purchase Agreement will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of our Class A Ordinary Shares and determinations by us as to the appropriate sources of funding for our business and its operations.

Pursuant to the Purchase Agreement, we have agreed not to issue or sell, and the Selling Securityholder has agreed not to purchase or acquire, any Class A Ordinary Shares which, when aggregated with all other Class A Ordinary Shares then beneficially owned by the Selling Securityholder and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by the Selling Securityholder of more than 4.99% of the outstanding Class A Ordinary Shares (the “Beneficial Ownership Limitation”). Notwithstanding the Beneficial Ownership Limitation, the Selling Securityholder may sell our Class A Ordinary Shares in the public market at any time, so long as the registration statement of which this prospectus forms a part remains effective and this prospectus remains usable and the related purchase agreement with B. Riley has not been terminated. In addition to the Selling Securityholder, certain Additional Sellers beneficially owning approximately 47% of our outstanding Class A Ordinary Shares may, subject to any contractual lock-ups, sell all of their shares at the same time as the Selling Securityholder.

 

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Sales of a substantial number of our shares in the public market, including the number of Resale Securities being offered pursuant to this prospectus (which equals approximately 87% of the total outstanding shares of our Class A Ordinary Shares as of the date of this prospectus, calculated as 102,939,766 Class A Ordinary Shares potentially issuable to the Selling Stockholder, divided by 118,883,073 currently outstanding Class A Ordinary Shares), or the perception that these sales might occur, could depress the market price of our securities. The frequency of such sales could cause the market price of our securities to decline or increase the volatility in the market price of our securities.

The net proceeds under the Purchase Agreement to the Company will depend on the frequency and prices at which the Company sells its Class A Ordinary Shares to the Selling Securityholder. The Company currently expects that any proceeds received by it from such sales to the Selling Securityholder will be used for working capital and general corporate purposes, including to fund acquisitions.

There are no restrictions on future financings, rights of first refusal, participation rights, penalties or liquidated damages in the Purchase Agreement or Registration Rights Agreement, except we are prohibited (with certain specified exceptions) from effecting or entering into an agreement to effect certain “Variable Rate Transactions” (as defined in the Purchase Agreement), including an “equity line of credit” or any similar continuous offering of our equity securities with any third party. The Selling Securityholder has agreed that none of the Selling Securityholder, its sole member, any of their respective officers, or any entity managed or controlled by the Selling Securityholder or its sole member will engage in or effect, directly or indirectly, for its own account or for the account of any other of such persons or entities, any short sales of our Class A Ordinary Shares or hedging transaction that establishes a net short position in our Class A Ordinary Shares during the term of the Purchase Agreement.

The Purchase Agreement will automatically terminate on the earliest to occur of (i) the first day of the month next following the 24-month anniversary of the Commencement Date, (ii) the date on which the Selling Securityholder shall have purchased from us under the Purchase Agreement shares of Class A Ordinary Shares for an aggregate gross purchase price of $471,742,855, (iii) the date on which the Class A Ordinary Shares shall have failed to be listed or quoted on Nasdaq or another U.S. national securities exchange identified as an “eligible market” in the Purchase Agreement, (iv) the 30th trading day after the date on which a voluntary or involuntary bankruptcy proceeding involving us has been commenced that is not discharged or dismissed prior to such trading day, and (v) the date on which a bankruptcy custodian is appointed for all or substantially all of our property or we make a general assignment for the benefit of creditors. We have the right to terminate the Purchase Agreement at any time after Commencement, at no cost or penalty, upon five trading days’ prior written notice to the Selling Securityholder. The Selling Securityholder has the right to terminate the Purchase Agreement upon five trading days’ prior written notice to us upon the occurrence of certain events set forth in the Purchase Agreement. We and the Selling Securityholder may also agree to terminate the Purchase Agreement by mutual written consent. In any case, no termination of the Purchase Agreement will be effective during the pendency of any Purchase that has not then fully settled in accordance with the Purchase Agreement. Neither we nor the Selling Securityholder may assign or transfer our respective rights and obligations under the Purchase Agreement or the Registration Rights Agreement.

As consideration for the Selling Securityholder’s commitment to purchase Class A Ordinary Shares at the Company’s direction upon the terms and subject to the conditions set forth in the Purchase Agreement, on April 6, 2022, the Company issued 386,971 Class A Ordinary Shares to the Selling Securityholder as Commitment Shares.

The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, conditions and indemnification obligations of the parties. Copies of the agreements have been filed as exhibits to the registration statement, of which this prospectus forms a part, and are available electronically on the website of the SEC at www.sec.gov.

 

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We do not know what the purchase price for our Class A Ordinary Shares will be and therefore cannot be certain as to the number of Class A Ordinary Shares we might issue to the Selling Securityholder under the Purchase Agreement after the Commencement Date. As of June 21, 2022, there were 118,883,073 shares of our Class A Ordinary Shares outstanding, of which 62,429,076 shares were held by non-affiliates of the Company. Although the Purchase Agreement provides that we may sell to the Selling Securityholder up to such number of Class A Ordinary Shares having an aggregate gross purchase price to the Selling Securityholder equal to $471,742,855, only 102,939,766 shares of our Class A Ordinary Shares are being registered under the Securities Act for resale by the Selling Securityholder under this prospectus, which represents (i) the 386,971 Commitment Shares that we issued to the Selling Securityholder on April 6, 2022 under the Purchase Agreement and (ii) up to 102,552,795 shares of Class A Ordinary Shares that we may elect to issue and sell to the Selling Securityholder from and after the Commencement Date, if and when we elect to sell Class A Ordinary Shares to the Selling Securityholder under the Purchase Agreement. Depending on the market prices of our Class A Ordinary Shares at the time we elect to issue and sell Class A Ordinary Shares to the Selling Securityholder under the Purchase Agreement, we may need to register under the Securities Act additional Class A Ordinary Shares for resale by the Selling Securityholder in order to receive aggregate gross proceeds equal to the $471,742,855 Total Commitment available to us under the Purchase Agreement. If all of the 102,939,766 Class A Ordinary Shares offered for resale by the Selling Securityholder under this prospectus were issued and outstanding as of the date hereof, such shares would represent approximately 46% of the total number of outstanding Class A Ordinary Shares and approximately 62% of the total number of outstanding Class A Ordinary Shares held by non-affiliates of the Company, in each case as of June 21, 2022. If we elect to issue and sell to the Selling Securityholder pursuant to the Purchase Agreement more than the 102,939,766 shares being offered for resale by the Selling Securityholder under this prospectus, which we have the right, but not the obligation, to do, we must first register under the Securities Act such additional Class A Ordinary Shares for resale by the Selling Securityholder, which could cause additional substantial dilution to our shareholders.

The number of Class A Ordinary Shares ultimately offered for resale by the Selling Securityholder through this prospectus is dependent upon the number of Class A Ordinary Shares, if any, we elect to sell to the Selling Securityholder under the Purchase Agreement from and after the Commencement Date. The issuance and sale of Class A Ordinary Shares by the Company to the Selling Securityholder pursuant to the Purchase Agreement will not affect the rights or privileges of our existing shareholders, except that the economic and voting interests of each of our existing shareholders will be diluted. Although the number of Class A Ordinary Shares that our existing shareholders own will not decrease, the Class A Ordinary Shares owned by our existing shareholders will represent a smaller percentage of our total outstanding Class A Ordinary Shares after any such issuance and sale of Class A Ordinary Shares by the Company to the Selling Securityholder pursuant to the Purchase Agreement.

Emerging Growth Company

We are an “emerging growth company” as defined in Section 2(a) of the Securities Act, as modified by the Jumpstart Our Business Startups Act of 2012, and have elected to take advantage of the benefits of the extended transition period for new or revised financial accounting standards. We expect to remain an emerging growth company at least through the end of the 2022 fiscal year and expect to continue to take advantage of the benefits of the extended transition period, although we may decide to early adopt such new or revised accounting standards to the extent permitted by such standards. This may make it difficult or impossible to compare our financial results with the financial results of another public company that is either not an emerging growth company or is an emerging growth company that has chosen not to take advantage of the extended transition period exemptions because of the potential differences in accounting standards used.

 

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Foreign Private Issuer

We are a “foreign private issuer” under SEC rules. Consequently, we are subject to the reporting requirements under the Exchange Act applicable to foreign private issuers.

Based on our foreign private issuer status, we are not required to file periodic reports and financial statements with the SEC as frequently or as promptly as a U.S. company whose securities are registered under the Exchange Act and we also are exempt from the rules and regulations under the Exchange Act related to the furnishing and content of proxy statements. We are also not required to comply with Regulation FD, which addresses certain restrictions on the selective disclosure of material information. In addition, among other matters, our officers, directors and principal shareholders are exempt from the reporting and “short-swing” profit recovery provisions of Section 16 of the Exchange Act and the rules under the Exchange Act with respect to their purchases and sales of Class A Ordinary Shares. Additionally, Nasdaq rules allow foreign private issuers to follow home country practices in lieu of certain of Nasdaq’s corporate governance rules and we have elected to do so in certain regards. As a result, our shareholders may not have the same protections afforded to shareholders of companies that are subject to all Nasdaq corporate governance requirements.

Risk Factors

An investment in our securities involves substantial risks and uncertainties that may adversely affect our business, financial condition and results of operations and cash flows. Some of the more significant challenges and risks relating to an investment in our company include, among other things, the following:

 

   

Several countries in which Swvl operates and plans to operate in the future have been subject to political and economic instability.

 

   

Swvl’s limited operating history and rapidly evolving business make it particularly difficult to evaluate Swvl’s prospects and the risks and challenges Swvl may encounter.

 

   

The mass transit ridesharing market is still in relatively early stages of growth and if the market does not continue to grow, grows more slowly than Swvl expects or fails to grow as large as Swvl expects, Swvl’s business, financial condition and operating results could be adversely affected.

 

   

If Swvl fails to cost-effectively attract and retain qualified drivers to use its platform, or to increase utilization of Swvl’s platform by Swvl’s currently contracted drivers, Swvl’s business, financial condition and operating results could be harmed.

 

   

If Swvl fails to cost-effectively attract and retain new riders or to increase utilization of its platform by existing riders, Swvl’s business, financial condition and operating results could be harmed.

 

   

Swvl depends on its key personnel and other highly skilled personnel, and if Swvl fails to attract, retain, motivate or integrate its personnel, Swvl’s business, financial condition and operating results could be adversely affected.

 

   

Swvl’s reputation, brand and the network effects among the drivers and riders using Swvl’s platform are important to its success, and if Swvl is not able to maintain and continue developing its reputation, brand and network effects, its business, financial condition and operating results could be adversely affected.

 

   

Swvl’s growth strategy will subject it to additional costs, compliance requirements and risks, and Swvl’s expansion plans may not be successful.

 

   

Swvl has not historically maintained insurance coverage for its operations. Swvl may not be able to mitigate the risks facing its business and could incur significant uninsured losses, which could adversely affect its business, financial condition and operating results.

 

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Any actual or perceived security or privacy breach could interrupt Swvl’s operations and adversely affect its reputation, brand, business, financial condition and operating results. Swvl has previously experienced a data breach that resulted in the exposure of its customers’ personal information.

 

   

If Swvl fails to effectively predict rider demand, to set pricing and routing accordingly or to run routes that are consistent with the availability of drivers using its platform, Swvl’s business, financial condition and operating results could be adversely affected.

 

   

If Swvl is not able to successfully develop new offerings on its platform and enhance its existing offerings, Swvl’s business, financial condition and operating results could be adversely affected.

 

   

Swvl’s metrics and estimates, including the key metrics included in this prospectus, are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may harm Swvl’s reputation and negatively affect Swvl’s business, financial condition and operating results.

 

   

Any failure to offer high-quality user support may harm Swvl’s relationships with users and could adversely affect Swvl’s reputation, brand, business, financial condition, and operating results.

 

   

Systems failures and resulting interruptions in the availability of Swvl’s website, applications, platform, or offerings could adversely affect Swvl’s business, financial condition, and operating results.

 

   

If Swvl is unable to make acquisitions and investments or successfully integrate them into its business, or if Swvl enters into strategic transactions that do not achieve its objectives, Swvl’s business, financial condition and operating results could be adversely affected.

 

   

Swvl has identified material weaknesses in its internal control over financial reporting. If for any reason Swvl is unable to remediate these material weaknesses and otherwise to maintain proper and effective internal controls over financial reporting in the future, Swvl’s ability to produce accurate and timely consolidated financial statements may be impaired, which may harm Swvl’s operating results, Swvl’s ability to operate its business or investors’ views of Swvl.

 

   

The securities being offered in this prospectus represent a substantial percentage of our outstanding Class A Ordinary Shares, and the sales of such securities, or the perception that these sales could occur, could cause the market price of our Class A Ordinary Shares to decline significantly.

Our Corporate Information

See “Prospectus Summary—Recent Developments—Business Combination” in this prospectus for additional information regarding the Business Combination. The Company is a business company limited by shares incorporated under the laws of the British Virgin Islands. The Company was incorporated under the laws of the British Virgin Islands on July 23, 2021 under the name Pivotal Holdings Corp. Upon consummation of the Business Combination, the Company changed its name to Swvl Holdings Corp. The mailing address of the Company’s registered office is Kingston Chambers, PO Box 173, Road Town, Tortola, British Virgin Islands. The Company’s principal executive office is The Offices 4, One Central, Dubai World Trade Centre, Dubai, United Arab Emirates. The telephone number of the Company’s principal executive office is +971 42241293.

The SEC maintains an Internet site that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. The SEC’s website is http://www.sec.gov. The Company’s principal website address is https://www.swvl.com. We do not incorporate the information contained on, or accessible through, the Company’s websites into this prospectus, and you should not consider it a part of this prospectus.

 

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THE OFFERING

The summary below describes the principal terms of the offering. The “Description of Securities” section of this prospectus contains a more detailed description of the Company’s Class A Ordinary Shares.

 

Securities being registered for resale by the Selling Securityholder:

102,939,766 Class A Ordinary Shares, consisting of:

 

   

386,971 Commitment Shares that we issued to the Selling Securityholder pursuant to the Purchase Agreement in consideration of its commitment to purchase shares of Class A Ordinary Shares at our election under the Purchase Agreement; and

 

   

Up to 102,552,795 shares (the “Purchase Shares”) we may elect, in our sole discretion to issue and sell to the Selling Securityholder under the Purchase Agreement from time to time after the Commencement Date.

 

Offering prices for resales:

The Selling Securityholder may resell or otherwise dispose of all, some or none of the Class A Ordinary Shares included in this prospectus, at any time or from time to time in a number of different ways in its discretion and at varying prices. See the section titled “Plan of Distribution” for more information about how the Selling Securityholder may sell or otherwise dispose of the Class A Ordinary Shares being offered in this prospectus.

 

Ordinary shares issued and outstanding prior to any exercise of Warrants as of June 21, 2022:

118,883,073 Class A Ordinary Shares.

 

Use of Proceeds:

This prospectus relates to the offer and resale from time to time by the Selling Securityholder of up to 102,939,766 Class A Ordinary Shares that we have issued or that we may, in our discretion, elect to issue and sell to the Selling Securityholder, from time to time after the Commencement Date, pursuant to the Purchase Agreement. We are not selling any securities under this prospectus and we will not receive any proceeds from the resale of Class A Ordinary Shares by the Selling Securityholder under this prospectus. However, we may receive up to $471,742,855 in aggregate gross proceeds under the Purchase Agreement from sales of Class A Ordinary Shares that we may elect to make to the Selling Securityholder pursuant to the Purchase Agreement, if any, from time to time in our sole discretion, from and after the Commencement Date.

 

  We expect to use the net proceeds that we receive from sales of our Class A Ordinary Shares to the Selling Securityholder, if any, under the Purchase Agreement for working capital and general corporate purposes, including to fund acquisitions. See the section titled “Use of Proceeds.”

 

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Dividend Policy:

We have never declared or paid any cash dividend on our Class A Ordinary Shares. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Any further determination to pay dividends on our Class A Ordinary Shares would be at the discretion of our board of directors, subject to applicable laws, and would depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our board of directors may deem relevant.

 

Market for our Class A Ordinary Shares:

Our Class A Ordinary Shares are listed on Nasdaq under the trading symbol “SWVL”.

 

Risk Factors:

You should carefully consider the information set forth herein under “Risk Factors”.

 

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RISK FACTORS

Risks Related to Operational Factors Affecting Swvl

Swvl’s limited operating history and evolving business make it particularly difficult to evaluate Swvl’s prospects and the risks and challenges Swvl may encounter.

While Swvl has primarily focused on mass transit ridesharing services since Swvl launched in 2017, Swvl’s business continues to evolve. Beginning in 2020, Swvl reevaluated and adjusted its pricing methodologies and expanded its business offerings to include TaaS and (in the future) SaaS. While it is difficult to evaluate the prospects and risks of any business, Swvl’s relatively new and evolving business makes it particularly difficult to assess Swvl’s prospects and the risks and challenges it may encounter. Risks and challenges Swvl has faced or expects to face include its ability to:

 

   

forecast its revenue and budget for and manage expenses;

 

   

attract new qualified drivers and new riders to use its platform and have existing qualified drivers and riders continue to use its platform in a cost-effective manner;

 

   

comply with existing or developing and new or modified laws and regulations applicable to Swvl’s business and the data it processes, including in jurisdictions where such regulations may still be developing or changing rapidly;

 

   

manage its platform and business assets and expenses in light of the COVID-19 pandemic and related public health measures issued by various jurisdictions, including travel bans, travel restrictions, and shelter-in-place orders, as well as maintain demand for and confidence in the safety of Swvl’s platform during and following the COVID-19 pandemic;

 

   

plan for and manage expenditures for Swvl’s current and future offerings, including expenses relating to Swvl’s growth strategy;

 

   

deploy and ensure utilization of the vehicles operating on Swvl’s platform;

 

   

anticipate and respond to macroeconomic changes and changes in the markets in which Swvl operates;

 

   

maintain and enhance the value of Swvl’s reputation and brand;

 

   

effectively manage Swvl’s growth and business operations, including the impacts of the COVID-19 pandemic on Swvl’s business;

 

   

successfully expand Swvl’s geographic reach;

 

   

successfully expand Swvl’s TaaS business and launch Swvl’s SaaS business;

 

   

hire, integrate and retain talented personnel; and

 

   

successfully develop new platform features and offerings to enhance the experience of riders, drivers and corporate customers (as well as schools and municipalities).

If Swvl fails to address the risks and difficulties that it faces, including those associated with the challenges listed above as well as those described elsewhere in this “Risk Factors” section, Swvl’s business, financial condition and operating results could be adversely affected. Further, because Swvl has limited historical financial data, operates in a rapidly evolving market and its growth strategy is premised on rapid international expansion, any predictions about Swvl’s future revenue and expenses may not be as accurate as they would be if Swvl had a longer operating history or operated in a more predictable market. If Swvl’s assumptions regarding these risks and uncertainties, which Swvl uses to plan and operate its business, are incorrect or change, or if it does not address these risks successfully, Swvl’s operating results could differ materially from its expectations and Swvl’s business, financial condition and operating results could be adversely affected.

 

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The COVID-19 pandemic and related responsive measures have disrupted and negatively impacted, and may in the future disrupt and negatively impact, Swvl’s business, financial condition, and operating results. Swvl cannot predict the extent to which the pandemic and related effects may in the future adversely impact its business, financial condition and operating results, and the execution of Swvl’s strategic objectives.

The ongoing COVID-19 pandemic and related responsive measures (e.g., travel bans, travel restrictions and shelter-in-place orders) have negatively impacted Swvl’s business, financial condition, and operating results. The pandemic and these related responses continue to evolve and have caused, and may in the future cause, decreased demand for Swvl’s platform relative to pre-COVID-19 levels and significant volatility and disruption of financial markets.

The COVID-19 pandemic has subjected Swvl’s business, financial condition, and operating results to several risks, including, but not limited to the following:

 

   

Declines in mobility due to COVID-19, including commuting, local travel, and business travel, have resulted in decreased demand for Swvl’s platform. Changes in travel trends and behavior arising from COVID-19, including the impact of new variants, may develop or persist over time, which may further contribute to this adverse effect in the future.

 

   

The measures Swvl previously took in response to the COVID-19 pandemic adversely affected Swvl’s business and operating results. For example, in the first quarter of 2020, Swvl temporarily suspended its usual services, other than to certain key business customers, and operated reduced-service for essential workers at no charge. Although regular service has largely resumed, in the future there may be repeated disruption arising from the COVID-19 pandemic and related responsive measures that may require Swvl to suspend or limit its services again, which would adversely affect Swvl’s business, financial condition and operating results.

 

   

Changes in driver behavior during the COVID-19 pandemic led to reduced levels of driver availability on Swvl’s platform, beginning in the first quarter of 2020. As a result, at the time Swvl was required to offer additional incentives to drivers to continue operating on Swvl’s platform. Any future reduction in driver availability due to the COVID-19 pandemic may require Swvl to increase prices or provide additional incentives to attract and retain drivers and riders, which may adversely affect its business, financial condition and operating results.

 

   

Responsive measures to the COVID-19 pandemic caused Swvl to modify its business practices by having corporate employees in nearly all office locations work remotely, limiting employee travel and canceling or postponing events and meetings, or holding them virtually. Swvl may be required to or choose voluntarily to take additional actions for the health and safety of its workforce and users of its platform, including after the pandemic subsides, whether in response to government orders or based on Swvl’s determinations. If these measures result in decreased productivity, harm Swvl’s company culture, adversely affect Swvl’s ability to timely and accurately report its financial statements or maintain internal controls, or otherwise negatively affect Swvl’s business, Swvl’s financial condition, and operating results could be adversely affected.

As the severity, magnitude, and duration of the COVID-19 pandemic, the resulting public health responses and its economic consequences remain uncertain and difficult to predict, the pandemic’s impact on Swvl’s business, financial condition and operating results, as well as its impact on Swvl’s ability to successfully execute its business strategies and initiatives, also remains uncertain and difficult to predict. As the countries in which Swvl operates have reopened, the recovery of the economy and Swvl’s business have fluctuated and varied by geography. Further, the ultimate impact of the COVID-19 pandemic on the riders, drivers and other users of Swvl’s platform, as well as its employees, business, financial condition and operating results depends on many factors that are not within Swvl’s control, including, but not limited, to: governmental, business and individuals’ actions that have been and continue to be taken in response to the pandemic (including restrictions on travel and transport and modified workplace activities); the impact of the pandemic and actions taken in response thereto on

 

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local or regional economies, travel and economic activity; the speed and efficacy of vaccine distribution; the availability of government funding programs; evolving laws and regulations regarding COVID-19, including those related to disclosure and notification; general economic uncertainty in key markets and financial market volatility; volatility in global economic conditions and levels of economic growth; the duration of the pandemic; the extent of any virus mutations or new variants of COVID-19; and the pace of recovery when the COVID-19 pandemic subsides.

Several countries in which Swvl operates and plans to operate in the future have been subject to political and economic instability.

Swvl has historically conducted most of its business operations in Egypt, Pakistan and Kenya, and its growth strategy is premised on the rapid introduction of its platform into both emerging and developed markets. Several of the countries in which Swvl operates or plans to operate its business have previously, and in the future may be, subject to instances of political instability, civil unrest, hostilities, terrorist activities and economic volatility. Any such events may lead to, among other things, declines in rider and driver demand for Swvl’s platform, whether arising from safety concerns, a drop in consumer confidence or otherwise, a general deterioration of economic conditions, currency volatility or adverse changes to the political and regulatory environment. Any such developments and any other forms of political or economic instability in Swvl’s markets may harm Swvl’s business, financial condition and operating results.

Swvl faces competition and could lose market share to competitors, which could adversely affect Swvl’s business, financial condition and operating results.

Swvl believes that its principal competition for ridership is public transportation services. Swvl’s business model is premised in part on promoting the safety, efficiency and convenience of its offerings to convert public transportation users into riders on Swvl’s platform. While Swvl has previously been successful in attracting and retaining new riders, public transportation is often available at a lower price and with a greater variety of routes than the rides Swvl offers. In addition, public transportation operators in Swvl’s markets may in the future make improvements or implement measures to enhance the safety, efficiency and convenience of their networks. If current and potential riders do not view the advantages of Swvl’s platform as outweighing the difference in price, or if the successful introduction of such improvements or measures weakens the competitive advantages of Swvl’s offerings, Swvl may be unable to retain existing riders or attract new riders and its business, financial condition and operating results may be adversely affected.

Swvl also faces competition from other ridesharing companies and car hire and taxi companies. The ridesharing market in particular is intensely competitive and is characterized by rapid changes in technology, shifting rider needs and preferences and frequent introductions of new services and offerings. Swvl expects competition to increase, both from existing competitors and new entrants in the markets in which Swvl operates or plans to operate, and such competitors may be well-established and enjoy greater resources or other strategic advantages. If Swvl is unable to anticipate or successfully react to these competitive challenges in a timely manner, Swvl’s competitive position could weaken, or fail to improve, and Swvl could experience a decline in revenue or growth stagnation that could adversely affect Swvl’s business, financial condition and operating results.

Certain of Swvl’s current and potential competitors have greater financial, technical, marketing, research and development and other resources, greater name recognition, longer operating histories or a larger global user base than Swvl does. Such competitors may be able to devote greater resources to the development, promotion and sale of offerings and offer lower prices in certain markets than Swvl does, which could adversely affect Swvl’s business, financial condition and operating results. These and other factors may allow Swvl’s competitors to derive greater revenue and profits from their existing user bases, attract and retain qualified drivers and riders at lower costs or respond more quickly to new and emerging technologies and trends. Current and potential competitors may also establish cooperative or strategic relationships, or consolidate, amongst themselves or with third parties that may further enhance their resources and offerings.

 

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Swvl believes that its ability to compete effectively depends upon many factors both within and beyond Swvl’s control, including:

 

   

the popularity, utility, ease of use, performance and reliability of Swvl’s offerings;

 

   

Swvl’s reputation, including the perceived safety of Swvl’s platform, and brand strength;

 

   

Swvl’s pricing models and the prices of its offerings;

 

   

Swvl’s ability to manage its business and operations during the ongoing COVID-19 pandemic and recovery as well as in response to related governmental, business and individuals’ actions that continue to evolve (including restrictions on travel and transport and modified workplace activities);

 

   

Swvl’s ability to attract and retain qualified drivers and riders to use its platform;

 

   

Swvl’s ability to develop new offerings, including the expansion of its TaaS business and launch of its SaaS business;

 

   

Swvl’s ability to continue leveraging and enhancing its data analytics capabilities;

 

   

Swvl’s ability to establish and maintain relationships with strategic partners and third-party service providers;

 

   

Swvl’s ability to deploy and ensure utilization of the vehicles operating on its platform;

 

   

changes mandated by, or that Swvl elects to make to address, legislation, regulatory authorities or litigation, including settlements, judgments, injunctions and consent decrees;

 

   

Swvl’s ability to attract, retain and motivate talented employees;

 

   

Swvl’s ability to raise additional capital as needed; and

 

   

acquisitions or consolidation within Swvl’s industry.

If Swvl is unable to compete successfully, Swvl’s business, financial condition and operating results could be adversely affected.

The mass transit ridesharing market is still in relatively early stages of growth and if the market does not continue to grow, grows more slowly than Swvl expects or fails to grow as large as Swvl expects, Swvl’s business, financial condition and operating results could be adversely affected.

Prior to COVID-19, the mass transit ridesharing market was growing rapidly, but it is still relatively new, and it is uncertain to what extent market acceptance will continue to grow, if at all, particularly after the COVID-19 pandemic. Swvl’s success depends to a substantial extent on the willingness of people to widely adopt mass transit ridesharing. If the public does not perceive Swvl’s offerings as beneficial, or chooses not to adopt them as a result of concerns regarding public health or safety, affordability or for other reasons, then the market for Swvl’s offerings may not further develop, may develop more slowly than Swvl expects or may not achieve the growth potential Swvl expects. Any of the foregoing risks and challenges could adversely affect Swvl’s business, financial condition and operating results.

If Swvl fails to cost-effectively attract and retain qualified drivers to use its platform, or to increase utilization of Swvl’s platform by existing drivers using its platform, Swvl’s business, financial condition and operating results could be harmed.

Swvl’s continued growth depends in part on its ability to cost-effectively attract and retain qualified drivers who satisfy Swvl’s screening criteria and procedures to use its platform and to increase utilization of Swvl’s platform by existing drivers.

To attract and retain qualified drivers to use its platform, Swvl has, among other things, offered bonus payments and other incentives to high-performing drivers, and temporarily provided financial assistance to

 

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support drivers during the COVID-19 pandemic. Government and private business actions in response to the COVID-19 pandemic, such as travel bans, travel restrictions, shelter-in-place orders, increased reliance on work-from-home rather than working in offices, and people and businesses electing to move away from more densely populated cities, have decreased and may in the future decrease utilization of Swvl’s platform by riders. If Swvl does not continue to provide drivers with compelling opportunities to earn income and other incentive programs for using its platform, or if drivers become dissatisfied with Swvl’s requirements for drivers to use its platform, Swvl may fail to attract new drivers to use its platform, retain current drivers to use its platform or increase their utilization of its platform, or Swvl may experience complaints, negative publicity, or services disruptions that could adversely affect its users and its business.

The incentives Swvl provides to attract drivers could fail to attract and retain qualified drivers to use its platform or fail to increase utilization of its platform by existing drivers, or could have other unintended adverse consequences. In addition, changes in certain laws and regulations, labor and employment laws, licensing requirements or background check requirements, may result in a shift or decrease in the pool of qualified drivers, which may result in increased competition for the services of qualified drivers or higher costs of recruitment, operation and retention with respect to drivers providing services through the Swvl platform. Other factors outside of Swvl’s control, such as the COVID-19 pandemic or other concerns about personal health and safety, or concerns about the availability of government or other assistance programs if drivers continue to drive using Swvl’s platform, may also reduce the number of drivers available through Swvl’s platform or utilization of Swvl’s platform by drivers, or impact Swvl’s ability to attract new drivers to use its platform. If Swvl fails to attract qualified drivers to use its platform on favorable terms, fails to increase utilization of its platform by existing drivers or loses qualified drivers using its platform to competitors, Swvl may not be able to meet the demand of riders, including maintaining competitive prices for riders, and Swvl’s business, financial condition and operating results could be adversely affected.

If Swvl fails to cost-effectively attract and retain new riders or to increase utilization of its platform by existing riders, Swvl’s business, financial condition and operating results could be harmed.

Swvl’s success depends in part on its ability to cost-effectively attract and retain new riders and increase utilization of Swvl’s platform by current riders. Riders have a wide variety of options for transportation, including public transportation, taxis and other ridesharing offerings. Rider preferences may also change from time to time with the advent of new mobility technologies, different behaviors and attitudes towards the environment and new urban planning practices (including increased focus on public transportation and public-private partnerships with respect to mobility). To expand its rider base, Swvl must appeal to new riders who have historically used other forms of transportation or other ridesharing platforms. Swvl believes that its paid marketing initiatives have been critical in promoting awareness of Swvl’s brand and offerings, which in turn leads to new riders using Swvl for the first time and drives rider Utilization (calculated as Total Bookings divided by Total Available Seats, over the period of measurement). Further, as Swvl continues to expand into new geographic areas, it will be relying in part on referrals from existing riders to attract new riders. However, Swvl’s brand and ability to build trust with existing and new riders may be adversely affected by complaints and negative publicity about Swvl, its offerings, its policies, including its pricing algorithms, drivers using its platform, or its competitors, even if factually incorrect or based on isolated incidents. Further, if existing and new riders do not perceive the transportation services provided by drivers using Swvl’s platform to be reliable, safe and affordable, or if Swvl fails to offer new and relevant offerings and features on its platform, Swvl may not be able to attract or retain riders or to increase their utilization of its platform. Further, government and private business actions in response to the COVID-19 pandemic, such as travel bans, travel restrictions, shelter-in-place orders, increased reliance on work-from-home rather than working in offices, and people and businesses electing to move away from more densely populated cities, have decreased and may in the future decrease utilization of Swvl’s platform by riders including longer term.

As Swvl continues to expand into new geographic areas, it will be relying in part on referrals from existing riders to attract new riders, and therefore must ensure that its existing riders remain satisfied with its offerings. If

 

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Swvl fails to continue to grow its rider base, retain existing riders or increase the overall utilization of its platform by existing riders, Swvl’s business, financial condition and operating results could be adversely affected.

Swvl depends on its key personnel and other highly skilled personnel, and if Swvl fails to attract, retain, motivate or integrate its personnel, Swvl’s business, financial condition and operating results could be adversely affected.

Swvl’s success depends in part on the continued service of its co-founder and Chief Executive Officer, senior management team, key technical employees and other highly skilled personnel and on Swvl’s ability to identify, hire, develop, motivate, retain and integrate highly qualified personnel for all areas of its organization. Swvl may not be successful in attracting and retaining qualified personnel to fulfill its current or future needs, and actions Swvl takes in response to the impact of the COVID-19 pandemic on Swvl’s business may harm Swvl’s reputation or impact its ability to recruit qualified personnel in the future. Please see the section entitled “The COVID-19 pandemic and related responsive measures have disrupted and negatively impacted, and may in the future disrupt and negatively impact, Swvl’s business, financial condition, and operating results. Swvl cannot predict the extent to which the pandemic and related effects may in the future adversely impact its business, financial condition and operating results, and the execution of Swvl’s strategic objectives.” Swvl’s competitors may be successful in recruiting and hiring members of Swvl’s management team or other key employees, and it may be difficult to find suitable replacements on a timely basis, on competitive terms, or at all. If Swvl is unable to attract and retain the necessary personnel, particularly in critical areas of its business, Swvl may not achieve its strategic goals.

Swvl faces intense competition for highly skilled personnel. To attract and retain top talent, Swvl has had to offer, and Swvl believes it needs to continue to offer, competitive compensation and benefits packages. Job candidates and existing personnel often consider the value of the equity awards they receive in connection with their employment. If the perceived value of Swvl’s equity or equity awards declines or Swvl is unable to provide competitive compensation packages, Swvl’s ability to attract and retain highly qualified personnel may be adversely affected and Swvl may experience increased attrition. Swvl may need to invest significant amounts of cash and equity to attract and retain new employees and expend significant time and resources to identify, recruit, train and integrate such employees, and Swvl may never realize returns on these investments. If Swvl is unable to effectively manage its hiring needs or successfully integrate new hires, Swvl’s efficiency, ability to meet forecasts and employee morale, productivity and retention could suffer, which could adversely affect Swvl’s business, financial condition and operating results.

Swvl’s reputation, brand and the network effects among the drivers and riders using Swvl’s platform are important to its success, and if Swvl is not able to maintain and continue developing its reputation, brand and network effects, its business, financial condition and operating results could be adversely affected.

Swvl believes that building a strong reputation and brand as a safe, reliable and affordable platform and continuing to increase the strength of the network effects among the drivers and riders using Swvl’s platform (i.e., the advantages that derive from having more drivers and riders using Swvl’s platform) are critical to its ability to attract and retain qualified drivers and riders. The successful development of Swvl’s reputation, brand and network effects depends on a number of factors, many of which are outside Swvl’s control. Negative perception of Swvl or its platform may harm Swvl’s reputation, brand and network effects, including as a result of:

 

   

complaints or negative publicity about Swvl or drivers or riders on its platform, its offerings or its policies and guidelines, including Swvl’s practices and policies with respect to drivers, or the ridesharing industry, even if factually incorrect or based on isolated incidents;

 

   

illegal, negligent, reckless or otherwise inappropriate behavior by drivers, riders or third parties;

 

   

a failure to offer riders competitive pricing and convenient service;

 

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a failure to provide the range of routes, dynamic routing, and ride types sought by riders;

 

   

actual or perceived inaccuracies in demand prediction and other defects or errors in Swvl’s platform;

 

   

concerns by riders or drivers about the safety of ridesharing and Swvl’s platform, including in light of the COVID-19 pandemic;

 

   

actual or perceived disruptions in Swvl’s platform, site outages, payment disruptions or other incidents that impact the reliability of Swvl’s offerings;

 

   

failure to protect Swvl’s customer personal data, or other privacy or data security breaches;

 

   

litigation involving, or investigations by regulators into, Swvl’s business;

 

   

users’ lack of awareness of, or compliance with, Swvl’s policies;

 

   

Swvl’s policies or changes thereto that users or others perceive as overly restrictive, unclear or inconsistent with Swvl’s values or mission or that are not clearly articulated;

 

   

a failure to enforce Swvl’s policies in a manner that users perceive as effective, fair and transparent;

 

   

a failure to operate Swvl’s business in a way that is consistent with Swvl’s stated values and mission;

 

   

inadequate or unsatisfactory user support service experiences;

 

   

illegal or otherwise inappropriate behavior by Swvl’s management team or other employees or contractors;

 

   

negative responses by drivers or riders to new offerings on Swvl’s platform;

 

   

a failure to balance the interests of driver and riders;

 

   

accidents or other negative incidents involving the use of Swvl’s platform;

 

   

perception of Swvl’s treatment of employees or contractors and Swvl’s response to employee sentiment related to political or social causes or actions of management;

 

   

political or social policies or activities; or

 

   

any of the foregoing with respect to Swvl’s competitors, to the extent such resulting negative perception affects the public’s perception of Swvl or its industry as a whole.

If Swvl does not successfully maintain and develop its brand, reputation and network effects and successfully differentiate its offerings from the offerings of competitors, Swvl’s business may not grow, Swvl may not be able to compete effectively and it could lose existing qualified drivers or existing riders or fail to attract new qualified drivers or new riders to use its platform, any of which could adversely affect Swvl’s business, financial condition and operating results.

Swvl’s company culture has contributed to its success and if Swvl cannot maintain this culture as it grows, its business, financial condition and operating results could be harmed.

Swvl believes that its culture, which promotes proactivity, taking ownership and putting riders and drivers first has been critical to its success. Swvl faces a number of challenges that may affect its ability to sustain its corporate culture, including:

 

   

failure to identify, attract, reward and retain people in leadership positions in Swvl’s organization who share and further Swvl’s culture, values and mission;

 

   

Swvl’s rapid growth strategy, which involves increasing the size and geographic dispersion of Swvl’s workforce;

 

   

shelter-in-place orders in certain jurisdictions where Swvl operates that have required many of Swvl’s employees to work remotely, as well as return to work arrangements and workplace strategies;

 

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the inability to achieve adherence to Swvl’s internal policies and core values, including Swvl’s diversity, equity and inclusion practices;

 

   

competitive pressures to move in directions that may divert Swvl from its mission, vision and values;

 

   

the continued challenges of the rapidly-evolving mass-transit ridesharing industry;

 

   

the increasing need to develop expertise in new areas of business and operate across borders;

 

   

potential negative perception of Swvl’s treatment of employees or Swvl’s response to employee sentiment related to political or social causes or actions of management;

 

   

changes to employee work arrangements in response to COVID-19; and

 

   

the integration of new personnel and businesses from potential acquisitions.

If Swvl is not able to maintain its corporate culture, Swvl’s business, financial condition and operating results could be adversely affected.

Swvl’s growth strategy will subject it to additional costs, compliance requirements and risks, and Swvl’s plans may not be successful.

Swvl intends to pursue a rapid growth strategy to expand its operations into new international markets. In 2022, Swvl aims to expand its Swvl Retail and Swvl Travel offerings in countries in the Middle East and Latin America, and to introduce its Swvl Business offerings in countries in Latin America, Western Europe and Southeast Asia. Operating in a large number of countries will require significant attention of Swvl’s management to oversee operations over a broad geographic area with varying legal and regulatory environments, competitive dynamics and cultural norms and customs and will place significant burdens on Swvl’s operations, engineering, finance and legal and compliance functions. Swvl may incur significant operating expenses as a result of its international presence and its expansion plans will be subject to a variety of challenges, including:

 

   

recruitment and retention of talented and capable employees in foreign countries while maintaining Swvl’s company culture in each of its markets;

 

   

competition from local incumbents with existing knowledge of local markets that may market and operate more effectively and may enjoy greater local affinity or awareness;

 

   

differing rider and driver demand dynamics, which may make Swvl’s offerings less successful;

 

   

the need to adapt to new markets, including the need to localize Swvl’s offerings and marketing efforts to the preferences of local riders and drivers;

 

   

public health concerns or emergencies, including the COVID-19 pandemic and other highly communicable diseases or viruses;

 

   

compliance with varying laws and regulatory standards, including with respect to data privacy, cybersecurity, tax, trade compliance, environmental and other vehicle standards and local regulatory restrictions;

 

   

the risk that local laws and business practices favor local competitors;

 

   

compliance with the U.S. Foreign Corrupt Practices Act of 1977, as amended (the “FCPA”) and similar laws in other jurisdictions;

 

   

obtaining any required government approvals, licenses or other authorizations;

 

   

varying levels of Internet and mobile technology adoption and infrastructure;

 

   

currency exchange restrictions or costs and exchange rate fluctuations;

 

   

political, economic, or social instability, which may cause disruptions to Swvl’s business;

 

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operating in jurisdictions with reduced, nonexistent or unenforceable protection for intellectual property rights or where Swvl does not have registered intellectual property rights in its brand and/or technology; and

 

   

limitations on the repatriation and investment of funds as well as foreign currency exchange restrictions.

Swvl’s limited experience in operating its business in multiple countries increases the risk that any potential expansion efforts that Swvl may undertake will not be successful and may require Swvl to terminate its operations in certain markets. Swvl intends to invest substantial time and resources to expand its operations internationally. As a result, if Swvl is unable to manage these risks effectively, Swvl’s business, financial condition and operating results could be adversely affected.

If Swvl fails to effectively manage its growth and optimize its organizational structure, Swvl’s business, financial condition and operating results could be adversely affected.

Since its launch in 2017, Swvl has experienced rapid growth in its business, revenues and the number of users on its platform. Swvl expects this growth to continue following the recovery of the world economy from the COVID-19 pandemic. This growth has placed, and will continue to place, significant demands on Swvl’s management and Swvl’s operational and financial infrastructure. The steps Swvl takes to manage its business operations, including policies for employees, and to align Swvl’s operations with Swvl’s strategies for growth, may adversely affect Swvl’s reputation and brand and its ability to recruit, retain and motivate highly skilled personnel.

Swvl’s ability to manage growth and business operations effectively and to integrate new employees, technologies and acquisitions into its existing business will require Swvl to continue to expand its operational and financial infrastructure and to continue to retain, attract, train, motivate and manage employees. Continued growth could strain Swvl’s ability to develop and improve its operational, financial and management controls, enhance its reporting systems and procedures, recruit, train and retain highly skilled personnel and maintain user satisfaction. Additionally, if Swvl does not effectively manage the growth of its business and operations, then Swvl’s reputation, brand, business, financial condition and operating results could be adversely affected.

Swvl has not historically maintained insurance coverage for its operations. Swvl may not be able to mitigate the risks facing its business and could incur significant uninsured losses, which could adversely affect its business, financial condition and operating results.

Swvl does not currently maintain any insurance policies to cover general business liabilities, business interruptions, crime, losses of key personnel or security breaches and incidents relating to its network systems or operations. As a result, any losses arising from or relating to, among other things, personal injury, property damage, labor and employment disputes, commercial disputes, fraudulent transactions or other criminal activity, business interruptions, noncompliance with applicable laws and regulations, infringement or misappropriation of intellectual property or security or privacy breaches, or the successful assertion of one or more claims against Swvl related to any of the foregoing, could require Swvl to service such losses or claims using internal resources, which would have an adverse effect on Swvl’s business, financial condition and operating results.

Swvl’s business depends on insurance coverage which is independently required to be maintained by the drivers using its platform.

Swvl is in the process of obtaining coverage for general business liabilities and cyber insurance. Swvl is also evaluating whether other types of insurance coverage may be appropriate for its business, such as transportation network company insurance. Nevertheless, Swvl may not obtain enough insurance to adequately mitigate the operations-related risks it faces, and some operations-related risks may not be covered at all. Swvl may have to pay high premiums, self-insured retentions or deductibles for the coverage Swvl does obtain. Swvl also may be unable to obtain cyber insurance coverage in certain countries at commercially reasonable rates or at all, and it

 

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may experience losses as a result. Additionally, if any of Swvl’s insurance providers becomes insolvent, such providers could be unable to pay any operations-related claims that Swvl makes. Certain losses may be excluded from insurance coverage.

While Swvl operates in over 20 countries (not including the countries of operation of Zeelo, a company which Swvl announced a definitive agreement to acquire in April 2022), Swvl maintains and provides medical insurance for all drivers and riders using its platform only in Egypt. To do so, Swvl relies on a limited number of third-party insurance service providers to service related claims. If any of Swvl’s third-party insurance service providers fails to service claims to Swvl’s expectations, discontinues or increases the cost of coverage or changes the terms of such coverage in a manner unfavorable to drivers, riders or to Swvl, Swvl cannot guarantee that it would be able to secure replacement coverage or services on reasonable terms in an acceptable time frame or at all. If Swvl cannot find alternate third-party insurance service providers on acceptable terms, Swvl may incur additional expenses related to servicing such ride-related claims using internal resources.

Insurance providers have raised premiums and deductibles for many types of claims, coverages and for a variety of commercial risk and are likely to do so in the future. As a result, Swvl’s insurance and claims expense could increase, or Swvl may decide to raise its deductibles or self-insured retentions when policies are renewed or replaced to manage pricing pressure. Swvl’s business, financial condition and operating results could be adversely affected if (i) cost per claim, premiums or the number of claims significantly exceeds Swvl’s historical experience, (ii) Swvl experiences a claim in excess of Swvl’s coverage limits, (iii) Swvl’s insurance providers fail to pay on Swvl’s insurance claims, (iv) Swvl experiences a claim for which coverage is not provided, (v) the number of claims and average claim cost under Swvl’s deductibles or self-insured retentions differs from historic averages or (vi) an insurance policy is cancelled or not renewed.

Illegal, improper or otherwise inappropriate activity of riders, drivers or other users, whether or not occurring while utilizing Swvl’s platform, could expose Swvl to liability and harm its business, brand, financial condition and operating results.

Illegal, improper or otherwise inappropriate activities by riders, drivers or other users, including the activities of individuals who may have previously engaged with, but are not then receiving or providing services offered through, Swvl’s platform could adversely affect Swvl’s brand, business, financial condition and operating results. These activities may include assault, theft, unauthorized use or sharing of rider or driver accounts and other misconduct. Such conduct could expose Swvl to liability or adversely affect Swvl’s brand or reputation.

While Swvl has taken measures to guard against these illegal, improper or otherwise inappropriate activities, these measures may prove inadequate to prevent such activities or Swvl may not be successful in implementing them effectively. Although Swvl requires certain qualification processes for drivers using its platform, including submission of criminal record checks in certain jurisdictions, these qualification processes may not expose all potentially relevant information and may be limited in certain jurisdictions according to national and local laws, and Swvl may fail to conduct such qualification processes adequately or identify information that could be relevant to a determination of driver eligibility.

Further, any negative publicity related to the foregoing, whether an incident occurred on Swvl’s platform, on Swvl’s competitors’ platforms, or on any ridesharing platform, could adversely affect Swvl’s reputation and brand or public perception of the ridesharing industry as a whole, which could negatively affect demand for Swvl’s platform and potentially lead to increased regulatory or litigation exposure. Any of the foregoing risks could harm Swvl’s business, financial condition and operating results.

 

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Changes to Swvl’s pricing could adversely affect its ability to attract or retain qualified drivers and riders to use its platform.

Demand for Swvl’s offerings is sensitive to the price of rides. Many factors, including operating costs, legal and regulatory requirements or constraints and Swvl’s current and future competitors’ pricing and marketing strategies, could significantly affect Swvl’s pricing strategies. Competitors may offer, or may in the future offer, lower-priced or a broader range of offerings or use marketing strategies that enable them to attract or retain qualified drivers and riders at a lower cost than Swvl does.

Swvl uses pricing algorithms to set prices depending on the route, time of day and expected rates of Utilization. In the past, Swvl has made pricing changes and spent significant resources on marketing rider incentives, and there can be no assurance that Swvl will not be forced, through competitive pressures, regulation or otherwise, to reduce the price of rides for riders, to increase the rates Swvl offers for driver services or to increase Swvl’s marketing and other expenses to attract and retain qualified drivers and riders using its platform.

Furthermore, the economic sensitivity of drivers and riders using Swvl’s platform may vary by geographic location, and as Swvl expands into new markets, its pricing methodologies may not enable it to compete effectively in these locations. Local regulations may affect Swvl’s pricing in certain geographic locations, which could amplify these effects. For example, Swvl and other ridesharing companies have made commitments to the Egyptian Competition Authority not to set prices below certain profitability benchmarks with respect to their B2C ridesharing offerings in Egypt. Swvl has launched, and may in the future launch, new pricing strategies and initiatives, such as subscription packages and driver or rider loyalty programs. Swvl has also modified, and may in the future modify, existing pricing methodologies, such as its up-front pricing policy. Any of the foregoing actions may not ultimately be successful in attracting and retaining qualified drivers and riders.

Any actual or perceived security or privacy breach could interrupt Swvl’s operations and adversely affect its reputation, brand, business, financial condition and operating results. Swvl has previously experienced a data breach that resulted in the exposure of customer information.

Swvl’s business involves the collection, storage, transmission and other processing of Swvl’s users’ personal and other sensitive data. An increasing number of organizations, including large online and off-line merchants and businesses, other large Internet companies, financial institutions and government institutions, have disclosed breaches of their information security systems and other information security incidents, some of which have involved sophisticated and highly targeted attacks. Because techniques used to obtain unauthorized access to or to sabotage information systems change frequently and may not be known until launched, Swvl may be unable to anticipate, detect or prevent these attacks. Swvl has previously experienced a data breach. In July 2020, unauthorized parties gained access to a Swvl database containing identifiable information of its riders by exploiting a breach in certain third-party software used by Swvl. While such breach has not had a material impact on Swvl’s business or operations and Swvl has since implemented measures designed to restrict any similar data breach, unauthorized parties may in the future gain access to Swvl’s systems or facilities through various means, including gaining unauthorized access into Swvl’s systems or facilities or those of Swvl’s service providers, partners or users on Swvl’s platform, or attempting to fraudulently induce Swvl’s employees, service providers, partners, users or others into disclosing rider names, passwords, payment card information or other sensitive information, which may in turn be used to access Swvl’s information technology systems, or attempting to fraudulently induce Swvl’s employees, partners or others into manipulating payment information, resulting in the fraudulent transfer of funds to criminal actors. In addition, users on Swvl’s platform could have vulnerabilities on their own mobile devices that are entirely unrelated to Swvl’s systems and platform, but could mistakenly attribute their own vulnerabilities to Swvl. Further, breaches experienced by other companies may also be leveraged against Swvl. For example, credential stuffing and ransomware attacks are becoming increasingly common, and sophisticated actors can mask their attacks, making them increasingly difficult to identify and prevent. Certain efforts may be state-sponsored or supported by significant financial and technological resources, making them even more difficult to detect.

 

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Although Swvl has developed systems and processes that are designed to protect users’ data, prevent data loss and prevent other privacy or security breaches, these measures cannot guarantee security. Swvl’s information technology and infrastructure may be vulnerable to cyberattacks or security breaches, and third parties may be able to access Swvl’s users’ payment card data and other personal information that are accessible through those systems. Swvl is still a growing company and may not have sufficient dedicated personnel or internal oversight to detect, identify, and respond to all privacy or security incidents. Additionally, as Swvl expands its operations, including sharing data with third parties or continuing the work-from-home practices of its employees (including increased use of video conferencing), Swvl’s exposure to cyberattacks or security breaches may increase. Further, employee error, malfeasance or other errors in the storage, use or transmission of personal information could result in an actual or perceived privacy or security breach or other security incident. Although Swvl has policies restricting the access to the personal information it stores, these policies may be breached or prove inadequate.

Any actual or perceived breach of privacy or security could interrupt Swvl’s operations, result in Swvl’s platform being unavailable, result in loss or improper disclosure of data, result in fraudulent transfer of funds, harm Swvl’s reputation and brand, damage Swvl’s relationships with strategic partners and third-party service providers, result in significant legal, regulatory and financial exposure and lead to loss of driver or rider confidence in, or decreased use of, Swvl’s platform, any of which could adversely affect Swvl’s business, financial condition and operating results. Any breach of privacy or security impacting any entities with which Swvl may share or disclose data could have similar effects. Further, any cyberattacks or security and privacy breaches directed at Swvl’s competitors could reduce confidence in the ridesharing industry as a whole and, as a result, reduce confidence in Swvl.

Additionally, responding to any privacy or security breach, including defending against claims, investigations or litigation in connection with any privacy or security breach, regardless of their merit, could be costly and divert management’s attention. Swvl does not currently maintain any insurance to cover security breaches and incidents or losses relating to its network systems or operations. As a result, the successful assertion of one or more large claims against Swvl could have an adverse effect on Swvl’s reputation, brand, business, financial condition and operating results.

Defects, errors or vulnerabilities in Swvl’s applications, backend systems or other technology systems and those of third-party technology providers could harm Swvl’s reputation and brand and adversely impact Swvl’s business, financial condition and operating results.

The software underlying Swvl’s platform is highly complex and may contain undetected errors or vulnerabilities, some of which may only be discovered after the code has been released. The third-party software that Swvl incorporates into its platform may also be subject to errors or vulnerability. Any errors or vulnerabilities discovered in Swvl’s code or third-party software could result in negative publicity, loss of users, loss of revenue and access or other performance issues. Such vulnerabilities could also be exploited by malicious actors and result in exposure of data of users on Swvl’s platform, or otherwise result in a data breach. Swvl may need to expend significant financial and development resources to analyze, correct, eliminate or work around errors or defects or to address and eliminate vulnerabilities. Any failure to timely and effectively resolve any such errors, defects or vulnerabilities could adversely affect Swvl’s business, financial condition and operating results as well as negatively impact Swvl’s reputation or brand.

Swvl relies on various third-party product and service providers and if such third parties do not perform adequately or terminate their relationships with Swvl, Swvl’s costs may increase and its business, financial condition and operating results could be adversely affected.

Swvl’s success depends in part on its relationships with third-party product and service providers. For example, Swvl relies on third-parties to fulfill various marketing, web hosting, payment, communications and data analytics services to support Swvl’s platform. If any of Swvl’s partners terminates its relationship with

 

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Swvl, including as a result of COVID-19-related impacts to their business and operations or for competitive reasons, or refuses to renew its agreement on commercially reasonable terms, Swvl would need to find an alternate provider, and may not be able to secure similar terms or replace such providers in an acceptable time frame. While Swvl does not own or operate vehicles, in the event that vehicle manufacturers issue recalls or the supply of vehicles or automotive parts is interrupted, including as a result of public health crises, such as the COVID-19 pandemic, affecting the vehicles operating on Swvl’s platform, the availability of vehicles on Swvl’s platform could become constrained.

In addition, Swvl’s business may be adversely affected to the extent the software and services used by Swvl’s third-party service providers do not meet expectations, contain errors or vulnerabilities, are compromised or experience outages. Swvl cannot be certain that its licensors are not infringing the intellectual property rights of others or that the suppliers and licensors have sufficient rights to the technology in all jurisdictions in which Swvl may operate. If Swvl is unable to obtain or maintain rights to any of this technology because of intellectual property infringement claims brought by third parties against suppliers, licensors or Swvl itself, or if Swvl is unable to continue to obtain the technology or enter into new agreements on commercially reasonable terms, Swvl’s ability to develop its platform containing that technology could be severely limited and its business could be harmed. If Swvl is unable to obtain necessary technology from third parties, it may be forced to acquire or develop alternate technology, which may require significant time and effort and may be of lower quality or performance standards. This would limit and delay Swvl’s ability to provide new or competitive offerings and increase Swvl’s costs. If alternate technology cannot be obtained or developed, Swvl may not be able to offer certain functionality as part of its offerings, which could adversely affect Swvl’s business, financial condition and operating results.

Any of these risks could increase Swvl’s costs and adversely affect Swvl’s business, financial condition and operating results. Further, any negative publicity related to any of Swvl’s strategic partners and third-party service providers, including any publicity related to quality standards or safety concerns, could adversely affect Swvl’s reputation and brand, and could potentially lead to increased regulatory or litigation exposure.

If Swvl fails to effectively predict rider demand, to set pricing and routing accordingly or to run routes that are consistent with the availability of drivers using its platform, Swvl’s business, financial condition and operating results could be adversely affected.

Swvl relies on its proprietary technology to predict and dynamically update routing in response to changes in demand, to optimize pricing in response to such demand and to maximize per-vehicle Utilization. If Swvl is unable to effectively predict and meet rider demand and to update its routing and pricing accordingly, Swvl may lose ridership and its revenues may decrease. In addition, riders’ price sensitivity varies by geographic location, among other factors, and if Swvl is unable to effectively account for such variability in its pricing methodologies, its ability to compete effectively in these locations could be adversely affected. Swvl’s success also depends, in part, on its ability to match route plans with the availability and preferences of the drivers using its platform. If Swvl is unable to determine and allocate routes in a manner consistent with the availability and preferences of such drivers, drivers may reduce or discontinue their participation on Swvl’s platform and may use competitors’ platforms. Any of the foregoing risks could adversely impact Swvl’s business, financial condition and operating results.

If Swvl is not able to successfully develop new offerings on its platform and enhance its existing offerings, Swvl’s business, financial condition and operating results could be adversely affected.

Swvl’s ability to attract new qualified drivers and new riders, retain existing qualified drivers and existing riders and increase utilization of its offerings will depend in part on its ability to successfully create and introduce new offerings and to improve upon and enhance existing offerings. As a result, Swvl may introduce significant changes to its existing offerings or develop and introduce new and unproven offerings. If any of Swvl’s new or enhanced offerings are unsuccessful, including as a result of any inability to obtain and maintain required permits

 

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or authorizations or other regulatory constraints or because they fail to generate sufficient return on Swvl’s investments, Swvl’s business, financial condition and operating results could be adversely affected.

Furthermore, new driver or rider demands regarding platform features, the availability of superior competitive offerings or a deterioration in the quality of Swvl’s offerings or ability to bring new or enhanced offerings to market quickly and efficiently could negatively affect the attractiveness of Swvl’s platform and the economics of Swvl’s business, requiring it to make substantial changes to and additional investments in its offerings or business model. In addition, Swvl frequently experiments with and tests different offerings and marketing strategies. If these experiments and tests are unsuccessful, or if the offerings and strategies Swvl introduces based on the results of such experiments and tests do not perform as expected, Swvl’s ability to attract new qualified drivers and new riders, retain existing qualified drivers and existing riders and maintain or increase utilization of Swvl’s offerings may be adversely affected.

Swvl’s market is characterized by rapid technology change, particularly across the SaaS and TaaS offerings, which require it to develop new products and product innovations, and any delays in such development could adversely affect market adoption of Swvl’s products and its financial results. Developing and launching new offerings or enhancements to the existing offerings on Swvl’s platform, such as Swvl’s launch of its TaaS offering in 2020 and its anticipated launch of its SaaS offering for use by corporate customers and other third parties, involves significant risks and uncertainties, including risks related to the reception of such offerings by existing and potential future drivers and riders, increases in operational complexity, unanticipated delays or challenges in implementing such offerings or enhancements, increased strain on Swvl’s operational and internal resources (including an impairment of Swvl’s ability to accurately forecast rider demand and the number of drivers using Swvl’s platform) and negative publicity in the event such new or enhanced offerings are perceived to be unsuccessful. Swvl intends to continue to scale its business rapidly, and significant new initiatives have in the past resulted in, and in the future may result in, operational challenges affecting Swvl’s business.

In addition, developing and launching new offerings and enhancements to Swvl’s existing offerings may involve significant up-front capital investments. Such investments may not generate a positive return on investment. Further, from time to time Swvl may reevaluate, discontinue and/or reduce these investments and decide to discontinue one or more of its offerings. Any of the foregoing risks and challenges could negatively impact Swvl’s ability to attract and retain qualified drivers and riders, its ability to increase utilization of its offerings and its visibility into expected operating results, and could adversely affect Swvl’s business, financial condition and operating results. Additionally, Swvl’s near-term operating results may be impacted by long-term investments in the future.

Swvl may require additional capital to support the growth of its business, which capital may not be available on terms acceptable to it, or at all. To the extent Swvl obtains additional capital through future issuances of Swvl Securities, such issuances could dilute the interests of existing shareholders.

Since commencing operations in 2017, Swvl has funded its operations and capital expenditures primarily through equity issuances, convertible note issuances and cash generated from operations. To support and grow its business, Swvl must have sufficient capital to continue to make significant investments in new and existing offerings (including by continuing to offer discounts and promotions to riders and drivers) and to fund potential acquisitions. The rapid growth of Swvl’s business has increased Swvl’s use of and need for capital, and Swvl may be required to secure additional financing to continue to grow, both organically and inorganically.

Swvl expects to use the funds it received in connection with the Business Combination to support and grow its business. Receipt of $10 million of those funds is conditioned on the entry into an investment framework agreement between the European Bank for Reconstruction and Development (“EBRD”) and Swvl. As a result, it is possible that receipt of the portion of funds that is conditioned on entry into an investment framework agreement with EBRD may not occur for some time or at all. Pursuant to the EBRD subscription agreement, either Swvl or EBRD may elect to terminate the EBRD subscription agreement because the investment framework agreement was not entered into on or prior to May 25, 2022. As of the date of this prospectus such

 

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subscription agreement has not been terminated and negotiations of such agreement between the parties are ongoing, but any delay in or failure to enter into such agreement or any other reason may result in Swvl or EBRD electing to terminate the EBRD subscription agreement and Swvl needing to seek additional and alternative sources of financing earlier than expected. Such financing may not be available on favorable terms, or at all. In such case, Swvl may not be able to continue to make investments at the rate necessary to sustain Swvl’s growth.

On March 22, 2022, we entered into an equity line financing pursuant to the Purchase Agreement with B. Riley pursuant to which B. Riley committed to purchase up to $471,742,855 of Class A Ordinary Shares, subject to certain limitations and conditions set forth in the Purchase Agreement. The Class A Ordinary Shares that may be issued under the Purchase Agreement may be sold by us to B. Riley at our discretion from time to time over an approximately 24-month period commencing on the date that a related resale registration statement is declared effective by the SEC. We may ultimately decide to sell all, some, or none of the Class A Ordinary Shares that may be available for us to sell to B. Riley pursuant to the Purchase Agreement. The purchase price for the shares that we may sell to B. Riley will fluctuate based on the price of our Ordinary Shares. Depending on market liquidity at the time, sales of such shares may cause the trading price of our Class A Ordinary Shares to fall.

If and when we do sell shares to B. Riley, after B. Riley has acquired the shares, B. Riley may resell all, some, or none of those shares at any time or from time to time in its discretion. Therefore, our sales to B. Riley could result in substantial dilution to the interests of other holders of our Class A Ordinary Shares. Additionally, the sale of a substantial number of shares of our Class A Ordinary Shares to B. Riley, or the anticipation of such sales, could make it more difficult for us to sell equity or equity-related securities in the future at a price that we might otherwise wish to effect sales. As consideration for B. Riley’s commitment under the purchase agreement to purchase our Class A Ordinary Shares, we issued 386,971 Class A Ordinary Shares to B. Riley and such Ordinary Shares are fully earned and non-refundable, even in the event we do not sell any Class A Ordinary Shares to B. Riley under the Purchase Agreement.

Swvl may issue additional Swvl Securities in the future. For example, Swvl may issue additional Swvl Securities under an employee incentive plan, in the public market, a private placement or as part of an acquisition in which the seller receives Swvl Securities as consideration. The issuance of additional Swvl Securities by Swvl may significantly dilute the equity interests of existing Swvl shareholders; could cause a change in control if a substantial number of Swvl Securities are issued, which may adversely affect prevailing market prices for Swvl Securities.

Swvl’s ability to obtain financing in the future will depend upon, among other things, Swvl’s development efforts, business plans and operating performance and the condition of the capital markets at the time Swvl seeks such financing. Additionally, COVID-19 may impact Swvl’s access to capital and make raising additional capital more difficult or available only on less favorable terms. Swvl cannot be certain that additional financing will be available to it on favorable terms, or at all. If Swvl is unable to obtain adequate financing or financing on terms satisfactory to it or within the timeframe it requires, its ability to continue to support its business growth and to respond to business challenges could be significantly limited, and Swvl’s business, financial condition and operating results could be adversely affected.

Swvl’s metrics and estimates, including the key metrics included in this prospectus, are subject to inherent challenges in measurement, and real or perceived inaccuracies in those metrics may harm Swvl’s reputation and negatively affect Swvl’s business, financial condition and operating results.

Swvl regularly reviews and may adjust its processes for calculating the metrics used to evaluate growth, measure performance and make strategic decisions. These metrics, including Utilization, avoided emissions and driver retention rates, among others, which are calculated using internal company data and have not been evaluated by a third-party. Swvl’s metrics may differ from estimates published by third parties or from similarly titled metrics of Swvl’s competitors due to differences in methodology or the assumptions on which Swvl relies, and Swvl may make material adjustments to its processes for calculating its metrics in order to enhance accuracy, because better information becomes available or for other reasons, which may result in changes to such metrics.

 

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The estimates and forecasts Swvl discloses relating to the size and expected growth of Swvl’s addressable market may prove to be inaccurate. Even if the markets in which Swvl competes meet the size estimates and growth Swvl has forecasted, Swvl’s business could fail to grow at similar rates, if at all. Additionally, while Swvl may at times create and publish metrics or other disclosures regarding environmental, social and governance (“ESG”) matters, many of the statements in those voluntary disclosures are based on expectations and assumptions that may or may not be representative of current or actual risks or events or forecasts of expected risks or events, including the costs associated therewith. Such expectations and assumptions are necessarily uncertain given the long timelines involved and the lack of an established single approach to identify, measuring, and reporting on many ESG matters. If investors or analysts do not consider Swvl’s metrics to be accurate representations of its business, or if Swvl discovers material inaccuracies in its metrics, then Swvl’s business, financial condition and operating results could be adversely affected.

Swvl’s marketing efforts to help grow its business may not be effective.

Promoting awareness of Swvl’s offerings is important to Swvl’s ability to grow its business and to attract new qualified drivers and riders and can be costly. Swvl believes that much of the growth in its rider base and the number of drivers using its platform is attributable to its paid marketing initiatives. Swvl’s marketing efforts currently include offline marketing (such as billboard advertisements and in-person promotional events), online marketing (such as social media and Internet-driven advertising campaigns), and partnerships with other businesses, through which Swvl offers promotions and other incentives to the customers of such businesses. As Swvl expands its business into new markets, its marketing initiatives may become increasingly expensive, and generating a meaningful return on those initiatives may be difficult. Even if Swvl successfully increases revenue due to its paid marketing efforts, such an increase may not offset the additional marketing expenses Swvl incurs.

If Swvl’s marketing efforts are not successful in promoting awareness of Swvl’s offerings or attracting new qualified drivers, riders, or corporate customers, or if Swvl cannot cost-effectively manage its marketing expenses, Swvl’s operating results and financial condition could be adversely affected. If Swvl’s marketing efforts successfully increase awareness of its offerings, this could also lead to increased public scrutiny of its business and increase the likelihood of third parties bringing legal proceedings against Swvl. Any of the foregoing risks could harm Swvl’s business, financial condition, and operating results.

Any failure to offer high-quality user support may harm Swvl’s relationships with users and could adversely affect Swvl’s reputation, brand, business, financial condition, and operating results.

Swvl’s ability to attract and retain drivers, riders and corporate customers to use its platform depends partly on the ease and reliability of its offerings, including its ability to provide high-quality support. Riders, drivers and other users of Swvl’s platform depend on Swvl’s support services to resolve any issues relating to its offerings, such as issues relating to payments or reporting a safety incident. Swvl’s ability to provide adequate and timely support is dependent on its ability to automate support services for simple issues (such as route inquiries) and, for other issues, to retain and deploy third-party service providers who are qualified to support users and sufficiently knowledgeable regarding Swvl’s offerings. As Swvl continues to grow its business and improve and expand its offerings, it will face challenges in providing quality support services at scale. As Swvl expands its offerings into new territories, it will be required to provide support services specific to its offerings and the needs of users in the applicable market. Furthermore, the COVID-19 pandemic may impact Swvl’s ability to provide adequate and timely support (such as a decrease in the availability of service providers and an increase in response time). Any failure to provide high-quality user support, or a market perception that Swvl does not offer high-quality support, could adversely affect Swvl’s reputation, brand, business, financial condition and operating results.

Systems failures and resulting interruptions in the availability of Swvl’s website, applications, platform, or offerings could adversely affect Swvl’s business, financial condition, and operating results.

Swvl’s systems, or those of the third parties upon which Swvl relies, may experience service interruptions or degradation because of hardware and software defects or malfunctions, distributed denial-of-service and other

 

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cyberattacks, human error, earthquakes, hurricanes, floods, fires, natural disasters, power losses, disruptions in telecommunications services, fraud, military or political conflicts, terrorist attacks, computer viruses, ransomware, malware or other events. Swvl’s systems may also be subject to break-ins, sabotage, theft and intentional acts of vandalism, including by Swvl’s employees. Some of Swvl’s systems are not fully redundant, and Swvl’s disaster recovery planning may not be sufficient for all eventualities. Any business interruption insurance that Swvl obtains in the future may not be adequate to cover all of Swvl’s losses that may result from interruptions in Swvl’s service due to systems failures and similar events.

Swvl may experience system failures and other events or conditions from time to time that interrupt the availability or reduce or affect the speed or functionality of Swvl’s offerings. These events could result in loss of revenue. A prolonged interruption in the availability or reduction in the availability, speed, or other functionality of Swvl’s offerings could adversely affect Swvl’s business and reputation and could result in the loss of users. Moreover, to the extent that any system failure or similar event results in harm to the users using its platform, Swvl may make voluntary payments to compensate for such harm or the affected users could seek monetary recourse or contractual remedies from Swvl for their losses and such claims, even if unsuccessful, would likely be time-consuming and costly for Swvl to address.

Swvl’s business could be adversely impacted by changes in users’ access to the Internet and mobile devices or unfavorable changes in, or Swvl’s failure to comply with, existing or future laws governing the Internet and mobile devices.

Swvl’s business depends on users’ access to its platform via the Internet and mobile devices. Swvl operates in and plans to expand into markets that may have low levels of Internet penetration or provide limited Internet connectivity in some areas. The price of mobile devices and Internet access may limit Swvl’s potential growth in such markets. Internet infrastructure in such markets may not support, and may be disrupted by, continued growth in the number of Internet users, their frequency of use or their bandwidth requirements. Any such failure in Internet or mobile device accessibility, even for a short period, could adversely affect Swvl’s business, financial condition, or operating results.

Swvl is subject to several laws and regulations specifically governing the Internet and mobile devices that are constantly evolving. Existing and future laws and regulations, or changes thereto, may impede the growth and availability of the Internet and Swvl’s offerings, require Swvl to change its business practices, or raise compliance costs or other costs of doing business. These laws and regulations, which continue to evolve, cover taxation, privacy and data protection, pricing, copyrights, mobile and other communications, advertising practices, consumer protections, online payment services, and the characteristics and quality of offerings, among other things. Any failure, or perceived failure, by Swvl to comply with any of these laws or regulations could result in damage to Swvl’s reputation and brand, a loss of users, and fines or proceedings by governmental agencies, any of which could adversely affect Swvl’s business, financial condition and operating results.

Swvl relies on mobile operating systems and application marketplaces to make its mobile applications available to the drivers and riders using its platform. If Swvl does not effectively operate with or receive favorable placements within such application marketplaces and maintain high user reviews, Swvl’s usage or brand recognition could decline and Swvl’s business, financial results and operating results could be adversely affected.

Swvl depends in part on mobile operating systems, such as Android and iOS, and their respective application marketplaces to make its applications available to drivers and riders using its platform. Any changes in such systems and application marketplaces that degrade the functionality of Swvl’s applications or give preferential treatment to competitors’ applications could adversely affect the usage of Swvl’s platform. If such mobile operating systems or application marketplaces limit or prohibit Swvl from making its applications available to drivers and riders, make changes that degrade the functionality of Swvl’s applications, increase the cost of using its applications, impose terms of use unsatisfactory to Swvl or modify their search or ratings algorithms in ways that are detrimental to it, or if the placement of competitors in such mobile operating systems’

 

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application marketplaces is more prominent than the placement of Swvl’s applications, overall growth in Swvl’s rider or driver base could slow. Swvl’s applications have experienced fluctuations in number of downloads in the past, and Swvl anticipates fluctuations in the future. Any of the foregoing risks could adversely affect Swvl’s business, financial condition and operating results.

As new mobile devices and mobile platforms are released, there is no guarantee that certain mobile devices will continue to support Swvl’s platform or effectively roll out updates to Swvl’s applications. Additionally, Swvl needs to ensure that its offerings are designed to work effectively with a range of mobile technologies, systems, networks, and standards to deliver high-quality applications. Swvl may not be successful in developing or maintaining relationships with key participants in the mobile industry that enhance the experience of drivers and riders. If drivers or riders on Swvl’s platform encounter any difficulty accessing or using Swvl’s applications on their mobile devices, or if Swvl is unable to adapt to changes in popular mobile operating systems, Swvl’s business, financial condition, and operating results could be adversely affected.

Swvl depends on the interoperability of its platform across third-party applications and services that Swvl does not control.

Swvl’s platform integrates with various communications, ticketing, payment and social media vendors. As Swvl’s offerings expand and evolve, its platform may have an increasing number of integrations with other third-party applications, products and services. Third-party applications, products, and services are constantly evolving, and Swvl may not be able to maintain or modify its platform to ensure its compatibility with third-party offerings following development changes. In addition, some of Swvl’s competitors or third-parties upon which Swvl relies may take actions that disrupt the interoperability of Swvl’s platform with their products or services or exert strong business influence on Swvl’s ability to operate and distribute its platform or the terms on which it does so. As Swvl’s respective products evolve, Swvl expects the types and levels of competition to increase. Should any of Swvl’s competitors or other third-parties modify their products, standards or terms of use in a manner that degrades the functionality or performance of Swvl’s platform or is otherwise unsatisfactory to Swvl or gives preferential treatment to competitive products or services, Swvl’s products, platform, business, financial condition and operating results could be adversely affected.

If Swvl is unable to make acquisitions and investments or successfully integrate them into its business, or if Swvl enters into strategic transactions that do not achieve its objectives, Swvl’s business, financial condition and operating results could be adversely affected.

As part of its business strategy, Swvl may consider various potential strategic transactions, including acquisitions of businesses, new technologies, services and other assets and strategic investments that complement Swvl’s business. As Swvl grows, it also may explore investments in new technologies, which Swvl may develop or other parties may develop. There is no assurance that such acquired businesses will be successfully integrated into Swvl’s business or generate substantial revenue, or that Swvl’s investments in other technologies will generate returns for its business.

Acquisitions involve numerous risks, any of which could harm Swvl’s business and negatively affect Swvl’s business, financial condition and operating results, including:

 

   

intense competition for suitable acquisition targets, which could increase acquisition costs and adversely affect Swvl’s ability to consummate transactions on favorable or acceptable terms;

 

   

failure or material delay in consummating a transaction;

 

   

transaction-related lawsuits or claims;

 

   

Swvl’s ability to successfully obtain indemnification;

 

   

difficulties in integrating the technologies, operations, existing contracts, and personnel of an acquired company;

 

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difficulties in retaining key employees or business partners of an acquired company;

 

   

diversion of financial and management resources from existing operations or alternative acquisition opportunities;

 

   

failure to realize the anticipated benefits or synergies of a transaction;

 

   

failure to identify the problems, liabilities, or other shortcomings or challenges of an acquired company or technology, including issues related to intellectual property, data privacy, cybersecurity, regulatory compliance practices, litigation, revenue recognition or other accounting practices, or employee or user issues;

 

   

risks that regulatory bodies may enact new laws or promulgate new regulations that are adverse to an acquired company or business;

 

   

theft of Swvl’s trade secrets or confidential information that Swvl shares with potential acquisition candidates;

 

   

risks that an acquired company or investment in new offerings cannibalizes a portion of Swvl’s existing business;

 

   

adverse market reaction to an acquisition; and

 

   

dilution to our shareholders if we issue equity in connection with the acquisition (Swvl currently anticipates that potential future acquisitions are likely to involve equity as some or all of the consideration).

In addition, Swvl may divest businesses or assets or enter into joint ventures, strategic partnerships or other strategic transactions. These types of transactions also present certain risks. For example, Swvl may not achieve the desired strategic, operational, and financial benefits of a divestiture, partnership, joint venture, or other strategic transaction. Further, during the pendency of a divestiture or the integration or separation process of any strategic transaction, Swvl may be subject to risks related to a decline in business or a loss of employees, customers, or suppliers.

If Swvl fails to address the foregoing risks or other problems encountered in connection with past or future acquisitions of businesses, new technologies, services and other assets, strategic investments or other transactions, or if Swvl fails to integrate such acquisitions or investments successfully, or if it is unable to successfully complete other transactions or such transactions do not meet its strategic objectives, its business, financial condition and operating results could be adversely affected.

Swvl’s acquisitions of controlling interests in Shotl and Viapool and acquisitions of Volt Lines and door2door and announced acquisition of Zeelo may not be beneficial to Swvl as a result of the cost of integrating geographically disparate operations and the diversion of management’s attention from Swvl’s existing business, among other things, and these transactions involve the issuance of equity securities, which dilutes the interests of our existing shareholders. In addition, Swvl may not consummate all acquisitions that it announces.

On August 19, 2021, Swvl announced a definitive agreement to acquire a controlling interest in Shotl, a mass transit platform that partners with municipalities and corporations to provide on-demand bus and van services across Europe, South America and the Asia-Pacific region. The transaction closed on November 19, 2021.

On November 16, 2021, Swvl announced a definitive agreement to acquire a controlling interest in Viapool, a mass transit platform currently operating in Buenos Aires, Argentina and Santiago, Chile. The transaction closed on January 14, 2022.

On March 24, 2022, Swvl announced a definitive agreement to acquire a controlling interest in door2door, a high-growth mobility operations platform that partners with municipalities, public transit operators, corporations, and automotive companies to optimize shared mobility solutions across Europe. The transaction closed on June 3, 2022.

 

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On April 25, 2022, Swvl announced a definitive agreement to acquire Volt Lines, a Turkey-based B2B and Transport as a Service mobility business. The acquisition builds on Swvl’s recent acquisitions of controlling stakes in Shotl and Viapool, acquisition of door2door and pending acquisition of Zeelo. The Volt Lines transaction closed on May 25, 2022.

On April 28, 2022, Swvl announced a definitive agreement to acquire Zeelo, the UK’s largest smart bus platform and technology scale-up, measured by bookings. We believe joining forces with Zeelo provides a launchpad to rapidly land and expand business operations in three strategic developed markets including the UK, South Africa and the US with Zeelo’s seasoned team of over 160 staff across the globe, including 29 software engineers based out of Zeelo’s R&D hub in Barcelona.

Integration of the Shotl, Viapool, door2door, Volt Lines and Zeelo businesses and operations with Swvl’s existing business and operations will be a complex, time-consuming and costly process, particularly given that the acquisition will significantly diversify the geographic areas in which Swvl operates. Failure to successfully integrate the Shotl, Viapool door2door, Volt Lines and Zeelo businesses and operations with Swvl’s existing business and operations in a timely manner may have a material adverse effect on Swvl’s business, financial condition, results of operations and cash flows. Similarly, Swvl’s ongoing acquisition program exposes it to integration risks as well. The difficulties of combining the acquired operations include, among other things:

 

   

failure to realize expected profitability, growth or accretion;

 

   

integrating additional Swvl Business offerings into Swvl’s existing operations;

 

   

coordinating geographically disparate organizations, systems and facilities;

 

   

attracting sufficient platform users in Europe, Brazil, Japan, Argentina and Chile;

 

   

operating in several new jurisdictions and municipalities with unique laws and regulations;

 

   

consolidating corporate, technological and administrative functions;

 

   

the diversion of management’s attention from other business concerns;

 

   

rider loss from the acquired businesses; and

 

   

potential environmental or regulatory liabilities and title problems.

Certain of the acquisition agreements that we have entered into contain earn-out or other provisions that require us to abide by restrictions on the conduct of our business (or of the acquired business) for a period of time during the pendency of the transaction as well as following the completion of the acquisitions contemplated by such agreements. For example, some of these agreements require us to commit certain amounts of capital to such acquired businesses and limit our ability to terminate certain employees, in each case, over specified timeframes.

In addition, Swvl may not realize all of the anticipated benefits from its acquisition of controlling interests in Shotl, Viapool, door2door, Volt Lines and Zeelo, such as cost savings and revenue enhancements, for various reasons, including the fact that Swvl’s diligence was of a limited scope and performed by third party business consultants (and with respect to Shotl, solely with respect to Shotl’s business in Spain), difficulties integrating operations and personnel, higher costs, COVID-19 related interruption, unknown liabilities and fluctuations in markets.

The transactions with each of Shotl, Viapool, Volt, door2door and Zeelo involve the issuance by Swvl of equity consideration, which causes dilution to our stockholders. Assuming maximum performance of earn-outs (and the consummation of the acquisition of Zeelo, which cannot be guaranteed as described below), Swvl will issue an aggregate of 21,970,000 shares of its Class A Ordinary Shares (which equals approximately 18.5% of Swvl’s total outstanding shares of Class A Ordinary Shares as of the date of this prospectus). Swvl expects to register for resale these shares at a future date in accordance with its contractual obligations. The future resale of such shares may cause the market price of Swvl’s shares to drop significantly. Swvl currently anticipates that potential future acquisitions are likely to involve equity as some or all of the acquisition consideration, and are also likely to entail an obligation on Swvl to register such shares for resale.

 

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Many of our publicly announced acquisitions have been, and we anticipate acquisitions we may announce in the future will often be, structured in a manner whereby the consummation of the acquisition is to occur on a date subsequent to announcement of the acquisition. For example consummation of the acquisition may be subject to the satisfaction or waiver of certain closing conditions. Factors arising between announcement of the acquisition and anticipated closing may prevent, delay or otherwise materially adversely affect the completion of such acquisitions. For example, our acquisition of Zeelo did not close in May 2022 as originally expected. At this time, with recent market changes, such as declining stock market values and the related increase in cost of equity capital, certain completion deliverables remaining outstanding as of the date of this prospectus and the ongoing discussions between the parties around modifications to the transaction, including whether to continue to pursue the transaction, there is no certainty as to whether the transaction will complete, and if so on what terms, nor whether any potential disputes may raise. Please see the section entitled “Recent Developments—Definitive Agreement to Acquire Zeelo”. The inability to complete our acquisition of Zeelo or any other acquisition we may announce, or a change in terms of any such transaction, could cause Swvl to fail to realize some or all the benefits that it expected to achieve, and there could also be resulting disputes or reputational harm.

Swvl does not have written contractual arrangements in place with certain of its historically material customers.

Swvl has provided, and continues to provide, TaaS services to certain corporate customers without a written contract governing such arrangement. These non-contractual arrangements with TaaS customers made up approximately 3%, 6% and 7% of Swvl’s revenue in each of fiscal year 2019, fiscal year 2020 and fiscal year 2021, respectively. While the counterparties have performed under such arrangements without any material disputes, in the event of a dispute, the lack of a written contract could make it particularly difficult for Swvl to enforce its rights under the arrangement, if at all. Swvl is in the process of entering into definitive documentation to govern its relationships with such corporate customers and is setting up internal procedures to ensure that future relationships are governed by written contractual arrangements at the outset. As a result, Swvl expects to be able to reduce the percentage of revenue attributable to TaaS customers without contractual arrangements over time. However, there is no guarantee that existing TaaS customers will agree to enter into definitive documentation, and there are no assurances entry into such definitive documentation would allow Swvl to enforce claims against such counterparties for actions taken prior to entry into such agreements.

Swvl’s business could be adversely affected by natural disasters, public health crises, political crises, economic downturns, or other unexpected events.

A natural disaster, such as an earthquake, fire, hurricane, tornado or flood, or significant power outage, could disrupt Swvl’s operations, mobile networks, the Internet or the operations of Swvl’s third-party technology providers. In addition, any public health crises, other epidemics, political crises, such as terrorist attacks, war and other political or social instability, or other catastrophic events could adversely affect Swvl’s operations or the economy as a whole. Moreover, the likelihood of such events may increase as a result of climate change or other systemic impacts. The impact of such events or other disruption to Swvl or its third-party providers’ abilities could result in decreased demand for Swvl’s offerings or a disruption in the provision of Swvl’s offerings, which could adversely affect Swvl’s business, financial condition and operating results.

Swvl’s business, financial condition and operating results are also subject to general economic conditions in the markets in which it operates. Any deterioration of economic conditions in such markets could lead to, among other things, increased unemployment and decreased consumer spending and commercial activity. As a result, demand for Swvl’s platform by riders and drivers may decline. Swvl cannot predict the timing or duration of any economic slowdown or subsequent economic recovery in the markets in which it operates or intends to operate. An economic downturn resulting in a prolonged recessionary period may adversely affect Swvl’s business, financial condition and operating results.

 

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Swvl’s operations are subject to currency volatility and inflation risk.

The U.S. dollar is Swvl’s presentation currency as a group. Swvl also derives revenues and incurs expenses in other currencies relevant to each country of operations, including Egyptian pounds, Pakistani rupees, and Kenyan shillings. Swvl is therefore subject to foreign currency exchange fluctuations through both translation risk and transaction risk. As a result, Swvl is exposed to the risk that these currencies may appreciate relative to the U.S. dollar or, if such currencies devalue relative to the dollar, that inflation rates may exceed the speed of devaluation, or that the timing of such depreciation may lag behind inflation. The dollar cost of Swvl’s operations would increase in any such event, and Swvl’s dollar-denominated operating results would be adversely affected.

Risks Related to Regulatory, Legal and Tax Factors Affecting Swvl

Swvl has identified material weaknesses in its internal control over financial reporting. If for any reason Swvl is unable to remediate these material weaknesses and otherwise to maintain proper and effective internal controls over financial reporting in the future, Swvl’s ability to produce accurate and timely consolidated financial statements may be impaired, which may harm Swvl’s operating results, Swvl’s ability to operate its business or investors’ views of Swvl.

Prior to the Business Combination, Swvl operated as a private company with the size of accounting and financial reporting personnel, and other resources with which to address its internal controls over financial reporting, being in line with early-stage private companies. In connection with the preparation of its financial statements as of and for the year ended December 31, 2021, Swvl and its independent registered public accounting firm identified material weaknesses in Swvl’s internal control over financial reporting related to (1) the sufficiency of resources with an appropriate level of technical accounting and SEC reporting experience, (2) a lack of sufficient financial reporting policies and procedures that are commensurate with IFRS and SEC reporting requirements, and (3) the design and operating effectiveness of IT general controls for information systems that are relevant to the preparation of Swvl’s consolidated financial statements.

The Public Company Accounting Oversight Board has defined a material weakness as a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of Swvl’s financial statements will not be prevented or detected on a timely basis.

Swvl has developed and is in the process of implementing a remediation plan to address these control deficiencies, which will address the underlying causes of Swvl’s material weaknesses. As part of Swvl’s remediation plan, Swvl has hired additional qualified personnel within its finance and accounting functions who are experienced in IFRS and SEC reporting, in addition to starting to conduct training for Swvl personnel with respect to IFRS and SEC financial reporting. Swvl is establishing more robust processes to support its internal control over financial reporting, including sufficient financial reporting policies and procedures that are commensurate with IFRS and SEC reporting requirements. Furthermore, with respect to the effectiveness of Swvl’s IT general controls, Swvl is establishing formal processes and controls for information systems that are key to the preparation of its consolidated financial statements, including access and change controls. If these measures are ineffective, Swvl may be unable to remediate these issues in the anticipated timeframe, which may have an adverse effect on Swvl’s operating results, Swvl’s ability to operate its business or investors’ views of Swvl.

While Swvl performed a preliminary evaluation of its internal control over financial reporting, Swvl was not required to perform an evaluation of internal control over financial reporting in accordance with the provisions of the Sarbanes-Oxley Act because Swvl was a private company during the applicable evaluation period ending December 31, 2021. Had such an evaluation been performed, additional control deficiencies may have been identified by Swvl, and those control deficiencies may have also represented one or more material weaknesses.

 

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Uncertainties with respect to the legal systems in the jurisdictions in which Swvl operates, including changes in laws and the adoption and interpretation of new laws and regulations, could adversely affect Swvl’s business, financial condition and operating results.

At present, Swvl conducts the majority of its operations in Egypt, Pakistan and Kenya, but it currently operates in over 20 countries (not including the countries of operation of Zeelo, a company which Swvl announced a definitive agreement to acquire in April 2022). There are, and will likely continue to be, substantial uncertainties regarding the interpretation and application of laws and regulations in the jurisdictions in which Swvl operates, including the laws and regulations governing Swvl’s business, the enforcement and performance of contractual arrangements and the protection of intellectual property rights. The legal systems in the countries in which Swvl operates may not be as predictable or developed as that of the United States, and in particular, may not have developed laws and regulations relating to the ridesharing industry. As a result, existing laws and regulations may be applied inconsistently and, in certain circumstances, it may be difficult to determine what actions or omissions may be deemed to violate applicable laws and regulations. There can be no assurance that Swvl’s business will not be found to violate applicable laws or regulations in these jurisdictions in the future.

In addition, the jurisdictions in which Swvl has business operations may in the future enact new laws and regulations relating to the Internet, emissions and other environmental matters associated with ridesharing operations, the ridesharing industry generally and the operation of Swvl’s business, and the interpretation and enforcement of such laws may involve significant uncertainties. New laws and regulations that affect Swvl’s existing and proposed future businesses may also be applied retroactively.

Swvl is, and may in the future be, required to hold registrations, licenses, permits and approvals in connection with its business operations. New laws and regulations may be adopted from time to time that require Swvl to obtain registrations, licenses, permits and approvals in addition to those Swvl already holds. Swvl does not hold all of the required licenses and registrations for certain jurisdictions where Swvl operates.

In Egypt, Swvl is subject to Law No. 87 of 2018 and the Executive Regulation by Presidential Decree No. 2180 of 2019 (collectively, “Egyptian Ridesharing Laws”). Pursuant to such Egyptian Ridesharing Laws, Swvl – as well as any other land transport service company in Egypt that utilizes information technology – is required to obtain a license issued by Egypt’s Land Transport Regulatory Authority (the “Egyptian LTRA”). While companies were required under the Egyptian Ridesharing Laws to obtain such licenses by December 12, 2018, the Egyptian LTRA was not established until June 11, 2019, and, to Swvl’s knowledge, it has not yet issued a license to any ridesharing company, including Swvl. On December 12, 2019, Swvl submitted an application to the Egyptian LTRA, seeking the required license. If and when the Egyptian LTRA approves Swvl’s license application, Swvl will be required to pay a licensing fee, which will include a fee associated with the application process and a fee for Swvl’s pre-license operations in Egypt. As a result of Swvl’s current non-compliance with the licensing requirements of the Egyptian Ridesharing Laws, the Egyptian LTRA has imposed monetary fines on drivers using Swvl’s platform, which Swvl expects will continue to be imposed until Swvl’s license application is approved. Swvl has reimbursed, and expects to continue to reimburse, drivers for the costs of such fines, which totaled approximately $190 thousand, $440 thousand and $700 thousand during the years ended December 31, 2019, December 31, 2020 and December 31, 2021, respectively.

In Jordan, Swvl is operating a pilot business-to-consumer program. Although Swvl has been working with relevant authorities to obtain a license in order to run its business-to-consumer platform at a larger commercial scale, the Land Transport Regulatory Commission (the “LTRC”) of Jordan is currently not accepting any license applications, and, as a result, we cannot predict if or when the LTRC license will be obtained.

Other than ordinary course business permits generally applicable to companies operating in each particular jurisdiction and regulations pertaining to foreign investment (described in further detail below), Swvl does not believe it is required to obtain any other registrations, licenses, permits or approvals to conduct its business as presently conducted in each of the other jurisdictions in which it operates. Swvl further believes that it possesses

 

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all such business permits, the failure of which to possess would be material to Swvl’s operations as presently conducted in the jurisdictions in which it operates. However, as regulation of the ridesharing industry in these jurisdictions remains under development, new laws and regulations may be adopted or implemented that could increase or otherwise change the requirements applicable to Swvl. In addition, regulators may interpret existing laws and regulations that were not intended to apply to ridesharing businesses to apply to Swvl or its operations. Further, Swvl may expand its operations in the jurisdictions in which it operates in ways that would require additional licenses. In particular, if Swvl were to expand its operations in Saudi Arabia or Malaysia to include business-to-consumer services, which is under evaluation, Swvl would be required to obtain licenses in such jurisdictions. If Swvl fails to obtain any required registrations, licenses, permits or approvals or is otherwise found to be operating its business in a manner that is not compliant with applicable law, Swvl may be subject to fines, revocation of its licenses and permits or other sanctions or be required to discontinue or restrict Swvl’s operations in such jurisdictions. Any such required registrations, licensees, permits and approvals may be difficult for Swvl to obtain. Swvl cannot predict the effect that the interpretation of existing or new laws or regulations may have on Swvl’s business.

In addition, governments in the jurisdictions Swvl operates or intends to operate may restrict or control to varying degrees the ability of foreign investors to invest in businesses located or operating in such jurisdictions. Because Swvl is incorporated in the British Virgin Islands, Swvl may be deemed to be foreign investors and therefore be subject to such restrictions or controls. As a result, there may be a risk of loss due to, among other things, expropriation, nationalization or confiscation of assets or the imposition of restrictions on repatriation of capital invested, in each case by the governmental or regulatory agencies empowered in such jurisdictions. While, in some cases, the British Virgin Islands has entered into international investment treaties or agreements designed to encourage and protect investment by BVI persons in foreign jurisdictions, there can be no guarantee that such treaties or agreements will cover the jurisdictions in which Swvl operates in or that such treaties or agreements will be fully implemented or effective. In other cases, Swvl is not able to take advantage of certain treaties because it is a British Virgin Islands company and is therefore exposed to additional risk of such loss.

While Swvl is not aware of any material limitations on foreign investment in the jurisdictions in which it operates, Swvl is required to comply with certain regulations related to such investment. In particular, in Jordan, non-Jordanian investors are restricted from wholly owning any project or business venture that involves certain trade, construction or services activities. While Swvl does not intend to engage in any such activities in Jordan, the organizational documents of the entity that currently conducts Swvl’s operations in Jordan erroneously includes certain restricted activities as potential objectives of such entity. Such entity is in the process of amending its organizational documents such that Swvl will be permitted to acquire and hold all of the equity thereof. In addition, in the United Arab Emirates, foreign investors are required to operate via an onshore licensed entity or an onshore branch of a foreign or free zone entity. Swvl has established such an onshore branch and has obtained the requisite licenses and approvals for such branch’s operations. Swvl may become subject to additional limitations and regulations as it expands its operations in the jurisdictions in which it operates and into new jurisdictions, and such limitations and regulations may impair Swvl’s ability to operate effectively in such jurisdictions.

Any of the foregoing or similar occurrences or developments could significantly disrupt Swvl’s business operations and restrict Swvl from conducting a substantial portion of its business operations in these jurisdictions, which could adversely affect Swvl’s business, financial condition or operating results.

As Swvl expands its offerings, it may become subject to additional laws and regulations, and any actual or perceived failure by Swvl to comply with such laws and regulations or manage the increased costs associated with such laws and regulations could adversely affect Swvl’s business, financial condition, and operating results.

As Swvl continues to expand its offerings and user base, it may become subject to additional laws and regulations, which may differ or conflict from one jurisdiction to another. Many of these laws and regulations

 

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were adopted prior to the advent of Swvl’s industry and related technologies and, as a result, do not contemplate or address the unique issues faced by Swvl’s industry.

Despite Swvl’s efforts to comply with applicable laws, regulations and other obligations relating to its offerings, it is possible that Swvl’s practices, offerings or platform could be inconsistent with, or fail or be alleged to fail to meet all requirements of, such laws, regulations or obligations. Swvl’s failure to comply with such laws, regulations or obligations may result in Swvl being blocked from or limited in providing or operating its products and offerings in such jurisdictions, or it may be required to modify its business model in those or other jurisdictions as a result. Moreover, Swvl’s failure, or the failure by Swvl’s third-party service providers, to comply with applicable laws or regulations or any other obligations relating to Swvl’s offerings, could harm Swvl’s reputation and brand, discourage new and existing drivers and riders from using Swvl’s platform, lead to refunds of rider fares or result in fines or proceedings by governmental agencies or private claims and litigation, any of which could adversely affect Swvl’s business, financial condition and operating results.

Swvl is subject to various laws relating to anti-corruption, anti-bribery, anti-money laundering, and countering the financing of terrorism and has operations in certain countries known to experience high levels of corruption. Swvl has not implemented, or has only recently implemented, certain policies and procedures for the operation of its business and compliance with applicable laws and regulations, including policies with respect to anti-bribery and anti-corruption matters and cyber protection.

Swvl is subject to anti-corruption, anti-bribery, and anti-money laundering and countering the financing of terrorism laws in the jurisdictions in which Swvl does business. Swvl will be subject to such laws in other jurisdictions in the future, including, for example, the FCPA. These laws generally prohibit Swvl, its employees and agents from improperly influencing government officials or commercial parties to, among other things, obtain or retain business, direct business to any person, or gain any improper advantage. Under applicable anti-bribery and anti-corruption laws, Swvl could be held liable for acts of corruption and bribery committed by third-party business partners and service providers, representatives, and agents who acted on Swvl’s behalf.

Swvl has operations in, and has business relationships with, entities in countries known to experience high levels of corruption. Swvl and its third-party business partners, representatives, and agents may have direct or indirect interactions with officials and employees of government agencies or state-owned or affiliated entities. Swvl is subject to the risk that it could be held liable for the corrupt or other illegal activities of these third-party business partners and intermediaries and its and their respective employees, representatives, contractors, and agents, even if Swvl does not authorize such activities. Swvl’s employees from time to time consult or engage in discussions with government officials in the jurisdictions where it operates with respect to potential changes in government policies or laws relating to the mass transit ridesharing industry, which may heighten such anti-corruption-related risks.

In addition, Swvl’s activities in certain countries with high levels of corruption enhance the risk of unauthorized payments or offers of payments by business partners and service providers, employees, or consultants in violation of various anti-corruption laws, including the FCPA, even though the actions of these parties are often outside Swvl’s control. Swvl adopted anti-bribery and anti-corruption policies in September 2020, enhanced its policies in December 2021 and implementation of these policies is ongoing. While these policies are intended to address compliance with such laws, there can be no guarantee that they are or will be fully effective at all times, and Swvl’s employees and agents may take actions in violation of Swvl’s anti-bribery and anti-corruption policies or applicable laws, for which Swvl may be ultimately held responsible. Swvl in the process of reviewing its compliance program to identify areas for enhancements, and Swvl intends to continuously update and improve its compliance program as it expands its operations into new jurisdictions and becomes subject to a larger number of anti-corruption-related laws. However, there remains no guarantee that any such expanded compliance program will be fully effective at all times.

 

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Any violation of applicable anti-bribery, anti-corruption, anti-money laundering, and countering the financing of terrorism laws could result in whistleblower complaints, adverse media coverage, harm to Swvl’s reputation and brand, investigations, imposition of significant legal fees, severe criminal or civil sanctions and disgorgement of profits, suspension or loss of required licenses and permits, exit from an important market, substantial diversion of management’s attention, a drop in Swvl’s share price, or other adverse consequences, any or all of which could have a material and adverse effect on Swvl’s business, financial condition and operating results.

Swvl may be subject to claims, lawsuits, government investigations and other proceedings that adversely affect Swvl’s business, financial condition and operating results.

Swvl has been subject to claims, lawsuits, government investigations and other legal and regulatory proceedings in the ordinary course of business, including those involving labor and employment, commercial disputes and tax matters. Swvl expects to continue to be subject to claims, lawsuits, government investigations and other legal or regulatory proceedings in the ordinary course of business, which may involve any of the foregoing matters as well as licensing and permits, pricing practices, competition, consumer complaints, personal injury, anti-discrimination, intellectual property disputes and other matters, and Swvl may become subject to additional types of claims, lawsuits, government investigations and other legal or regulatory proceedings as Swvl’s business grows and as Swvl deploys new offerings. Moreover, certain liabilities may be imposed by jurisdictions where Swvl operates, including tax liability, which may subject it to regulatory enforcement procedures if it does not or cannot comply.

The results of any such claims, lawsuits, government investigations or other legal or regulatory proceedings cannot be predicted. Any claims against Swvl, whether meritorious or not, could be time-consuming, result in costly litigation, harm Swvl’s reputation, require significant management attention and divert substantial resources. It is possible that a resolution of such proceedings could result in substantial damages, settlement costs, fines and penalties that could adversely affect Swvl’s business, financial condition and operating results. These proceedings could also result in harm to Swvl’s reputation and brand, sanctions, injunctions or other orders requiring a change in Swvl’s business practices. Any of these consequences could adversely affect Swvl’s business, financial condition and operating results. Furthermore, under certain circumstances, Swvl has contractual and other legal obligations to indemnify and to incur legal expenses on behalf of Swvl’s business and commercial partners.

A determination in, or settlement of, any legal proceeding, whether Swvl is a party to such legal proceeding or not, that involves Swvl’s industry could harm Swvl’s business, financial condition and operating results. For example, a determination that classifies a driver of a ridesharing platform as an employee, whether Swvl is a party to such determination or not, could cause Swvl to incur significant expenses or require substantial changes to its business model.

In addition, Swvl regularly includes arbitration provisions in Swvl’s Terms of Service with drivers and riders using Swvl’s platform. These provisions are intended to streamline the dispute resolution process for all parties involved, as arbitration can, in some cases, be faster and less costly than litigating disputes in court. However, arbitration may become more expensive, or the volume of arbitration may increase and become burdensome. The use of arbitration provisions may subject Swvl to certain risks to its reputation and brand, as these provisions have been the subject of increasing public scrutiny in certain jurisdictions.

Further, with the potential for conflicting rules regarding the scope and enforceability of arbitration across the jurisdictions in which Swvl operates and may operate in the future, there is a risk that some or all of Swvl’s arbitration provisions could be subject to challenge or may need to be revised to exempt certain categories of protection. If Swvl’s arbitration agreements were found to be unenforceable, in whole or in part, or particular claims are required to be exempted from arbitration, Swvl could experience an increase in its costs to litigate disputes and the time involved in resolving such disputes, and Swvl could face increased exposure to potentially costly lawsuits, each of which could adversely affect Swvl’s business, financial condition and operating results.

 

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Failure to protect or enforce Swvl’s intellectual property rights could harm Swvl’s business, financial condition and operating results.

Swvl’s success is dependent in part upon protecting Swvl’s intellectual property rights and technology (such as code, confidential information, data, processes and other forms of information, knowhow and technology). As Swvl grows, it will continue to develop intellectual property that is important for its existing or future business. Swvl relies on a combination of copyright, trademark, service mark, trade secret, know-how and confidential information laws and contractual restrictions to establish and protect Swvl’s intellectual property. However, the steps Swvl takes to protect its intellectual property may not be sufficient and may vary by jurisdiction.

Even if Swvl does detect violations, Swvl may need to engage in litigation to enforce its rights. Any enforcement efforts Swvl undertakes, including litigation, could be time-consuming and expensive and could divert the attention of management. While Swvl takes precautions designed to protect its intellectual property, it may still be possible for competitors and other unauthorized third parties to copy Swvl’s technology, reverse engineer its data and use its proprietary information to create or enhance competing solutions and services, which could adversely affect Swvl’s position in the rapidly evolving and increasingly competitive mass-transit ridesharing industry.

Swvl has not registered any of its intellectual property outside of Egypt. Swvl’s failure to register its brand names or logos in jurisdictions in which it operates could allow competitors to register the same or similar names or logos that confuse potential consumers and/or prevent Swvl from subsequently protecting its names and logos. Some license provisions that protect against unauthorized use, copying, transfer and disclosure of Swvl’s technology may be unenforceable under the laws of certain countries. The laws of some countries do not provide the same level of protection of intellectual property as the laws of the United States, and adequate intellectual property protection may not be available or may be limited in such countries. Swvl’s intellectual property protection and enforcement strategy is influenced by many considerations, including costs, where Swvl has business operations, where Swvl might have business operations in the future, legal protections available in a specific jurisdiction and/or other strategic considerations. As such, Swvl does not have identical or analogous intellectual property protection in all jurisdictions, which could limit Swvl’s freedom to operate as it expands into new jurisdictions. As Swvl expands its offerings into new jurisdictions, its exposure to unauthorized use, copying, transfer and disclosure of proprietary information will likely increase. Swvl may need to expend additional resources to protect, enforce or defend its intellectual property, which could harm Swvl’s business, financial condition or operating results. Swvl may also need to expend additional resources to understand and analyze the varying protections available in different jurisdictions and whether formal protection for intellectual property, such as rights in software, is available, commercially advisable and/or enforceable.

Swvl enters into confidentiality and intellectual property assignment agreements with employees and contractors and enters into confidentiality agreements with third-party providers and corporate customers. There can be no assurance that these agreements will effectively control access to, and use and distribution of, Swvl’s platform and proprietary information. Further, these agreements do not prevent Swvl’s competitors from independently developing technologies that are substantially equivalent or superior to Swvl’s offerings. Competitors and other third parties may also attempt to reverse engineer Swvl’s data, which would compromise Swvl’s trade secrets and other rights.

Swvl may be required to spend significant resources monitoring and protecting its intellectual property rights, and some violations may be difficult or nearly impossible to detect. Litigation to defend and enforce Swvl’s intellectual property rights could be costly, time-consuming and distracting to management and could result in the impairment or loss of portions of Swvl’s intellectual property. Swvl’s efforts to enforce its intellectual property rights may be met with defenses, counterclaims and countersuits attacking the validity and enforceability of Swvl’s intellectual property rights. Swvl’s inability to protect its intellectual property and proprietary technology against unauthorized copying or use, as well as any costly litigation or diversion of Swvl’s management’s attention and resources, could impair the functionality of Swvl’s platform, delay

 

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introductions of enhancements to Swvl’s platform, result in Swvl substituting inferior or more costly technologies into its platform or harm Swvl’s reputation or brand. In addition, Swvl may be required to license additional technology from third parties to develop and market new offerings or platform features, which may not be on commercially reasonable terms and could adversely affect Swvl’s ability to compete.

The ridesharing industry has also been subject to attempts to steal intellectual property. Although Swvl takes measures to protect its property, if it is unable to prevent the theft of its intellectual property or its exploitation, the value of Swvl’s investments may be undermined and Swvl’s business, financial condition and operating results may be negatively impacted.

Claims by others that Swvl infringed their proprietary technology or other intellectual property rights could harm Swvl’s business, financial condition and operating results.

Companies in the Internet and technology industries are frequently subject to litigation based on allegations of infringement or other violations of intellectual property rights. In addition, certain companies and rights holders seek to enforce and monetize patents or other intellectual property rights they own or otherwise obtained. As Swvl’s public profile grows and the number of competitors in Swvl’s markets increases, and as Swvl continues to develop new technologies and intellectual property, the possibility of intellectual property rights claims against Swvl may grow. From time to time, third parties may assert claims of infringement of intellectual property rights against Swvl. Swvl does not hold any patents. Competitors of Swvl and others may now and in the future have significantly larger and more mature patent portfolios than Swvl has. In addition, future litigation may involve patent holding companies or other adverse patent owners who have no relevant product or service revenue and against whom Swvl’s own patents (if and when acquired) may therefore provide little or no deterrence or protection. Many potential litigants, including some of Swvl’s competitors and patent-holding companies, have the ability to dedicate substantial resources to assert their intellectual property rights. Any claim of infringement by a third-party, even those without merit, could cause Swvl to incur substantial costs defending against such claim, could distract management’s attention from the operation of Swvl’s business and could require Swvl to cease its use of certain intellectual property. Furthermore, because intellectual property litigation may involve a substantial amount of discovery, Swvl may risk compromising its own confidential information in the course of any such litigation. Swvl may be required to pay substantial damages, royalties or other fees in connection with a claimant securing a judgment against Swvl, Swvl may be subject to an injunction or other restrictions that prevent Swvl from using or distributing its intellectual property, or Swvl may agree to a settlement that prevents it from distributing its offerings or a portion thereof, which could adversely affect Swvl’s business, financial condition and operating results.

With respect to any intellectual property rights claim, Swvl may have to seek out a license to continue operations if found to be in violation of such rights, which may not be available on favorable or commercially reasonable terms and may significantly increase Swvl’s operating expenses. Some licenses may be non-exclusive, and therefore Swvl’s competitors may have access to the same technology licensed to Swvl. If a third-party does not offer Swvl a license to its intellectual property on reasonable terms, or at all, Swvl may be required to develop alternative, non-infringing technology or other intellectual property, which could require significant time (during which Swvl would be unable to continue to offer Swvl’s affected offerings), effort and expense and may ultimately not be successful. Any of these events could adversely affect Swvl’s business, financial condition and operating results.

Changes in laws or regulations relating to privacy, data protection or the protection or transfer of personal data, or any actual or perceived failure by Swvl to comply with such laws and regulations or any other obligations relating to privacy, data protection or the protection or transfer of personal data, could adversely affect Swvl’s business.

Swvl receives, transmits and stores a large volume of personally identifiable information and other data relating to the users of Swvl’s platform. Numerous national and international laws, rules and regulations

 

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applicable to the jurisdictions in which Swvl operates relate to privacy, data protection and the collection, storing, sharing, use, disclosure and protection of certain types of data. These laws, rules and regulations evolve frequently and their scope may continually change, through new legislation, amendments to existing legislation and changes in enforcement, and may be inconsistent from one jurisdiction to another and may conflict with each other. For example, changes in laws or regulations relating to privacy, data protection and information security, particularly any new or modified laws or regulations that require enhanced protection of certain types of data or new obligations with regard to data retention, transfer or disclosure, could greatly increase the cost of providing Swvl’s offerings, require significant changes to Swvl’s operations or even prevent Swvl from providing certain offerings in jurisdictions in which it currently operates and in which it may operate in the future. Further, as Swvl continues to expand its platform offerings and user base, Swvl may become subject to additional privacy-related laws and regulations, such as the General Data Protection Regulation (Regulation (EU) 2016/679), which Swvl recently became subject to (please see the section entitled “Risks Related to Regulatory, Legal and Tax Factors Affecting Swvl”). Additionally, Swvl has incurred, and expects to continue to incur, expenses in an effort to comply with privacy, data protection and information security standards and protocols imposed by law, regulation, industry standards or contractual obligations.

Despite Swvl’s efforts to comply with applicable laws, regulations and other obligations relating to privacy, data protection and information security, it is possible that Swvl’s practices, offerings or platform could be inconsistent with, or fail or be alleged to fail to meet all requirements of, such laws, regulations or obligations. Swvl’s failure, or the failure by Swvl’s third-party providers or partners, to comply with applicable laws or regulations or any other obligations relating to privacy, data protection or information security, or any compromise of security that results in unauthorized access to, or use or release of personally identifiable information or other driver or rider data, or the perception that any of the foregoing types of failure or compromise has occurred, could damage Swvl’s reputation, discourage new and existing drivers and riders from using Swvl’s platform or result in fines or proceedings by governmental agencies and private claims and litigation, any of which could adversely affect Swvl’s business, financial condition and operating results. Even if not subject to legal challenge, the perception of privacy concerns, whether or not valid, may harm Swvl’s reputation and brand and adversely affect Swvl’s business, financial condition and operating results.

Swvl may face particular privacy, data security, and data protection risks if it expands into the European Union or United Kingdom in connection with the GDPR and other data protection regulations.

Upon the consummation of Swvl’s acquisition of a controlling interest in Shotl, Swvl began operating in certain European Union (“EU”) member states and the United Kingdom Swvl’s operations in the United Kingdom will be expanded upon consummation of Swvl’s acquisition of Zeelo. Similarly, upon consummation of Swvl’s acquisition of Volt Lines, Swvl began operating in the Netherlands. Expansion into the EU and the United Kingdom or marketing directed to those jurisdictions subjects Swvl and certain personal data it processes to the General Data Protection Regulation (Regulation (EU) 2016/679) (“GDPR”), supplemented by national laws and further implemented through binding guidance from the European Data Protection Board, which regulates the collection, control, sharing, disclosure, use and other processing of personal data and imposes stringent data protection requirements with significant penalties, and the risk of civil litigation, for noncompliance.

As a result of the Shotl acquisition, Swvl is also subject to the U.K. General Data Protection Regulation (“U.K. GDPR”) (i.e., a version of the GDPR as implemented into U.K. law). Among other requirements, the GDPR regulates transfers of personal data subject to the GDPR to third countries that have not been found to provide adequate protection to such personal data, including the United States. The enactment of the GDPR also introduced numerous privacy-related changes for companies operating in the EU, including greater control for data subjects (including, for example, the “right to be forgotten”), increased data portability for EU consumers, data breach notification requirements, and increased fines. The GDPR requirements likely apply not only to third-party transactions, but also to transfers of information between Swvl and its subsidiaries, including employee information.

 

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As of January 2021 (when the transitional period following Brexit expired), there are two parallel regimes with potentially divergent interpretations and enforcement actions for certain violations. The European Commission adopted an adequacy decision for the U.K., which means that certain aspects of data protection law between the U.K. and EU will remain the same. However, because the U.K.’s Information Commissioner’s Office remains the independent supervisory body regarding the U.K. GDPR but will not be the regulator for any activities under the GDPR, there may be increasing divergence in application, interpretation and enforcement of the data protection law as between the U.K. and the European Economic Area.

As of the date of this prospectus, Swvl is in the process of bringing all of its operations (legacy and post-Shotl acquisition) into compliance with the GDPR. However, Swvl’s efforts to bring all of its practices (or those of its collaborators, service providers, and contractors) into compliance with the GDPR may not succeed for a variety of reasons, including due to internal or external factors such as resource allocation limitations or a lack of vendor cooperation. Noncompliance could result in the commencement of legal proceedings against Swvl by governmental and regulatory entities or others. Any inability to adequately address data privacy or security-related concerns, even if unfounded, or to comply with the GDPR or other applicable laws, regulations, standards and other obligations relating to data privacy and security, could result in litigation, breach notification obligations, regulatory or administrative sanctions, additional cost and liability to Swvl, harm to Swvl’s reputation and brand, damage to its relationships with riders, drivers and corporate customers and have an adverse effect on its business, financial condition and operating results. In particular, under the GDPR, fines of up to €20 million or up to 4% of the annual global revenue of the non-compliant company, whichever is greater, could be imposed for violations of certain of the GDPR’s requirements. Such penalties are in addition to any civil litigation claims by customers and data subjects.

Swvl’s business would be adversely affected if the drivers using its platform were classified as employees.

The classification status of drivers that operate on ridesharing platforms is the subject of ongoing litigation and debate in multiple countries. Certain global ridesharing businesses are currently involved in legal proceedings in multiple jurisdictions, including putative class and collective action lawsuits, charges and claims before administrative agencies, and investigations or audits by labor, social security, and tax authorities, that claim that drivers using their platforms should be treated as employees (or as workers or quasi-employees where those statuses exist) of such companies, rather than as independent contractors.

Swvl classifies the drivers that use its platform as independent contractors or as employees of third parties in certain of the jurisdictions in which Swvl currently operates. However, in certain of the jurisdictions that Swvl operates, such classifications are based on an interpretation of applicable law, and Swvl’s interpretation may be subject to challenge. In particular, in Egypt, as the Egyptian Ridesharing Laws do not require drivers to be classified as employees, any challenge to Swvl’s determination that drivers are not employees would need to be based on principles of Egyptian labor laws. Under such laws, a person is classified as an employee if he or she works in exchange for a salary for an employer and under the employer’s control and supervision. Thus, in assessing whether drivers should be classified as employees in Egypt, Swvl considers, among other things, the level of direct administration and supervision it has over drivers using its platform.

Similarly, in Pakistan, there is no rigid formula or exhaustive list of criteria for determining whether drivers are employees. Instead, courts in Pakistan have articulated general principles and tests for establishing an employer-employee relationship, including whether the supposed employer has a role in the selection and appointment of, and controls and supervises the work of, the supposed employees. Thus, the proper classification has to be ascertained on a case-by-case basis, and courts will take into consideration the facts and circumstances of the engagement. As a result, Swvl itself considers all relevant facts and circumstances, including the level of direct control it exercises over drivers using its platform, in making its determination that such drivers are not employees.

 

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While Swvl believes its classification of drivers as independent contractors in each of the jurisdictions it operates, including in Egypt and Pakistan, is correct, Swvl may in the future be subject to proceedings relating to the classification of drivers using its platform as laws and regulations governing the ridesharing industry, labor and employment develop further (or if interpretations of existing laws and regulations change) and as Swvl expands its business operations in new jurisdictions. Swvl may incur substantial expenses in defending such proceedings. If Swvl is not successful in defending such proceedings, it may be required to pay significant damages to drivers or incur other fines, penalties or sanctions. In addition, if, as a result of legislation or judicial decisions in jurisdictions where the employee-contractor distinction is applicable, Swvl is required to classify drivers as employees in such jurisdictions, Swvl may incur significant additional expenses for compensating drivers or making payments on their behalf, including expenses associated with the application of, as applicable, wage and hour laws (including minimum wage, overtime, and meal and rest period requirements), employee benefits, social security contributions, taxes (direct and indirect), and potential penalties. In such event, Swvl may be required to increase its pricing to offset these additional expenses or to discontinue lower-margin offerings or routes, abandon its efforts to expand into new markets or forego other expenditures, such as marketing or hiring key personnel. As a result, Swvl’s ability to attract new riders and to retain existing riders could be adversely affected and utilization of Swvl’s platform may decrease. Any of the foregoing risks would have an adverse effect on Swvl’s business, financial condition and operating results.

Swvl could be subject to claims from riders, drivers or third parties that are harmed whether or not Swvl’s platform is in use, which could adversely affect Swvl’s brand, business, financial condition and operating results.

Swvl may be subject to claims, lawsuits, investigations and other legal proceedings relating to injuries to, or deaths of, riders, drivers or third-parties that may be attributed to Swvl through its offerings. Swvl may also be subject to claims alleging that Swvl is directly or vicariously liable for the acts of the drivers using its platform or for harm related to the actions of drivers, riders, or third parties, or the management and safety of its platform and assets, including in light of the COVID-19 pandemic and related public health measures issued by various jurisdictions, including travel bans, restrictions, social distancing guidance, and shelter-in-place orders. Swvl may also be subject to personal injury claims whether or not such injury actually occurred as a result of activity on its platform. Swvl may incur expenses to settle personal injury claims, which it may choose to settle for reasons including expediency, protection of its reputation and to prevent the uncertainty of litigating, and Swvl expects that such expenses may increase as its business grows and it faces increasing public scrutiny. Regardless of the outcome of any legal proceeding, any injuries to, or deaths of, any riders, drivers or third parties could result in negative publicity and harm to Swvl’s brand, reputation, business, financial condition and operating results. Swvl’s insurance policies and programs may not provide sufficient coverage to adequately mitigate the potential liability Swvl faces, especially where any one incident, or a group of incidents, could cause disproportionate harm, and Swvl may have to pay high premiums or deductibles for its coverage and, for certain situations, Swvl may not be able to secure coverage at all. Any of the foregoing risks could adversely affect Swvl’s business, financial condition and operating results.

Swvl is subject to changing laws and regulations regarding regulatory matters, corporate governance and public disclosure that have increased, and are likely to continue to increase, both its costs and the risk of non-compliance.

Swvl is subject to rules and regulations by various governing bodies, including, for example, the SEC, which are charged with the protection of investors and the oversight of companies whose securities are publicly traded, and to new and evolving regulatory measures under applicable law, including the laws of the BVI and the various countries and cities in which it operates. Swvl’s efforts to comply with new and changing laws and regulations in the jurisdictions in which it operates have resulted in and are likely to continue to result in, increased general and administrative expenses and a diversion of management time and attention from revenue-generating activities to compliance activities.

 

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Moreover, because these laws, regulations and standards are subject to varying interpretations and changes due to the emerging nature of the markets in which Swvl operates, their application in practice may evolve over time as new guidance becomes available. This evolution may result in continuing uncertainty regarding compliance matters and additional costs necessitated by ongoing revisions to Swvl’s disclosure and governance practices. If Swvl fails to address and comply with these regulations and any subsequent changes, they may be subject to penalty and the business may be harmed.

As a result of plans to expand Swvl’s business operations, including to jurisdictions in which tax laws may not be favorable, Swvl’s obligations may change or fluctuate, become significantly more complex or become subject to greater risk of examination by taxing authorities, any of which could adversely affect Swvl’s after-tax profitability and financial results.

Because Swvl has significant expansion plans, Swvl’s effective tax rate may fluctuate or increase in the future. Future effective tax rates could be affected, possibly materially, by changes in tax laws or the regulatory environment, the recognition of operating losses in jurisdictions where no tax benefit can be recorded under the applicable method of accounting, changes in the composition of operating income across tax jurisdictions, changes in deferred tax assets and liabilities, or changes in accounting and tax standards or practices.

Due to the complexity of multinational tax obligations and filings, Swvl may have a heightened risk related to audits or examinations by the relevant taxing authorities. Outcomes from these audits or examinations could have an adverse effect on Swvl’s after-tax profitability and financial condition. Additionally, various taxing authorities have increasingly focused attention on intercompany transfer pricing with respect to sales of products and services and the use of intangibles. Taxing authorities could disagree with Swvl’s intercompany charges, cross-jurisdictional transfer pricing or other matters and assess additional taxes. If Swvl does not prevail in any such disagreements, its profitability may be affected.

Swvl’s after-tax profitability and financial results may also be adversely affected by changes in the relevant tax laws and tax rates, treaties, regulations, administrative practices and principles, judicial decisions and interpretations thereof, in each case, possibly with retroactive effect.

The Competition Commission of Pakistan (the “CCP”) may challenge the Business Combination or seek financial penalties or behavioral or other remedies, any of which could result in a material adverse effect on Swvl’s business.

SPAC, with the consent of Swvl, initially filed an application with the CCP on January 17, 2022 (the “Application”) for approval to consummate the Business Combination. Approval of the Application by the CCP was a closing condition in the Business Combination Agreement. However, approval of the Application by the CCP was not obtained prior to the vote of the SPAC shareholders. Accordingly, because the SPAC and Swvl did not believe that the Business Combination raised substantive competition considerations in Pakistan, nor did they believe that waiving the related closing condition was likely to result in material adverse consequences, Swvl and SPAC waived this closing condition and, following the satisfaction of all other closing conditions, proceeded with the consummation of the Business Combination.

Swvl continues to believe that the Business Combination does not raise substantive competition considerations in Pakistan, nor does it believe that waiving this closing condition and proceeding with consummation of the Business Combination is likely to result in material adverse consequences. However, there can be no assurance that the CCP will not choose to challenge the Business Combination and/or seek financial penalties or behavioral or other remedies, any of which could result in a material adverse effect on Swvl’s business.

 

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Risks Related to Ownership of Swvl’s Class A Ordinary Shares

Swvl may not be able to maintain the listing of its Class A Ordinary Shares on Nasdaq.

Our Class A Ordinary Shares are listed on Nasdaq. If we violate Nasdaq listing requirements, our Class A Ordinary Shares may be delisted. If we fail to meet any of Nasdaq’s listing standards, our Class A Ordinary Shares may be delisted. In addition, the Board may determine that the cost of maintaining the listing on a national securities exchange outweighs the benefits of such listing. A delisting of our Class A Ordinary Shares may materially impair shareholders’ ability to buy and sell our Class A Ordinary Shares and could have an adverse effect on the market price of, and the efficiency of the trading market for, our Class A Ordinary Shares. The delisting of our Class A Ordinary Shares could significantly impair our ability to raise capital and the value of your investment.

The market price of Swvl Class A Ordinary Shares could fluctuate significantly, which could result in substantial losses for purchasers of Swvl Class A Ordinary Shares.

The market price of Swvl Class A Ordinary Shares is affected by the supply and demand for such shares, which may be influenced by numerous factors, many of which are beyond Swvl’s control, including:

 

   

fluctuation in actual or projected operating results;

 

   

failure to meet analysts’ earnings expectations;

 

   

the absence of analyst coverage;

 

   

negative analyst recommendations;

 

   

changes in trading volumes in Swvl Securities;

 

   

changes in Swvl’s shareholder structure;

 

   

changes in macroeconomic conditions;

 

   

the activities of competitors;

 

   

changes in the market valuations of comparable companies;

 

   

changes in investor and analyst perception with respect to Swvl’s business or the mass-transit ridesharing industry in general; and

 

   

changes in the statutory framework applicable to Swvl’s business.

As a result, the market price of Swvl Class A Ordinary Shares may be subject to substantial fluctuation.

In addition, general market conditions and fluctuation of share prices and trading volumes could lead to pressure on the market price of Swvl Class A Ordinary Shares, even if there may not be a reason for this based on Swvl’s business performance or earnings outlook. Furthermore, investors in the secondary market may view Swvl’s business more critically than prior or current investors, which could adversely affect the market price of Swvl Class A Ordinary Shares in the secondary market.

If the market price of Swvl Class A Ordinary Shares declines as a result of the realization of any of these or other risks, investors could lose part or all of their investment in Swvl Class A Ordinary Shares.

Additionally, in the past, when the market price of a stock has been volatile, holders of that stock have sometimes instituted securities class action litigation against the company that issued the shares. If any of Swvl’s shareholders brought a lawsuit against Swvl, Swvl could incur substantial costs defending the lawsuit. Such a lawsuit could also divert the time and attention of management from the business, which could significantly harm Swvl’s business, financial condition and operating results.

 

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The securities being offered in this prospectus represent a substantial percentage of our outstanding Class A Ordinary Shares, and the sales of such securities, together with the sale of the Class A Ordinary Shares and Warrants being offered for resale in the Additional Prospectus, or the perception that these sales could occur, could cause the market price of our Class A Ordinary Shares to decline significantly.

This prospectus relates to the offer and sale from time to time by the Selling Securityholder of up to 102,939,766 Class A Ordinary Shares, which represent (a) 386,971 Commitment Shares that we issued to the Selling Securityholder pursuant to the Purchase Agreement in consideration of its commitment to purchase shares of Class A Ordinary Shares at our election under the Purchase Agreement and (b) 102,552,795 Purchase Shares we may elect in our sole discretion to issue and sell to the Selling Securityholder under the Purchase Agreement from time to time after the Commencement Date. Assuming the issuance of all of the Resale Securities to the Selling Securityholder under the Purchase Agreement, the Resale Securities would represent approximately 46% of the then-outstanding Class A Ordinary Shares (assuming the Class A Ordinary Shares issuable upon the achievement of certain stock price thresholds pursuant to the Business Combination are not outstanding, or 43% assuming they are outstanding).

In addition to this prospectus, we have filed the Additional Prospectus that relates to the offer and sale from time to time by the Additional Sellers of (a) 87,379,534 Class A Ordinary Shares, which includes up to 9,010,567 Class A Ordinary Shares issuable to certain former stockholders of Legacy Swvl as earnout consideration (valued as $10.00 per share at the time of the Business Combination) upon the achievement of certain stock price thresholds for our Class A Ordinary Shares and (b) 5,933,333 Private Placement Warrants, originally issued in a private placement at a cash price of $1.50 per warrant. The Class A Ordinary Shares described in clause (a) of the prior sentence include (i) 3,966,400 Class A Ordinary Shares issued to the PIPE Investors at a cash price of $10.00 per share, (ii) 8,222,311 Class A Ordinary Shares issued to certain PIPE Investors who effectively pre-funded Swvl with the Swvl Exchangeable Notes at an exchange rate of $8.50 per share, $9.10 per share or $9.50 per share, (iii) 8,625,000 Class A Ordinary Shares issued to the Sponsor at a cash price of $0.003 per share and (iv) 57,555,256 Class A Ordinary Shares issued to the Additional Sellers who were former equityholders of Legacy Swvl as equity merger consideration pursuant to the Business Combination at an equity consideration value of $10.00 per share. The Additional Prospectus also relates to the issuance by us of up to (i) 11,500,000 Class A Ordinary Shares issuable upon exercise of the Public Warrants, which warrants were previously registered and originally issued in the initial public offering of units of SPAC at a price of $10.00 per unit with each unit consisting of one Class A Ordinary Share and one-third of one warrant and (ii) 5,933,333 Class A Ordinary Shares issuable upon exercise of the Private Placement Warrants.

As of the date of this prospectus, the price at which our Class A Ordinary Shares trade is lower than the initial trading price of the shares sold pursuant to the initial public offering of Queen’s Gambit Growth Capital. Despite the differences in the trading price of our securities and the initial trading price of the securities of Queen’s Gambit Growth Capital, certain of the Additional Sellers may be incentivized to sell their shares because they may experience a positive rate of return on the securities they purchased due to the differences in the purchase prices described in the preceding paragraph and the public trading price of our securities. Based on the closing price of our Class A Ordinary Shares of $6.57 as of June 21, 2022, upon the sale of our Class A Ordinary Shares, (a) the PIPE Investors may experience a potential loss of up to $3.43 per share, (b) the PIPE Investors who effectively pre-funded Swvl with the Swvl Exchangeable Notes may experience a potential loss of up to $1.93 – $2.93 per share, (c) the Sponsor may experience a potential profit of up to $6.57 per share and (d) the Additional Sellers who were former equityholders of Legacy Swvl may experience a potential loss of up to $3.43 per share. Based on the closing price of our Warrants of $0.54 as of June 21, 2022, upon the sale of the Private Placement Warrants, the Sponsor may experience a potential loss of up to $0.96 per Private Placement Warrant.

The Class A Ordinary Shares and Warrants being offered for resale in the Additional Prospectus represent a substantial percentage of the total outstanding shares of our Class A Ordinary Shares as of the date of this prospectus. The outstanding Class A Ordinary Shares being offered in the Additional Prospectus represent

 

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approximately 66% of our outstanding Class A Ordinary Shares, assuming the Class A Ordinary Shares issuable upon the achievement of certain stock price thresholds are not outstanding, or 75% assuming they are outstanding. Additionally, if all the Warrants are exercised, the Additional Sellers would own an additional 17,433,333 shares of Class A Ordinary Shares, representing an additional 12.8% of the total outstanding Class A Ordinary Shares.

The sale of the Resale Securities being offered pursuant to this prospectus together with the sale of the securities held by the Additional Sellers, or the perception that these sales could occur, could result in a significant decline in the public trading price of our Class A Ordinary Shares.

During the Earnout Period, we may issue up to an aggregate of 15,000,000 additional Class A Ordinary Shares to Eligible Swvl Equityholders in three equal tranches upon the occurrence of each Earnout Triggering Event (i.e. achieving a share price of $12.50 (Triggering Event I), $15.00 (Triggering Event II) and $17.50 (Triggering Event III)) or earlier on Change of Control. A significant decline in the public trading price of our Class A Ordinary Shares could result in no Earnout Triggering Events occurring and no Earnout Shares being issued. If Earnout Shares are issued, the holders thereof may seek to sell some or all of Earnout Shares on or after an Earnout Triggering Event, which sales or perception of potential sales could also depress the market price of our securities.

Future resales of Swvl Securities, including the Resale Securities being offered pursuant to this prospectus, may cause the market price of Swvl’s shares to drop significantly, even if Swvl’s business is doing well.

Sales of a substantial number of Swvl Securities, including the Resale Securities being offered pursuant to this prospectus consisting of (a) 386,971 Commitment Shares that we issued to the Selling Securityholder pursuant to the Purchase Agreement in consideration of its commitment to purchase shares of Class A Ordinary Shares at our election under the Purchase Agreement, and (b) 102,552,795 Purchase Shares we may elect in our sole discretion to issue and sell to the Selling Securityholder under the Purchase Agreement from time to time after the Commencement Date, in the public market could occur at any time. Sales of a substantial number of Swvl Securities, including the Resale Securities being offered pursuant to this prospectus, in the public market or the perception that these sales might occur, could depress the market price of our securities and could impair our ability to raise capital through the sale of additional equity securities. Sales of a substantial number of our securities upon any future waivers or expiration of lock-up agreements entered into by our shareholders, or the perception that such sales may occur, could have a material and adverse effect on the trading price of our securities. For example, certain lock-up restrictions entered into in connection with the Business Combination will expire in the six to twelve months following closing of the Business Combination. We currently intend to ask certain of such shareholders to voluntarily extend their applicable lock-up period, but they are under no obligation to do so. Sales of a substantial number of Swvl Securities in the public market could occur at any time. These sales, or the perception in the market that the holders of a large number of shares intend to sell shares, could cause the market price of our securities to decline or increase the volatility in the market price of our securities.

Further, we have filed with the SEC a registration statement covering the resale of certain Class A Ordinary Shares issued in connection with the Business Combination, including shares issued pursuant to the private offering of Swvl Securities (the “PIPE Financing”) to certain investors (the “PIPE Investors”). More specifically, that separate registration statement registers (a) 87,379,534 Class A Ordinary Shares and (b) 5,933,333 Private Placement Warrants, together with (1) 11,500,000 Class A Ordinary Shares issuable upon exercise of the Public Warrants and (2) 5,933,333 Class A Ordinary Shares issuable upon exercise of the Private Placement Warrants. Any of these resales, or the perception in the market that the holders of a large number of shares intend to resell shares, could cause the market price of our securities to decline or increase the volatility in the market price of our securities.

 

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Pursuant to the Purchase Agreement, we have agreed not to issue or sell, and the Selling Securityholder has agreed not to purchase or acquire, any Class A Ordinary Shares which, when aggregated with all other Class A Ordinary Shares then beneficially owned by the Selling Securityholder and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the beneficial ownership by the Selling Securityholder of more than the Beneficial Ownership Limitation. Notwithstanding the Beneficial Ownership Limitation, the Selling Securityholder may sell our Class A Ordinary Shares in the public market at any time, so long as the registration statement of which this prospectus forms a part remains effective and this prospectus remains usable and the related purchase agreement with B. Riley has not been terminated. In addition to the Selling Securityholder, certain other shareholders beneficially owning approximately 47% of our outstanding Class A Ordinary Shares may, subject to any contractual lock-ups, sell all of their shares at the same time as the Selling Securityholder. Sales of a substantial number of our shares in the public market, including the number of Resale Securities being offered pursuant to this prospectus (which equals approximately 87% of the total outstanding shares of our Class A Ordinary Shares as of the date of this prospectus, calculated as 102,939,766 Class A Ordinary Shares potentially issuable to the Selling Stockholder, divided by 118,883,073 currently outstanding Class A Ordinary Shares), or the perception that these sales might occur, could depress the market price of our securities. The frequency of such sales could cause the market price of our securities to decline or increase the volatility in the market price of our securities.

Investor perceptions of risks in developing countries could reduce investor appetite for investments in these countries or for the securities of issuers operating in these countries.

Investing in securities of issuers operating in developing countries generally involves a higher degree of risk than investing in securities of issuers from more developed countries. Economic crises in one or more such countries may reduce overall investor appetite for securities of issuers operating in developing countries generally, even for such issuers that operate outside the regions directly affected by the crises. Past economic crises in developing countries, including in Egypt, have often resulted in significant outflows of international capital and caused issuers operating in developing countries to face higher costs for raising funds, and in some cases have effectively impeded access to international capital markets for extended periods.

Thus, even if the economies of the countries in which Swvl operates remain relatively stable, financial turmoil in any developing market country could have an adverse effect on Swvl’s business, financial condition and operating results.

If securities or industry analysts do not publish research or publish inaccurate or unfavorable research about Swvl’s business, the market price for Swvl Securities and trading volume could decline.

The trading market for Swvl Securities depends in part on the research and reports that securities or industry analysts publish about Swvl or its business. If securities or industry analyst coverage results in downgrades of Swvl Securities or publishes inaccurate or unfavorable research about Swvl’s business, the share price of Swvl Securities would likely decline. If one or more of these analysts cease coverage of Swvl or fail to publish reports on Swvl regularly, Swvl could lose visibility in the financial markets and demand for Swvl Securities could decrease, which, in turn, could cause the market price or trading volume for Swvl Securities to decline significantly.

In addition, organizations that provide information to investors on corporate governance and related matters have developed ratings processes for evaluating companies on their approach to ESG matters. Such ratings are used by some investors to inform their investment and voting decisions. Inaccurate or unfavorable ESG ratings could lead to negative investor sentiment towards Swvl, which could have a negative impact on the market price and demand for Swvl Securities, as well as Swvl’s access to and cost of capital.

 

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Swvl may be a “passive foreign investment company,” or “PFIC”, which could result in adverse U.S. federal income tax consequences to U.S. Holders.

If Swvl is a PFIC for any taxable year (or portion thereof) in which a U.S. Holder (as defined below in the section of this prospectus entitled “Taxation”), holds Class A Ordinary Shares, such U.S. Holder may be subject to adverse U.S. federal income tax consequences and certain information reporting requirements. U.S. Holders are strongly encouraged to consult with their own tax advisors to determine the application of the PFIC rules to them in their particular circumstances and any resulting tax consequences. Please see the section of this prospectus entitled “Taxation” for a more detailed discussion with respect to the PFIC status of Swvl and the resulting tax consequences to U.S. Holders.

Swvl will incur increased costs as a result of operating as a public company, and its management will be required to devote substantial time to new compliance initiatives and corporate governance practices.

As a public company, Swvl incurs significant legal, accounting and other expenses that it did not incur as a private company. For example, Swvl is subject to the reporting requirements of the Exchange Act and is required to comply with the applicable requirements of the Sarbanes-Oxley Act and the Dodd-Frank Wall Street Reform and Consumer Protection Act, as well as rules and regulations of the SEC and Nasdaq.

Swvl expects that compliance with these requirements will increase its legal and financial compliance costs and will make some activities more time-consuming and costly. In addition, Swvl’s management and other personnel may be required to divert their attention from operational and other business matters to devote substantial time to these public company requirements. In particular, Swvl is incurring significant expenses and devoting substantial management effort toward ensuring compliance with the requirements of Section 404 of the Sarbanes-Oxley Act, which will increase further when Swvl is no longer an “emerging growth company” as defined under the Jumpstart Our Business Startups Act of 2012 (the “JOBS Act”) (Please see the section entitled “Swvl is an “emerging growth company”, and the reduced disclosure requirements applicable to emerging growth companies may make Swvl Securities less attractive to investors”). As a public company, Swvl has been hiring and is continuing to hire additional accounting and financial staff with appropriate public company experience and technical accounting knowledge and may need to establish an internal audit function.

Swvl’s management team has limited experience managing a public company, which may result in difficulty adequately operating and growing Swvl’s business.

Swvl’s management team has limited experience managing a publicly traded company, interacting with public company investors and complying with the increasingly complex laws pertaining to public companies. Swvl’s management team may not successfully or efficiently manage their new roles and responsibilities or the transition to being a public company subject to significant regulatory oversight and reporting obligations under U.S. federal securities laws and the continuous scrutiny of analysts and investors. These new obligations and constituents will require significant attention from Swvl’s senior management and could divert their attention from the day-to-day management of Swvl’s business, which could adversely affect Swvl’s business, financial condition and operating results.

If Swvl fails to establish and maintain proper and effective internal control over financial reporting, its ability to produce accurate and timely financial statements could be impaired, investors may lose confidence in its financial reporting and the trading price of its shares may decline.

Pursuant to Section 404 of the Sarbanes-Oxley Act, subject to accommodations available to newly public companies and emerging growth companies, a report by management on internal control over financial reporting and an attestation of our independent registered public accounting firm is required. As a newly public company, Swvl has not previously been required to conduct an internal control evaluation and assessment. The rules governing the standards that must be met for management to assess internal control over financial reporting are

 

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complex and require significant documentation, testing and possible remediation. To comply with the Sarbanes-Oxley Act, the requirements of being a reporting company under the Exchange Act and any complex accounting rules in the future, Swvl is in the process of upgrading its information technology systems, implementing additional financial and management controls, reporting systems and procedures, and hiring additional accounting and finance staff. If Swvl is unable to hire the additional accounting and finance staff necessary to comply with these requirements, it may need to retain additional outside consultants. Swvl may not be able to effectively and timely implement controls and procedures that adequately respond to the increased regulatory compliance and reporting requirements. If Swvl is not able to comply with the requirements of Section 404 of the Sarbanes-Oxley Act, including if Swvl is unable to maintain proper and effective internal controls, Swvl may not be able to produce timely and accurate financial statements. If Swvl cannot provide reliable financial reports or prevent fraud, Swvl’s business and results of operations could be harmed, investors could lose confidence in our reported financial information and Swvl could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities.

In addition, Swvl has identified material weaknesses in its internal control over financial reporting and there can be no assurances that there will not be material weaknesses in Swvl’s internal control over financial reporting in the future. Any failure to maintain internal control over financial reporting could severely inhibit Swvl’s ability to accurately report its financial condition, operating results or cash flows. If Swvl is unable to comply with the requirements of the Sarbanes-Oxley Act or conclude that its internal control over financial reporting is effective, investors may lose confidence in the accuracy and completeness of its financial reports, the market price of its securities could decline, and Swvl could be subject to sanctions or investigations by Nasdaq, the SEC or other regulatory authorities. Failure to remedy any material weakness in Swvl’s internal control over financial reporting, or to implement or maintain other effective control systems required of public companies, could also restrict Swvl’s future access to the capital markets. In addition, failure to implement adequate internal controls or ensure that books and records accurately reflect transactions could result in criminal and civil fines and penalties under the FCPA, as well as related reputational harm and legal fees in defense of such investigations. Any of the foregoing risks could have an adverse effect on Swvl’s business, financial condition and results of operations.

Swvl is an “emerging growth company”, and the reduced disclosure requirements applicable to emerging growth companies may make Swvl Securities less attractive to investors.

Swvl is an “emerging growth company,” as defined in the JOBS Act. As a result, Swvl is taking advantage of certain exemptions from various reporting requirements that are applicable to other public companies that are not emerging growth companies, including, the ability to furnish two rather than three years of income statements and statements of cash flows in various required filings and not being required to include an attestation report on internal control over financial reporting issued by Swvl’s independent registered public accounting firm. As a result, Swvl’s shareholders may not have access to certain information that they deem important. Swvl could be an emerging growth company for up to five years, although Swvl could lose that status sooner if its gross revenue exceeds $1.07 billion, if it issues more than $1.0 billion in nonconvertible debt in a three-year period, or if the fair value of its shares held by non-affiliates exceeds $700.0 million (and Swvl has been a public company for at least 12 months and has filed one annual report on Form 20-F).

Swvl cannot predict if investors will find Swvl Securities less attractive if it relies on these exemptions. If some investors find Swvl Securities less attractive as a result, there may be a less active trading market for the Swvl Securities and its share price may be more volatile.

As a foreign private issuer, Swvl is not subject to U.S. proxy rules and is subject to Exchange Act reporting obligations that, to some extent, are more lenient and less frequent than those of a U.S. domestic public company.

Swvl reports under the Exchange Act as a non-U.S. company with foreign private issuer status. Because Swvl qualifies as a foreign private issuer under the Exchange Act, Swvl is exempt from certain provisions of the Exchange Act that are applicable to U.S. domestic public companies, including (1) the sections of the Exchange Act regulating

 

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the solicitation of proxies, consents or authorizations in respect of a security registered under the Exchange Act, (2) the sections of the Exchange Act requiring insiders to file public reports of their share ownership and trading activities and liability for insiders who profit from trades made in a short period of time and (3) the rules under the Exchange Act requiring the filing with the SEC of quarterly reports on Form 10-Q containing unaudited financial and other specified information. In addition, foreign private issuers are not required to file their annual report on Form 20-F until 120 days after the end of each fiscal year, while U.S. domestic issuers that are accelerated filers are required to file their annual report on Form 10-K within 75 days after the end of each fiscal year and U.S. domestic issuers that are large accelerated filers are required to file their annual report on Form 10-K within 60 days after the end of each fiscal year. Foreign private issuers are also exempt from Regulation FD, which is intended to prevent issuers from making selective disclosures of material information. As a result of all of the above, holders of Swvl Securities may not have the same protections afforded to shareholders of a company that is not a foreign private issuer.

As a company incorporated in the British Virgin Islands, Swvl is permitted to adopt certain home country practices in relation to corporate governance matters that differ significantly from Nasdaq corporate governance listing standards; these practices may afford less protection to shareholders than they would enjoy if Swvl complied fully with Nasdaq corporate governance listing standards.

Swvl is subject to Nasdaq corporate governance listing standards. However, Nasdaq rules permit a foreign private issuer such as Swvl to follow the corporate governance practices of its home country. Certain corporate governance practices in the British Virgin Islands, which is Swvl’s home country, may differ significantly from Nasdaq corporate governance listing standards. For instance, Swvl may choose to follow home country practice in lieu of Nasdaq corporate governance listing standards such as:

 

   

have a majority of the board be independent (although all of the members of the audit committee must be independent under the Exchange Act);

 

   

have a compensation committee or a nominating or corporate governance committee consisting entirely of independent directors;

 

   

have regularly scheduled executive sessions for non-management directors;

 

   

have annual meetings and director elections; and

 

   

obtain shareholder approval prior to certain issuances (or potential issuances) of securities.

Swvl follows home country practice and is exempt from requirements to obtain shareholder approval for the issuance of 20% or more of its outstanding shares under Nasdaq Listing Rule 5635(d). If, in the future, Swvl chooses to follow other home country practices in lieu of Nasdaq corporate governance listing standards (such as the ones listed above), Swvl’s shareholders may be afforded less protection than they otherwise would have under corporate governance listing standards applicable to U.S. domestic issuers. For more information about Swvl’s corporate governance practices, please see the subsection of this prospectus entitled “Management”.

As the rights of shareholders under BVI law differ from those under U.S. law, you may have fewer protections as a shareholder.

Swvl’s corporate affairs are governed by its Articles, the BVI Companies Act and the common law of the BVI. The rights of shareholders to take legal action against Swvl’s directors, actions by minority shareholders and the fiduciary responsibilities of directors under BVI law are governed by the BVI Companies Act and the common law of the BVI. The common law of the BVI is derived in part from comparatively limited judicial precedent in the BVI as well as from the common law of England, which has persuasive, but not binding, authority on a court in the BVI. The rights of Swvl’s shareholders and the fiduciary responsibilities of Swvl’s directors under BVI law are largely codified in the BVI Companies Act but are not as clearly established as they would be under statutes or judicial precedents in some jurisdictions in the United States. In particular, the BVI has a less exhaustive body of securities laws as compared to the United States, and some states (such as

 

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Delaware) have more fully developed and judicially interpreted bodies of corporate law. There is no statutory recognition in the BVI of judgments obtained in the U.S., although the courts of the BVI will in certain circumstances recognize and enforce a non-penal judgment of a foreign court of competent jurisdiction without retrial on the merits. As a result of all of the above, holders of Swvl Securities may have more difficulty in protecting their interests in the face of actions taken by Swvl’s management, members of the board of directors or major shareholders than they would as shareholders of a U.S. company.

The Articles and the Swvl Shareholders Agreement contain certain provisions, including anti-takeover provisions, that limit the ability of shareholders to take certain actions and could delay or discourage takeover attempts that shareholders may consider favorable.

The Articles and the shareholders agreement by and among Swvl and certain of its shareholders (the “Swvl Shareholders Agreement”) contain provisions that could have the effect of rendering more difficult, delaying, or preventing an acquisition that shareholders may consider favorable, including transactions in which shareholders might otherwise receive a premium for their shares. These provisions could also limit the price that investors might be willing to pay in the future for Swvl Securities, and therefore depress the trading price. These provisions could also make it difficult for shareholders to take certain actions, including electing directors who are not nominated by the incumbent members of the Board or taking other corporate actions, including effecting changes in Swvl’s management, and may inhibit the ability of an acquiror to effect an unsolicited takeover attempt. Such provisions include, among other things:

 

   

a classified board of directors with staggered, three-year terms;

 

   

the ability of the Board to issue preferred shares and to determine the price and other terms of those shares, including preferences and voting rights, without shareholder approval;

 

   

the right of Mostafa Kandil to serve as Chair of the Board so long as he remains Chief Executive Officer of Swvl and to serve as a director so long as he beneficially owns at least 1% of the outstanding shares of Swvl and his employment has not been terminated for cause;

 

   

until the completion of Swvl’s third annual meeting of shareholders, commitments by major shareholders to vote in favor of the appointment of Swvl designees to the Board at any shareholder meeting (and, thereafter, to vote in favor of the appointment of Mostafa Kandil or his designee to the Board, subject to specified conditions);

 

   

the limitation of liability of, and the indemnification of and advancement of expenses to, members of the Board;

 

   

advance notice procedures with which shareholders must comply to nominate candidates to the Board or to propose matters to be acted upon at a shareholders’ meeting, which could preclude shareholders from bringing matters before annual or special meetings and delay changes in the Board and also may discourage or deter a potential acquirer from conducting a solicitation of proxies to elect the acquirer’s own slate of directors or otherwise from attempting to obtain control of Swvl;

 

   

that directors may be removed only for cause and only upon the vote of two-thirds of the directors then in office;

 

   

that shareholders may not act by written consent in lieu of a meeting;

 

   

the right of the Board to fill vacancies created by the expansion of the Board or the resignation, death or removal of a director; and

 

   

that the Articles may be amended only by the Board of Directors or by the affirmative vote of holders of a majority of not less than 75% of the votes of the shares of Swvl entitled to vote.

 

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Shareholders may experience difficulties in effecting service of legal process, enforcing foreign judgments or bringing original actions in the jurisdictions in which Swvl operates based on U.S. or other foreign laws against Swvl, its management or the experts named in this registration statement.

Swvl is a British Virgin Islands company and substantially all of its assets and operations are located outside of the U.S. In addition, most of Swvl’s directors and officers reside outside the U.S. and the substantial majority of their assets are located outside of the U.S. As a result, it may be difficult to effect service of process within the U.S. or elsewhere upon these persons. It may also be difficult to enforce judgments in the jurisdictions in which Swvl operates or British Virgin Islands courts against Swvl and its officers and directors. It may be difficult or impossible to bring an action against Swvl in the British Virgin Islands if you believe your rights under the U.S. securities laws have been infringed. In addition, there is uncertainty as to whether the courts of the British Virgin Islands or jurisdictions in which Swvl operates would recognize or enforce judgments of U.S. courts against Swvl or such persons predicated upon the civil liability provisions of the securities laws of the U.S. or any state and it is uncertain whether such British Virgin Islands courts or courts in jurisdictions in which Swvl operates would hear original actions brought in the British Virgin Islands or jurisdictions in which Swvl operates against Swvl or such persons predicated upon the securities laws of the U.S. or any state.

Mail sent to Swvl may be delayed.

Mail addressed to Swvl and received at its registered office is forwarded unopened to the forwarding address supplied by Swvl. None of Swvl, its directors, officers, advisors or service providers (including the organization which provides registered office services in the BVI) bears any responsibility for any delay howsoever caused in mail reaching the forwarding address. As a result, shareholder communications sent by mail to Swvl may be delayed.

It may be difficult to enforce judgments obtained in the U.S. in BVI.

There is no statutory enforcement in the British Virgin Islands of judgments obtained in the U.S., however, the courts of the British Virgin Islands will in certain circumstances recognize such a foreign judgment and treat it as a cause of action in itself which may be sued upon as a debt at common law so that no retrial of the issues would be necessary, provided that:

 

   

the U.S. court issuing the judgment had jurisdiction in the matter and the company either submitted to such jurisdiction or was resident or carrying on business within such jurisdiction and was duly served with process;

 

   

the judgment is final and for a liquidated sum;

 

   

the judgment given by the U.S. court was not in respect of penalties, taxes, fines or similar fiscal or revenue obligations of the company;

 

   

in obtaining judgment there was no fraud on the part of the person in whose favor judgment was given or on the part of the court;

 

   

recognition or enforcement of the judgment in the British Virgin Islands would not be contrary to public policy; and

 

   

the proceedings pursuant to which judgment was obtained were not contrary to natural justice.

The British Virgin Islands courts are unlikely:

 

   

to recognize or enforce against Swvl, judgments of courts of the U.S. predicated upon the civil liability provisions of the securities laws of the U.S.; and

 

   

to impose liabilities against Swvl, predicated upon the certain civil liability provisions of the securities laws of the U.S. so far as the liabilities imposed by those provisions are penal in nature.

 

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Risks Relating to Shares Sold Pursuant to the Purchase Agreement

It is not possible to predict the actual number of shares we will sell under the Purchase Agreement to the Selling Securityholder, or the actual gross proceeds resulting from those sales.

On March 22, 2022, the Company, Legacy Swvl and the Selling Securityholder entered into the Purchase Agreement, as amended on April 6, 2022 and April 14, 2022, pursuant to which the Selling Securityholder has committed to purchase up to $471,742,855 of our Class A Ordinary Shares, subject to certain limitations and conditions set forth in the Purchase Agreement. The Class A Ordinary Shares that may be issued under the Purchase Agreement may be sold by us to the Selling Securityholder at our discretion from time to time over the 24-month period commencing on the Commencement Date.

We generally have the right to control the timing and amount of any sales of our Class A Ordinary Shares to the Selling Securityholder under the Purchase Agreement. Sales of our Class A Ordinary Shares, if any, to the Selling Securityholder under the Purchase Agreement will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to the Selling Securityholder all, some or none of our Class A Ordinary Shares that may be available for us to sell to the Selling Securityholder pursuant to the Purchase Agreement.

Because the purchase price per share to be paid by the Selling Securityholder for the Class A Ordinary Shares that we may elect to sell to the Selling Securityholder under the Purchase Agreement, if any, will fluctuate based on the market prices of our Class A Ordinary Shares at the time we elect to sell shares to the Selling Securityholder pursuant to the Purchase Agreement, if any, it is not possible for us to predict, as of the date of this prospectus and prior to any such sales, the number of Class A Ordinary Shares that we will sell to the Selling Securityholder under the Purchase Agreement, the purchase price per share that the Selling Securityholder will pay for shares purchased from us under the Purchase Agreement, or the aggregate gross proceeds that we will receive from those purchases by the Selling Securityholder under the Purchase Agreement.

Although the Purchase Agreement provides that we may sell up to an aggregate of $471,742,855 of our Class A Ordinary Shares to the Selling Securityholder, only 102,939,766 Class A Ordinary Shares are being registered under the Securities Act for resale by the Selling Securityholder under this prospectus, which includes 386,971 Commitment Shares issued to the Selling Securityholder. If it becomes necessary for us to issue and sell to the Selling Securityholder under the Purchase Agreement more than the 102,939,766 shares being registered for resale under the registration statement of which this prospectus forms a part in order to receive aggregate gross proceeds equal to $471,742,855 under the Purchase Agreement, we must file with the SEC one or more post-effective amendments to the registration statement of which this prospectus forms a part or additional registration statements to register under the Securities Act the resale by the Selling Securityholder of any such additional Class A Ordinary Shares we wish to sell from time to time under the Purchase Agreement, which the SEC must declare effective, in each case before we may elect to sell any additional Class A Ordinary Shares to the Selling Securityholder under the Purchase Agreement. Any issuance and sale by us under the Purchase Agreement of a substantial amount of Class A Ordinary Shares in addition to the 102,939,766 Class A Ordinary Shares being registered for resale by the Selling Securityholder under this prospectus could cause additional substantial dilution to our stockholders. The number of Class A Ordinary Shares ultimately offered for sale by the Selling Securityholder is dependent upon the number of Class A Ordinary Shares, if any, we ultimately elect to sell to the Selling Securityholder under the Purchase Agreement.

Investors who buy shares at different times will likely pay different prices.

Pursuant to the Purchase Agreement, we will have discretion, subject to market demand, to vary the timing, prices, and numbers of Class A Ordinary Shares sold to the Selling Securityholder. If and when we do elect to sell Class A Ordinary Shares to the Selling Securityholder pursuant to the Purchase Agreement, after the Selling Securityholder has acquired such shares, the Selling Securityholder may resell all, some or none of such shares at

 

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any time or from time to time in its discretion and at different prices. As a result, investors who purchase shares from the Selling Securityholder in this offering at different times will likely pay different prices for those shares, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes in their investment results. Investors may experience a decline in the value of the shares they purchase from the Selling Securityholder in this offering as a result of future sales made by us to the Selling Securityholder at prices lower than the prices such investors paid for their shares in this offering. In addition, if we sell a substantial number of shares to the Selling Securityholder under the Purchase Agreement, or if investors expect that we will do so, the actual sales of shares or the mere existence of our arrangement with the Selling Securityholder may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales.

 

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COMMITTED EQUITY FINANCING

On March 22, 2022, the Company, Legacy Swvl and the Selling Securityholder entered into an ordinary shares purchase agreement and a registration rights agreement in order to establish a committed equity financing facility for the Company following the consummation of the Business Combination, which subsequently occurred on March 31, 2022. Accordingly, as the intent of each of the parties to such agreements was to establish a source of potential equity financing solely for the post-Business Combination Company, and not for either the Company or Legacy Swvl in the event that the Business Combination was not consummated, and that the Selling Securityholder would commit to purchase, at our direction, only newly issued Class A Ordinary Shares of the post-Business Combination Company that had been approved for listing and were then publicly traded on Nasdaq, both the ordinary shares purchase agreement and the registration rights agreement expressly stated that the effectiveness of such agreements is delayed until (i) the consummation of the Business Combination shall have occurred and (ii) the “Closing” as defined in the ordinary shares purchase agreement occurs, subject to the satisfaction of each of the conditions to Closing set forth in the ordinary shares purchase agreement, provided that such Closing may not occur prior to 5:00 p.m., New York City time, on the second trading day immediately following the date on which the Business Combination is consummated. Both the ordinary shares purchase agreement and the registration rights agreement further expressly stated that prior to such Closing, the purchase agreement and the registration rights agreement have no force or effect.

The ordinary shares purchase agreement executed on March 22, 2022 further provided that the Selling Securityholder’s maximum aggregate purchase obligation thereunder, or its “Total Commitment” as defined therein, would be such number of Class A Ordinary Shares having an aggregate gross purchase price to the Selling Securityholder equal to $525,000,000, less the aggregate dollar amount of funds released to the Company on or after the date of consummation of the Business Combination (net of redemptions) from the Trust Account, and that such dollar amount of funds released to the Company from the Trust Account, as well as the resulting “Total Commitment” of the Selling Securityholder under the committed equity facility, each would be specified in an amendment to the ordinary shares purchase agreement and the registration rights agreement prior to the Closing (and prior to the Company’s initial filing of the registration statement that includes this prospectus with the SEC), so that the amount of the Selling Securityholder’s Total Commitment under the committed equity facility would be fixed at the time of the Closing and prior to the initial filing of the registration statement that includes this prospectus with the SEC. The Company determined $525,000,000 to be its desired upper limit to the facility after reviewing its business plan, including its related target capital raise upon consummation of the Business Combination and for the subsequent twenty-four months. More specifically, in addition to cash that had been made available to the Company through the issuance of Swvl Exchangeable Notes ($69,168,000 as of March 22, 2022) and cash that was expected to be funded by the PIPE Investors upon consummation of the Business Combination ($42,332,000 as of March 22, 2022), the Company targeted to raise $345,000,000 (representing the cash on hand in the Trust Account), plus $50,000,000 (representing the Company’s estimate of the Company’s and the SPAC’s cash transaction expenses as a result of the Business Combination), plus $130,000,000 (representing additional growth capital for strategic initiatives including potential future acquisitions). Following discussions between the Company and the Selling Securityholder, the Company and the Selling Securityholder agreed to the maximum aggregate purchase obligation described in this paragraph.

Prior to the consummation of the Business Combination on March 31, 2022, there were no redemptions of SPAC Class A Ordinary Shares and the cash on hand in the Trust Account was $345,000,000, an amount more than required by the Minimum Cash Condition (as defined herein) in the Business Combination Agreement. Upon the consummation of the Business Combination on March 31, 2022, after giving effect to redemptions of 29,175,999 SPAC Class A Ordinary Shares, amounting to $291,853,889.71, the cash on hand in the Trust Account was $53,257,144.90. As a result, B. Riley’s Total Commitment under the ordinary shares purchase agreement was reduced by the cash on hand in the Trust Account as of the effective time of the Business Combination and became fixed at $471,742,855.

Accordingly, as contemplated by the ordinary shares purchase agreement, on April 6, 2022, the Company, Legacy Swvl and the Selling Securityholder entered into Amendment No. 1 to the Purchase Agreement and

 

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Amendment No. 1 to the Registration Rights Agreement, among other things, to specify that the Selling Securityholder’s Total Commitment under the committed equity facility is $471,742,855 and to modify certain of the defined terms contained therein. Similar to the ordinary shares purchase agreement and the registration rights agreement dated March 22, 2022, each of Amendment No. 1 to the Purchase Agreement and Amendment No. 1 to the Registration Rights Agreement expressly stated that such amendments shall become effective concurrently with the effectiveness of the ordinary shares purchase agreement and the registration rights agreement at the Closing, subject to the satisfaction of each of the conditions to Closing set forth in the ordinary shares purchase agreement, and that such amendments shall have no force or effect prior to the effectiveness of the ordinary shares purchase agreement and the registration rights agreement dated March 22, 2022, concurrently with the effectiveness of such amendments, at the Closing. Thereafter, on April 6, 2022, the Closing under the ordinary shares purchase agreement occurred, at which time each of the ordinary shares purchase agreement, as amended by Amendment No. 1 to the Purchase Agreement, and the registration rights agreement, as amended by Amendment No. 1 to the Registration Rights Agreement, became effective.

Subsequently, on April 14, 2022, the Company, Legacy Swvl and the Selling Securityholder entered into Amendment No. 2 to the ordinary shares purchase agreement (“Amendment No. 2 to the Purchase Agreement”), primarily to effect certain changes to the pricing mechanics and certain of the procedures relating to the purchases pursuant to which the Company may elect to require the Selling Securityholder to purchase shares of Class A Ordinary Shares from the Company pursuant to the committed equity facility. The ordinary shares purchase agreement dated March 22, 2022, as amended by Amendment No. 1 to the Purchase Agreement on April 6, 2022 and Amendment No. 2 to the Purchase Agreement on April 14, 2022, is referred to in this prospectus as the “Purchase Agreement,” and the registration rights agreement dated March 22, 2022, as amended by Amendment No. 1 to the Registration Rights Agreement on April 6, 2022, is referred to in this prospectus as the “Registration Rights Agreement.”

Below is a summary of the terms of the Purchase Agreement and the Registration Rights Agreement, each as so amended prior to the date the registration statement of which this prospectus is a part was initially filed by the Company with the SEC on April 21, 2022.

Pursuant to the Purchase Agreement, we have the right, in our sole discretion, to sell to the Selling Securityholder up to $471,742,855 aggregate principal amount of Class A Ordinary Shares (subject to certain limitations set forth in the Purchase Agreement) from time to time after the Commencement Date and during the term of the Purchase Agreement. Sales of Class A Ordinary Shares pursuant to the Purchase Agreement, and the timing of any sales, are solely at our option, and we are under no obligation to sell any securities to the Selling Securityholder under the Purchase Agreement. In accordance with our obligations under the Registration Rights Agreement, we have filed the registration statement that includes this prospectus with the SEC to register under the Securities Act the resale by the Selling Securityholder of up to 102,939,766 Class A Ordinary Shares, consisting of (i) 386,971 Commitment Shares that we issued to the Selling Securityholder as consideration for its commitment to purchase Class A Ordinary Shares at our direction upon the terms and subject to the conditions set forth in the Purchase Agreement, and (ii) up to 102,552,795 shares of Class A Ordinary Shares that we may elect, in our sole discretion, to issue and sell to the Selling Securityholder, from time to time from and after the Commencement Date under the Purchase Agreement. We have calculated the amount of Class A Ordinary Shares that we may elect to issue and sell to the Selling Securityholder based on the quotient obtained by dividing the $471,742,855 total commitment amount by the average of the high and low trading price of the Class A Ordinary Shares on April 14, 2022 of $4.60 per share.

We do not have the right to commence any sales of our Class A Ordinary Shares to the Selling Securityholder under the Purchase Agreement until the Commencement Date, which is the date on which all of the conditions to the Selling Securityholder’s purchase obligations set forth in the Purchase Agreement have been initially satisfied, including that the registration statement that includes this prospectus, be declared effective by the SEC. From and after the Commencement Date, subject to the continued satisfaction of conditions set forth in the Purchase Agreement, we will have the right, but not the obligation, from time to time at our sole discretion

 

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over the 24-month period commencing on the Commencement Date, to direct the Selling Securityholder to purchase a specified amount of shares of Class A Ordinary Shares, not to exceed the Maximum Purchase Amount (and subject to certain additional limitations set forth in the Purchase Agreement) by timely delivering a Purchase Notices and/or Intraday Purchase Notices to the Selling Securityholder on certain trading days we select as Purchase Dates for such purchase in accordance with the terms of the Purchase Agreement..

From and after Commencement, subject to the continued satisfaction of conditions set forth in the Purchase Agreement, we will control the timing and amount of any sales of Class A Ordinary Shares to the Selling Securityholder. Actual sales of our Class A Ordinary Shares to the Selling Securityholder under the Purchase Agreement will depend on a variety of factors to be determined by us from time to time, including, among other things, market conditions, the trading price of our Class A Ordinary Shares and determinations by us as to the appropriate sources of funding for our company and its operations.

We may not issue or sell any Class A Ordinary Shares to the Selling Securityholder under the Purchase Agreement which, when aggregated with all other Class A Ordinary Shares then beneficially owned by the Selling Securityholder and its affiliates (as calculated pursuant to Section 13(d) of the Exchange Act and Rule 13d-3 promulgated thereunder), would result in the Selling Securityholder beneficially owning more than the Beneficial Ownership Limitation.

Neither we nor the Selling Securityholder may assign or transfer any of our respective rights and obligations under the Purchase Agreement or the Registration Rights Agreement, and no provision of the Purchase Agreement or the Registration Rights Agreement may be modified or waived by the parties.

The net proceeds from sales, if any, under the Purchase Agreement, will depend on the frequency and prices at which we sell Class A Ordinary Shares to the Selling Securityholder. To the extent we sell shares under the Purchase Agreement, we currently plan to use any proceeds therefrom for working capital and general corporate purposes, including to fund acquisitions.

As consideration for the Selling Securityholder’s commitment to purchase Class A Ordinary Shares at our direction upon the terms and subject to the conditions set forth in the Purchase Agreement, we issued 386,971 Commitment Shares to the Selling Securityholder.

The Purchase Agreement and the Registration Rights Agreement contain customary representations, warranties, conditions and indemnification obligations of the parties. The representations, warranties and covenants contained in such agreements were made only for purposes of such agreements and as of specific dates, were solely for the benefit of the parties to such agreements and may be subject to limitations agreed upon by the contracting parties.

Purchase of Class A Ordinary Shares Under the Purchase Agreement

Purchases

From and after the Commencement Date, we will have the right, but not the obligation, from time to time at our sole discretion over the 24-month period commencing on the Commencement Date, to direct the Selling Securityholder to purchase a specified amount of our Class A Ordinary Shares, not to exceed the applicable Maximum Purchase Amount calculated in accordance with the Purchase Agreement (such specified number of shares to be purchased by the Selling Stockholder in such Purchase, adjusted to the extent necessary to give effect to the applicable Maximum Purchase Amount and certain additional limitations set forth in the Purchase Agreement, the “Purchase Share Amount”), in a Purchase under the Purchase Agreement, by timely delivering a written Purchase Notice to Selling Securityholder, prior to 9:00 a.m., Eastern time, on any trading day we select as the Purchase Date for such Purchase, so long as:

 

   

the closing sale price of our Class A Ordinary Shares on the trading day immediately prior to such Purchase Date is not less than the Threshold Price (subject to adjustment as set forth in the Purchase Agreement); and

 

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all our Class A Ordinary Shares subject to all prior Purchases and prior Intraday Purchases effected by us under the Purchase Agreement have been received by Selling Securityholder prior to the time we deliver such Purchase Notice to Selling Securityholder.

The maximum number of our Class A Ordinary Shares that the Selling Securityholder is required to purchase in any single Purchase under the Purchase Agreement may not exceed the Maximum Purchase Amount applicable to such Purchase, which will be equal to the lesser of:

 

   

50.0% of the Purchase Volume Reference Amount (defined below) applicable to such Purchase; and

 

   

30.0% of the total aggregate number (or “volume”) of our Class A Ordinary Shares traded on the Nasdaq during the applicable Purchase Valuation Period (described below) for such Purchase.

The Purchase Volume Reference Amount for such Purchase is defined as such number of our Class A Ordinary Shares equal to the average daily trading volume of our Class A Ordinary Shares on Nasdaq for the 10 consecutive trading day period, ending on (and including) the trading day immediately preceding the Purchase Date for such Purchase.

The per share purchase price that the Selling Securityholder will be required to pay for the Class A Ordinary Shares in a Purchase effected by us pursuant to the Purchase Agreement, if any, will be determined by reference to the VWAP of our Class A Ordinary Shares for the applicable Purchase Valuation Period on the Purchase Date for such Purchase, which is defined in the Purchase Agreement as the period beginning at the official open (of “commencement”) of the regular trading session on Nasdaq on the applicable Purchase Date, and ending at the earliest of:

 

   

The official close of the regular trading session on Nasdaq on such Purchase Date,

 

   

Such time that the total aggregate volume of shares of our Class A Ordinary Shares traded on Nasdaq during such Purchase Valuation Period (calculated in accordance with the Purchase Agreement) reaches a threshold amount equal to the Purchase Volume Maximum, which will be determined by dividing (i) the applicable Purchase Share Amount for such Purchase by (ii) 0.30; and

 

   

Such time that the trading price of a share of our Class A Ordinary Shares on Nasdaq during the Purchase Valuation Period (calculated in accordance with the Purchase Agreement) falls below the applicable Minimum Price Threshold specified by us in the Purchase Notice for such Purchase (or a price equal to 75.0% of the closing sale price of the Class A Ordinary Shares on the trading day immediately prior to the applicable Purchase Date for such Purchase, if we do not specify a different Minimum Price Threshold for such Purchase in such Purchase Notice),

less a fixed 3.0% discount to the VWAP of the Class A Ordinary Shares for such Purchase Valuation Period (calculated in accordance with the Purchase Agreement).

Intraday Purchases

In addition to the regular Purchases described above, from and after the Commencement Date, we will also have the right, but not the obligation, subject to the continued satisfaction of conditions set forth in the Purchase Agreement, to direct the Selling Securityholder to purchase in an Intraday Purchase under the Purchase Agreement on any trading day, including the same Purchase Date on which a regular Purchase is effected (if any), a specified amount of Class A Ordinary Shares, not to exceed the applicable Intraday Purchase Maximum Amount calculated in accordance with the Purchase Agreement (such specified number of shares to be purchased by the Selling Stockholder in such Intraday Purchase, adjusted to the extent necessary to give effect to the applicable Intraday Purchase Maximum Amount and certain additional limitations set forth in the Purchase Agreement, the “Intraday Purchase Share Amount”), by the delivery to the Selling Securityholder of an irrevocable written Intraday Purchase Notice, after 10:00 a.m., Eastern time (and after the Purchase Valuation Period for any earlier regular Purchase effected on the same Purchase Date as such Intraday Purchase (if any) and

 

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the Intraday Purchase Valuation Period for the most recent prior Intraday Purchase effected on the same Purchase Date as such Intraday Purchase (if any) have ended), and prior to 1:30 p.m., Eastern time, on such Purchase Date:

 

   

the closing sale price of our Class A Ordinary Shares on the trading day immediately prior to such Purchase Date is not less than the Threshold Price (subject to adjustment as set forth in the Purchase Agreement); and

 

   

all shares of our Class A Ordinary Shares subject to all prior Purchases and prior Intraday Purchases effected by us under the Purchase Agreement have been received by the Selling Securityholder prior to the time we deliver such Intraday Purchase Notice to the Selling Securityholder.

The maximum number of our Class A Ordinary Shares that the Selling Securityholder is required to purchase in any single Intraday Purchase under the Purchase Agreement may not exceed the Intraday Purchase Maximum Amount applicable to such Purchase, which will be equal to the lesser of:

 

   

50.0% of the Purchase Volume Reference Amount applicable to such Intraday Purchase; and

 

   

30.0% of the total aggregate number (or “volume”) of our Class A Ordinary Shares traded on the Nasdaq during the applicable Intraday Purchase Valuation Period (described below) for such Intraday Purchase.

The Purchase Volume Reference Amount for such Intraday Purchase is defined as such number of our Class A Ordinary Shares equal to the average daily trading volume of our Class A Ordinary Shares on Nasdaq for the 10 consecutive trading day period, ending on (and including) the trading day immediately preceding the Purchase Date for such Intraday Purchase.

The per share purchase price that the Selling Securityholder will be required to pay for our Class A Ordinary Shares in an Intraday Purchase effected by us pursuant to the Purchase Agreement, if any, will be calculated in the same manner as in the case of a regular Purchase, except the VWAP used to determine the purchase price for the Class A Ordinary Shares to be purchased in an Intraday Purchase will be equal to the VWAP of our Class A Ordinary Shares for the applicable “Intraday Purchase Valuation Period” on the Purchase Date for such Intraday Purchase, which is defined in the Purchase Agreement as the period during the regular trading session on Nasdaq on such Purchase Date, beginning 30 minutes after the latest of:

 

   

the time that the applicable Intraday Purchase Notice is timely received by the Selling Securityholder,

 

   

the time that the Purchase Valuation Period for any prior regular Purchase effected on the same Purchase Date (if any) has ended, and

 

   

the time that the Intraday Purchase Valuation Period for the most recent prior Intraday Purchase effected on the same Purchase Date (if any) has ended,

and ending at the earliest of:

 

   

the official close of the regular trading session on Nasdaq on such Purchase Date,

 

   

such time that the total aggregate number (“volume”) of our Class A Ordinary Shares traded on Nasdaq during such Intraday Purchase Valuation Period (calculated in accordance with the Purchase Agreement) reaches the Intraday Purchase Volume Maximum for such Intraday Purchase, which will be determined by dividing (i) the applicable Intraday Purchase Share Amount for such Intraday Purchase by (ii) 0.30, and

 

   

such time that the trading price of a share of our Class A Ordinary Shares on Nasdaq during such Intraday Purchase Valuation Period (calculated in accordance with the Purchase Agreement) falls below the applicable Intraday Minimum Price Threshold specified by us in the Intraday Purchase Notice for such Intraday Purchase Notice ( or a price equal to 75.0% of the closing sale price of the Class A Ordinary Shares on the trading day immediately prior to the applicable Purchase Date for such Intraday Purchase, if we do not specify a different Minimum Price Threshold for such Purchase in such Purchase Notice),

 

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less a fixed 3.0% discount to the VWAP of the Class A Ordinary Shares for such Intraday Purchase Valuation Period (calculated in accordance with the Purchase Agreement).

We may, in our sole discretion, timely deliver multiple Intraday Purchase Notices to the Selling Securityholder prior to 1:30 p.m., Eastern time, on a single Purchase Date to effect multiple Intraday Purchases on such same Purchase Date, including the same Purchase Date on which an earlier regular Purchase was effected by us (as applicable), although we are not required to effect an earlier regular Purchase on a Purchase Date in order to effect an Intraday Purchase on such Purchase Date, provided that the Purchase Valuation Period for any such earlier regular Purchase effected on the same Purchase Date as such Intraday Purchase (if any) and the Intraday Purchase Valuation Period for the most recent prior Intraday Purchase effected on the same Purchase Date as such Intraday Purchase (if any) have ended prior to 1:30 p.m., Eastern time, on such Purchase Date, so long as all Class A Ordinary Shares subject to all prior Purchases and prior Intraday Purchases effected by us under the Purchase Agreement, including those effected earlier on the same Purchase Date as such Intraday Purchase, have been received by the Selling Securityholder prior to the time we deliver to the Selling Securityholder a new Intraday Purchase Notice to effect an Intraday Purchase on the same Purchase Date as a regular Purchase and/or Intraday Purchase effected by us earlier on such Purchase Date.

The terms and limitations that will apply to each subsequent Intraday Purchase effected on the same Purchase Date will be the same as those applicable to any earlier regular Purchase (as applicable) and any earlier Intraday Purchase effected on the same Purchase Date as such subsequent Intraday Purchase, and the per share purchase price for the Class A Ordinary Shares that we elect to sell to the Selling Securityholder in each subsequent Intraday Purchase effected on the same Purchase Date as an earlier regular Purchase (as applicable) and/or earlier Intraday Purchase effected on such Purchase Date will be calculated in the same manner as in the case of such earlier regular Purchase (as applicable) and such earlier Intraday Purchase(s) effected on the same Purchase Date as such subsequent Intraday Purchase, with the exception that the Intraday Purchase Valuation Period for each subsequent Intraday Purchase will begin and end at different times (and may vary in duration) during the regular trading session on such Purchase Date, in each case as determined in accordance with the Purchase Agreement.

In the case of Purchases and Intraday Purchases effected by us under the Purchase Agreement, if any, all share and dollar amounts used in determining the purchase price for each Class A Ordinary Share to be purchased by the Selling Securityholder in any such Purchase or Intraday Purchase (as applicable), or in determining the applicable maximum purchase share amounts or applicable volume or price threshold amounts in connection with any such Purchase or Intraday Purchase (as applicable), in each case will be equitably adjusted for any reorganization, recapitalization, noncash dividend, share split, reverse share split or other similar transaction occurring during any period used to calculate such per share purchase price, maximum purchase share amounts or applicable volume or price threshold amounts.

At or prior to 5:30 p.m., Eastern time, on the applicable Purchase Date for a Purchase and/or Intraday, the Selling Securityholder will provide us with a written confirmation for such Purchase and/or Intraday Purchase, if applicable, setting forth the applicable purchase price (both on a per share basis and the total aggregate purchase price) to be paid by the Selling Securityholder for the Class A Ordinary Shares purchased by the Selling Securityholder in such Purchase and/or Intraday Purchase, if applicable.

The payment for, against delivery of, Class A Ordinary Shares purchased by the Selling Securityholder in a Purchase and any Intraday Purchase under the Purchase Agreement will be fully settled within two trading days immediately following the applicable Purchase Date for such Purchase and Intraday Purchase, as set forth in the Purchase Agreement.

Conditions to Commencement and Each Purchase

The Selling Securityholder’s obligation to accept Purchase Notices and Intraday Purchase Notices that are timely delivered by us under the Purchase Agreement and to purchase our Class A Ordinary Shares in Purchases

 

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and Intraday Purchases under the Purchase Agreement, are subject to (i) the initial satisfaction, at the Commencement, and (ii) the satisfaction, at the applicable “VWAP Purchase Commencement Time” or “Intraday VWAP Purchase Commencement Time” (as such terms are defined in the Purchase Agreement) on the applicable Purchase Date or Additional Purchase Date for each Purchase or Additional Purchase, respectively, after the Commencement Date, of the conditions precedent thereto set forth in the Purchase Agreement, all of which are entirely outside of the Selling Securityholder’s control, which conditions include the following:

 

   

the accuracy in all material respects of the representations and warranties of the Company included in the Purchase Agreement;

 

   

the Company having performed, satisfied and complied in all material respects with all covenants, agreements and conditions required by the Purchase Agreement to be performed, satisfied or complied with by the Company;

 

   

the registration statement that includes this prospectus (and any one or more additional registration statements filed with the SEC that include Class A Ordinary Shares that may be issued and sold by the Company to the Selling Securityholder under the Purchase Agreement) having been declared effective under the Securities Act by the SEC, and the Selling Securityholder being able to utilize this prospectus (and the prospectus included in any one or more additional registration statements filed with the SEC under the Registration Rights Agreement) to resell all of the Class A Ordinary Shares included in this prospectus (and included in any such additional prospectuses);

 

   

the SEC shall not have issued any stop order suspending the effectiveness of the registration statement that includes this prospectus (or any one or more additional registration statements filed with the SEC that include Class A Ordinary Shares that may be issued and sold by the Company to the Selling Securityholder under the Purchase Agreement) or prohibiting or suspending the use of this prospectus (or the prospectus included in any one or more additional registration statements filed with the SEC under the Registration Rights Agreement), and the absence of any suspension of qualification or exemption from qualification of the Class A Ordinary Shares for offering or sale in any jurisdiction;

 

   

there shall not have occurred any event and there shall not exist any condition or state of facts, which makes any statement of a material fact made in the registration statement that includes this prospectus (or in any one or more additional registration statements filed with the SEC that include Class A Ordinary Shares that may be issued and sold by the Company to the Selling Securityholder under the Purchase Agreement) untrue or which requires the making of any additions to or changes to the statements contained therein in order to state a material fact required by the Securities Act to be stated therein or necessary in order to make the statements then made therein (in the case of this prospectus or the prospectus included in any one or more additional registration statements filed with the SEC under the Registration Rights Agreement, in the light of the circumstances under which they were made) not misleading;

 

   

this prospectus, in final form, shall have been filed with the SEC under the Securities Act prior to Commencement, and all reports, schedules, registrations, forms, statements, information and other documents required to have been filed by the Company with the SEC pursuant to the reporting requirements of the Exchange Act shall have been filed with the SEC;

 

   

trading in the Class A Ordinary Shares shall not have been suspended by the SEC or the Nasdaq, the Company shall not have received any final and nonappealable notice that the listing or quotation of the Class A Ordinary Shares on the Nasdaq shall be terminated on a date certain (unless, prior to such date, the Class A Ordinary Shares are listed or quoted on any other Eligible Market, as such term is defined in the Purchase Agreement), and there shall be no suspension of, or restriction on, accepting additional deposits of the Class A Ordinary Shares, electronic trading or book-entry services by The Depository Trust Company with respect to the Class A Ordinary Shares;

 

   

the Company shall have complied with all applicable federal, state and local governmental laws, rules, regulations and ordinances in connection with the execution, delivery and performance of the Purchase Agreement and the Registration Rights Agreement;

 

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the absence of any statute, regulation, order, decree, writ, ruling or injunction by any court or governmental authority of competent jurisdiction which prohibits the consummation of or that would materially modify or delay any of the transactions contemplated by the Purchase Agreement or the Registration Rights Agreement;

 

   

the absence of any action, suit or proceeding before any arbitrator or any court or governmental authority seeking to restrain, prevent or change the transactions contemplated by the Purchase Agreement or the Registration Rights Agreement, or seeking material damages in connection with such transactions;

 

   

all of the Class A Ordinary Shares that may be issued pursuant to the Purchase Agreement shall have been approved for listing or quotation on Nasdaq (or if the Class A Ordinary Shares is not then listed on Nasdaq, on any Eligible Market), subject only to notice of issuance;

 

   

no condition, occurrence, state of facts or event constituting a Material Adverse Effect (as such term is defined in the Purchase Agreement) shall have occurred and be continuing;

 

   

the absence of any bankruptcy proceeding against the Company commenced by a third party, and the Company shall not have commenced a voluntary bankruptcy proceeding, consented to the entry of an order for relief against it in an involuntary bankruptcy case, consented to the appointment of a custodian of the Company or for all or substantially all of its property in any bankruptcy proceeding, or made a general assignment for the benefit of its creditors; and

 

   

the receipt by the Selling Securityholder of the legal opinions and negative assurances, and bring-down legal opinions and negative assurances as required under the Purchase Agreement.

Termination of the Purchase Agreement

Unless earlier terminated as provided in the Purchase Agreement, the Purchase Agreement will terminate automatically on the earliest to occur of:

 

   

the first day of the month next following the 24-month anniversary of the Commencement Date;

 

   

the date on which the Selling Securityholder shall have purchased Class A Ordinary Shares under the Purchase Agreement for an aggregate gross purchase price equal to $471,742,855;

 

   

the date on which the Class A Ordinary Shares shall have failed to be listed or quoted on Nasdaq or any other Eligible Market;

 

   

the 30th trading day after the date on which a voluntary or involuntary bankruptcy proceeding involving our company has been commenced that is not discharged or dismissed prior to such trading day; and

 

   

the date on which the Company commences a voluntary bankruptcy case or any third party commences a bankruptcy proceeding against the Company, a custodian is appointed for the Company in a bankruptcy proceeding for all or substantially all of its property, or the Company makes a general assignment for the benefit of its creditors.

We have the right to terminate the Purchase Agreement at any time after Commencement, at no cost or penalty, upon five trading days’ prior written notice to the Selling Securityholder. We and the Selling Securityholder may also agree to terminate the Purchase Agreement by mutual written consent. In any case, no termination of the Purchase Agreement will be effective during the pendency of any Purchase that has not then fully settled in accordance with the Purchase Agreement.

The Selling Securityholder also has the right to terminate the Purchase Agreement upon five (5) trading days’ prior written notice to us, but only upon the occurrence of certain events, including:

 

   

the occurrence of a Material Adverse Effect (as such term is defined in the Purchase Agreement);

 

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the occurrence of a Fundamental Transaction (as such term defined in the Purchase Agreement) involving our company;

 

   

if we are in breach or default in any material respect of any of our covenants and agreements in the Purchase Agreement or in the Registration Rights Agreement, and, if such breach or default is capable of being cured, such breach or default is not cured within ten trading days after notice of such breach or default is delivered to us;

 

   

the effectiveness of the registration statement that includes this prospectus or any additional registration statement we file with the SEC pursuant to the Registration Rights Agreement lapses for any reason (including the issuance of a stop order by the SEC), or this prospectus or the prospectus included in any additional registration statement we file with the SEC pursuant to the Registration Rights Agreement otherwise becomes unavailable to the Selling Securityholder for the resale of all of the Class A Ordinary Shares included therein, and such lapse or unavailability continues for a period of forty consecutive trading days or for more than an aggregate of ninety trading days in any 365-day period, other than due to acts of the Selling Securityholder; or

 

   

trading in the Class A Ordinary Shares on Nasdaq (or if the Class A Ordinary Shares are then listed on an Eligible Market, trading in the Class A Ordinary Shares on such Eligible Market) has been suspended for a period of three consecutive trading days.

No termination of the Purchase Agreement by us or by the Selling Securityholder will become effective prior to the second trading day immediately following the date on which any pending Purchase has been fully settled in accordance with the terms and conditions of the Purchase Agreement, and will not affect any of our respective rights and obligations under the Purchase Agreement with respect to any pending Purchase, and both we and the Selling Securityholder have agreed to complete our respective obligations with respect to any such pending Purchase under the Purchase Agreement. Furthermore, no termination of the Purchase Agreement will affect the Registration Rights Agreement, which will survive any termination of the Purchase Agreement.

No Short-Selling or Hedging by the Selling Securityholder

The Selling Securityholder has agreed that none of the Selling Securityholder, its sole member, any of their respective officers, or any entity managed or controlled by the Selling Securityholder or its sole member will engage in or effect, directly or indirectly, for its own account or for the account of any other of such persons or entities, any (i) “short sale” (as such term is defined in Rule 200 of Regulation SHO of the Exchange Act) of our Class A Ordinary Shares or (ii) hedging transaction, which establishes a net short position with respect to our Class A Ordinary Shares, during the term of the Purchase Agreement.

Prohibition of Other Variable Rate Transactions and Similar Continuous Equity Offerings

Subject to specified exceptions included in the Purchase Agreement, we are prohibited (with certain specified exceptions) from effecting or entering into an agreement to effect certain “Variable Rate Transactions” (as defined in the Purchase Agreement), which include issuances of shares of our Class A Ordinary Shares or securities exercisable, exchangeable or convertible into shares of our Class A Ordinary Shares issued or issuable at a future-determined price or a price that varies or floats based on the market price of our Class A Ordinary Shares, including an “equity line” with a third party, or any similar continuous offering of our equity securities.

Effect of Sales of our Class A Ordinary Shares under the Purchase Agreement on our Shareholders

All Class A Ordinary Shares that may be issued or sold by us to the Selling Securityholder under the Purchase Agreement that are being registered under the Securities Act for resale by the Selling Securityholder in this offering are expected to be freely tradable. The Class A Ordinary Shares being registered for resale in this offering may be issued and sold by us to the Selling Securityholder from time to time at our discretion over a period of up to 24 months commencing on the Commencement Date. The resale by the Selling Securityholder of a significant amount of shares registered for resale in this offering at any given time, or the perception that these

 

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sales may occur, could cause the market price of our Class A Ordinary Shares to decline and to be highly volatile. Sales of our Class A Ordinary Shares, if any, to the Selling Securityholder under the Purchase Agreement will depend upon market conditions and other factors to be determined by us. We may ultimately decide to sell to the Selling Securityholder all, some or none of the Class A Ordinary Shares that may be available for us to sell to the Selling Securityholder pursuant to the Purchase Agreement.

If and when we do elect to sell Class A Ordinary Shares to the Selling Securityholder pursuant to the Purchase Agreement, after the Selling Securityholder has acquired such shares, the Selling Securityholder may resell all, some or none of such shares at any time or from time to time in its discretion and at different prices. As a result, investors who purchase shares from the Selling Securityholder in this offering at different times will likely pay different prices for those shares, and so may experience different levels of dilution and in some cases substantial dilution and different outcomes in their investment results. Investors may experience a decline in the value of the shares they purchase from the Selling Securityholder in this offering as a result of future sales made by us to the Selling Securityholder at prices lower than the prices such investors paid for their shares in this offering. In addition, if we sell a substantial number of shares to the Selling Securityholder under the Purchase Agreement, or if investors expect that we will do so, the actual sales of shares or the mere existence of our arrangement with the Selling Securityholder may make it more difficult for us to sell equity or equity-related securities in the future at a time and at a price that we might otherwise wish to effect such sales.

Because the purchase price per share to be paid by the Selling Securityholder for Class A Ordinary Shares that we may elect to sell to the Selling Securityholder under the Purchase Agreement, if any, will fluctuate based on the market prices of our Class A Ordinary Shares during the applicable Purchase Valuation Period for each Purchase made pursuant to the Purchase Agreement, if any, as of the date of this prospectus it is not possible for us to predict the number of Class A Ordinary Shares that we will sell to the Selling Securityholder under the Purchase Agreement, the actual purchase price per share to be paid by the Selling Securityholder for those shares, or the actual gross proceeds to be raised by us from those sales, if any. As of June 21, 2022, there were 118,883,073 Class A Ordinary Shares outstanding, of which 62,439,076 Class A Ordinary Shares were held by non-affiliates.

Although the Purchase Agreement provides that we may, in our discretion, from time to time after the date of this prospectus and during the term of the Purchase Agreement, direct the Selling Securityholder to purchase Class A Ordinary Shares from us in one or more Purchases under the Purchase Agreement, for a maximum aggregate purchase price of up to $471,742,855, only 102,939,766 Class A Ordinary Shares (386,971 of which represent the Commitment Shares we issued to the Selling Securityholder upon signing the Purchase Agreement as payment of a commitment fee for the Selling Securityholder’s obligation to purchase our Class A Ordinary Shares under the Purchase Agreement) are being registered for resale under the registration statement that includes this prospectus. If all of the 102,939,766 Class A Ordinary Shares offered for resale by the Selling Securityholder under this prospectus were issued and outstanding as of June 21, 2022, such shares would represent approximately 46% of the total number of our Class A Ordinary Shares outstanding and approximately 62% of the total number of outstanding Class A Ordinary Shares held by non-affiliates, in each case as of June 21, 2022. Assuming all of such 102,552,795 shares were sold to the Selling Securityholder at the 3% discount to the per share price of $4.60 (which represents the average of the high and low sale price of our Class A Ordinary Shares on Nasdaq as of April 14, 2022), such number of shares would be insufficient to enable us to receive aggregate gross proceeds from the sale of such shares to the Selling Securityholder equal to the Selling Securityholder’s $471,742,855 total aggregate purchase commitment under the Purchase Agreement. However, because the market price of our Class A Ordinary Shares may fluctuate from time to time after the date of this prospectus and, as a result, the actual purchase prices to be paid by the Selling Securityholder for Class A Ordinary Shares that we direct it to purchase under the Purchase Agreement, if any, also may fluctuate because they will be based on such fluctuating market price of our Class A Ordinary Shares, it is possible that we may need to issue and sell more than the number of shares being registered for resale under this prospectus to the Selling Securityholder under the Purchase Agreement in order to receive aggregate gross proceeds equal to the Selling Securityholder’s $471,742,855 total aggregate purchase commitment under the Purchase Agreement.

 

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If it becomes necessary for us to issue and sell to the Selling Securityholder under the Purchase Agreement more shares than are being registered for resale under this prospectus in order to receive aggregate gross proceeds equal to $471,742,855 under the Purchase Agreement, we must first file with the SEC one or more amendments to the registration statement of which this prospectus forms a part or additional registration statements to register under the Securities Act the resale by the Selling Securityholder of any such additional Class A Ordinary Shares we wish to sell from time to time under the Purchase Agreement, which the SEC must declare effective, in each case before we may elect to sell any additional Class A Ordinary Shares to the Selling Securityholder under the Purchase Agreement. The number of Class A Ordinary Shares ultimately offered for sale by the Selling Securityholder is dependent upon the number of Class A Ordinary Shares, if any, we ultimately sell to the Selling Securityholder under the Purchase Agreement.

The number of Class A Ordinary Shares ultimately offered for resale by the Selling Securityholder through this prospectus is dependent upon the number of Class A Ordinary Shares, if any, we elect to sell to the Selling Securityholder under the Purchase Agreement from and after the Commencement Date. The issuance of our Class A Ordinary Shares, if any, we elect to sell to the Selling Securityholder pursuant to the Purchase Agreement will not affect the rights or privileges of our existing shareholders, except that the economic and voting interests of each of our existing shareholders will be diluted. Although the number of Class A Ordinary Shares that our existing shareholders own will not decrease, the Class A Ordinary Shares owned by our existing shareholders will represent a smaller percentage of our total outstanding Class A Ordinary Shares after any such issuance and sale of Class A Ordinary Shares by the Company to the Selling Securityholder pursuant to the Purchase Agreement.

The following table sets forth the amount of gross proceeds we would receive from the Selling Securityholder from our sale of shares of our Class A Ordinary Shares to the Selling Securityholder under the Purchase Agreement at varying purchase prices:

 

Assumed Average Purchase
Price Per Share
 

Number of Registered Shares
to be Issued if Full

Purchase (1)

    Percentage of Outstanding
Shares After Giving Effect to
the Issuance to the Selling
Securityholder (2)
    Gross Proceeds from the Sale
of Shares to the Selling
Securityholder Under the
Purchase Agreement
 

$3.00

    102,552,795       46   $ 298,428,633  

$4.00

    102,552,795       46   $ 397,904,844  

$5.00

    94,348,571       44   $ 471,742,855  

$6.00

    78,623,809       40   $ 471,742,855  

$6.45(3)

    73,138,427       38   $ 471,742,855  

 

(1)

Does not include the 386,971 Commitment Shares that we issued to the Selling Securityholder as consideration for its commitment to purchase Class A Ordinary Shares under the Agreement. The number of Class A Ordinary Shares offered by this prospectus may not cover all the shares we ultimately sell to the Selling Securityholder under the Purchase Agreement, depending on the purchase price per share. We have included in this column only those shares being offered for resale by the Selling Securityholder under this prospectus (excluding the 386,971 Commitment Shares), without regard for the Beneficial Ownership Limitation. The assumed average purchase prices are solely for illustration and are not intended to be estimates or predictions of future share performance.

(2)

The denominator is based on 118,883,073 shares outstanding as of June 21, 2022 (which includes the 386,971 Commitment Shares we issued to the Selling Securityholder on April 6, 2022), adjusted to include the issuance of the number of shares set forth in the second column that we would have sold to the Selling Securityholder, assuming the average purchase price in the first column. The numerator is based on the number of Class A Ordinary Share set forth in the second column.

(3)

The average of the high and low sale price of our Class A Ordinary Shares on Nasdaq on June 21, 2022.

 

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CAPITALIZATION AND INDEBTEDNESS

The following table sets forth the capitalization of the Company on an actual basis and on an unaudited pro forma combined basis, in each case as of December 31, 2021, after giving effect to the Business Combination, the PIPE Subscription Agreements funded upon consummation of the Business Combination and the Swvl Exchangeable Notes.

The information in this table should be read in conjunction with the financial statements and notes thereto and other financial information included in this prospectus or any prospectus supplement. Our historical results do not necessarily indicate our expected results for any future periods.

 

    As of December 31, 2021  
    Actual     Pro Forma  
    (U.S. Dollars in millions)  

Cash and cash equivalents

  $ 9.5     $ 95.7  

Debt:

   

Loans and borrowings (non-current)

  $ —       $ —    

Loans and borrowings (current)

  $ 75.1     $ 0.5  

Total indebtedness

  $ 75.1     $ 0.5  
 

 

 

   

 

 

 

Total Class A Ordinary Shares and Shareholders’ equity / (net deficit)

  $ (89.8   $ 191.4  
 

 

 

   

 

 

 

Total capitalization

  $ (14.7   $ 190.9  
 

 

 

   

 

 

 

 

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UNAUDITED PRO FORMA CONDENSED COMBINED FINANCIAL INFORMATION

The following unaudited pro forma condensed combined financial information has been prepared in accordance with Article 11 of Regulation S-X, Pro Forma Financial Information, as amended by the final rule, Release No. 33-10786 “Amendments to Financial Disclosures about Acquired and Disposed Businesses”, and presents the combination of the historical financial information of SPAC and Legacy Swvl adjusted to give effect to the Business Combination, including other events in connection with the Business Combination as summarized below. For purposes of this section entitled “Unaudited Pro Forma Condensed Combined Financial Information”, unless otherwise stated or the context otherwise requires, “Swvl” refers to Swvl Inc., “Holdings” refers to Swvl Holdings Corp, and capitalized terms used in this section but not defined elsewhere in this prospectus have the meanings ascribed to them in our Registration Statement on Form F-4, which was filed with the SEC on March 11, 2022.

The unaudited pro forma condensed combined balance sheet as of December 31, 2021 combines the historical audited consolidated balance sheet of SPAC as of December 31, 2021 and the historical audited consolidated balance sheet of Swvl Inc. as of December 31, 2021 on a pro forma basis as if the Business Combination, including the other events in connection with the Business Combinations summarized below, had been consummated on December 31, 2021.

The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2021 combines the historical audited consolidated statement of operations of SPAC for the year ended December 31, 2021 and the historical audited consolidated statement of operations of Swvl Inc. for the year ended December 31, 2021 on a pro forma basis as if the Business Combination, including the other events in connection with the Business Combination, as summarized below, had been consummated on January 1, 2021.

The unaudited pro forma condensed combined financial information does not give effect to the issuance of any Class A Ordinary Shares that have been or may be issued and sold to the Selling Securityholder, including the Commitment Shares and any Class A Ordinary Shares that we may, at our election and sole discretion from time to time after the date of this prospectus, issue and sell to the Selling Securityholder pursuant to the Purchase Agreement.

The unaudited pro forma condensed combined financial information was derived from and should be read in conjunction with the following historical financial statements and the accompanying notes:

 

   

the historical audited consolidated financial statements of SPAC as of and for the year ended December 31, 2021, included herein;

 

   

the historical audited consolidated financial statements of Swvl Inc. as of and for the year ended December 31, 2021, included herein.

The unaudited pro forma condensed combined financial information has been presented for illustrative purposes only and is not necessarily indicative of the financial position and results of operations that would have been achieved had the Business Combination and related transactions occurred on the dates indicated. Further, the unaudited pro forma condensed combined financial information may not be useful in predicting the future financial condition and results of operations of Holdings. The actual financial position and results of operations may differ significantly from the pro forma amounts reflected herein due to a variety of factors.

The unaudited pro forma adjustments represent management’s estimates based on information available as of the preparation date of the unaudited pro forma condensed combined financial information and are subject to change as additional information becomes available and analysis is performed. This information should be read together with Swvl’s and SPAC’s historical financial statements and related notes thereto, as applicable, and the section of this prospectus entitled “Operating and Financial Review and Prospects”.

Description of the Business Combination

On July 28, 2021, SPAC, Swvl, Holdings, Cayman Merger Sub and BVI Merger Sub entered into the Business Combination Agreement, which subsequently closed on March 31, 2022. Pursuant to the Business Combination

 

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Agreement, and subject to the terms and conditions contained therein, the Business Combination was effected in four steps: (a) in accordance with the Cayman Companies Act at the SPAC Merger Effective Time, SPAC merged with and into Cayman Merger Sub, with Cayman Merger Sub surviving the SPAC Merger and becoming the sole owner of BVI Merger Sub; (b) concurrently with the consummation of the SPAC Merger, and subject to the BVI Companies Act, Holdings redeemed each Holdings Common Share A and each Holdings Common Share B issued and outstanding immediately prior to the SPAC Merger for par value, (c) following the SPAC Merger and subject to the Cayman Companies Act and the BVI Companies Act, the SPAC Surviving Company distributed all of the issued and outstanding BVI Merger Sub Common Shares to Holdings, and (d) following the BVI Merger Sub Distribution, BVI Merger Sub merged with and into Swvl, with Swvl surviving the Company Merger as a wholly owned Subsidiary of Holdings.

The following are the key steps within the Business Combination:

SPAC Merger

At the SPAC Merger Effective Time, which occurred on March 30, 2022, one business day prior to the Company Merger:

 

   

by virtue of the SPAC Merger and without any action on the part of SPAC, Cayman Merger Sub, BVI Merger Sub, Swvl, Holdings or the holders of any of the following securities:

 

   

each then-outstanding Cayman Merger Sub Common Share was automatically converted into one share of the SPAC Surviving Company, which constitutes the only outstanding shares of the SPAC Surviving Company;

   

each then-outstanding SPAC Class A Ordinary Share was automatically cancelled, extinguished and converted into the right to receive one Holdings Common Share A; and

 

   

each then-outstanding SPAC Class B Ordinary Share was automatically cancelled, extinguished and converted into the right to receive one Holdings Common Share B.

 

   

each then-outstanding fraction of or whole SPAC Warrant was automatically assumed and converted into a fraction or whole Holdings Warrant, as the case may be, to acquire (in the case of a whole Holdings Warrant) one Holdings Common Share A, subject to the same terms and conditions (including exercisability terms) as were applicable to the corresponding former SPAC Warrants; and

 

   

without duplication of the foregoing, each then-outstanding SPAC Unit, comprised of one SPAC Class A Ordinary Share and one-third of one SPAC Warrant, was automatically cancelled, extinguished and converted into a new Holdings Unit, comprised of one Holdings Common Share A and one-third of one Holdings Warrant.

Company Merger

At the Company Merger Effective Time on March 31, 2022:

 

   

by virtue of the Company Merger and without any action on the part of Cayman Merger Sub, BVI Merger Sub, Swvl, Holdings or the holders of any of the following securities:

 

   

each then-outstanding BVI Merger Sub Common Share was automatically cancelled, extinguished and converted into one share no par value in the Swvl Surviving Company, which constitutes the only issued and outstanding shares of the Swvl Surviving Company;

 

   

all Swvl Shares held in the treasury of Swvl were automatically cancelled and extinguished, and no consideration was delivered in exchange therefor; and

 

   

each then-outstanding Swvl Share was automatically cancelled, extinguished and converted into the right to receive a number of Holdings Common Shares A equal to the Exchange Ratio and upon an Earnout Triggering Event (or the date on which a Change of Control occurs), the

 

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Per Share Earnout Consideration (with any fractional share to which any holder of Swvl Shares would otherwise be entitled rounded down to the nearest whole share), in each case, without interest;

 

   

each then-outstanding and unexercised Swvl Option, whether or not vested, was assumed and converted into (i) an Exchanged Option and (ii) a number of Earnout RSUs in respect of a number of Earnout RSU Shares that will be issued in settlement of Earnout RSUs, as described in the section entitled “Earnouts” below, equal to the number of Swvl Common Shares B subject to such Swvl Option (assuming payment in cash of the exercise price of such Swvl Option) immediately prior to the Company Merger Effective Time multiplied by the Per Share Earnout Consideration;

 

   

the Swvl Convertible Notes, other than any Swvl Exchangeable Notes, were converted into the right to receive Holdings Common Shares A as if such Swvl Convertible Notes had first converted into Swvl Common Shares A in accordance with their terms immediately prior to the Company Merger Effective Time and immediately thereafter each such Swvl Common Share A was cancelled, extinguished and converted into the right to receive a number of Holdings Common Shares A equal to the Exchange Ratio;

 

   

each Swvl Exchangeable Note was exchanged for a number of Holdings Common Shares A at an exchange price of $8.50 per share (or, (1) with respect to the $20.0 million Swvl Exchangeable Note issued on January 12, 2022 and the $1.0 million Swvl Exchangeable Note issued to R Capital, LLC on January 31, 2022, $9.10 per share and (2) with respect to the $1.8 million Swvl Exchangeable Note and $0.9 million Swvl Exchangeable Note issued on March 22, 2022 and the $2.7 million Swvl Exchangeable Note issued on March 23, 2022, $9.50 per share);

 

   

in accordance with the Holdings A&R Articles, each then-outstanding Holdings Common Share B was converted, on a one-for-one basis, into one Holdings Common Share A; and

 

   

pursuant to their terms, the Holdings Common Shares A and the Holdings Warrants comprising each existing and outstanding Holdings Unit immediately prior to the Company Merger Effective Time were automatically separated in accordance with the Holdings A&R Articles.

Concurrently with the execution of the Business Combination Agreement, SPAC, Holdings and in some cases, Swvl entered into the Initial PIPE Subscription Agreements with the Initial PIPE Investors, pursuant to which the Initial PIPE Investors agreed to subscribe for and purchase, and Holdings agreed to sell to the Initial PIPE Investors in a private placement at the Company Merger Effective Time, Holdings Common Shares A for a purchase price of $10.00 per share, representing an aggregate purchase price of $100 million.

On August 25, 2021, certain Initial PIPE Investors effectively pre-funded Swvl with $35.5 million of the aggregate subscription commitments by purchasing the Initial Swvl Exchangeable Notes. At the Company Merger Effective Time, the Initial Swvl Exchangeable Notes were automatically exchanged for Holdings Common Shares A at an exchange Price of $8.50 per share. Upon the issuance of the Initial Swvl Exchangeable Notes, the amount of each applicable Initial PIPE Investor’s subscription was reduced dollar-for-dollar by the aggregate purchase price of such Initial PIPE Investor’s Initial Swvl Exchangeable Notes. On January 12, 2022, an Initial PIPE Investor affiliated with Agility purchased $20.0 million of Additional Swvl Exchangeable Notes, effectively pre-funding the remainder of its subscription commitment. Such Additional Swvl Exchangeable Notes were automatically exchanged for Holdings Common Shares A at an exchange price of $9.10 per share. Upon the issuance of such Additional Swvl Exchangeable Notes, such Initial PIPE Investor’s subscription was reduced by $20.0 million, resulting in the termination of such subscription.

As a result of the issuance of the Initial Swvl Exchangeable Notes and the Additional Swvl Exchangeable Notes, the amount of additional funding actually received from the Initial PIPE Investors at the Company Merger Effective Time was reduced to $44.5 million which was further impacted by Additional PIPE Subscription Agreements as described below

 

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Following the issuance of the Initial Swvl Exchangeable Notes and prior to the issuance of the Additional Swvl Exchangeable Notes described above, Swvl also issued $10.0 million of Additional Swvl Exchangeable Notes, at an exchange price of $8.50 per share. On January 31, 2022, Swvl issued $1.0 million of Additional Swvl Exchangeable Notes at an exchange price of $9.10 per share. The issuance of such Additional Swvl Exchangeable Notes did not reduce the existing subscription commitments of any PIPE Investors. Furthermore, between March 22, 2022 and March 23, 2022, certain Initial PIPE investors purchased Additional Swvl Exchangeable Notes for an aggregate purchase price of $5.3 million, equal to their remaining aggregate subscription commitment. Upon the issuance of such Additional Swvl Exchangeable Notes, these Initial PIPE Investors’ subscription commitments were collectively reduced by $5.3 million, resulting in the termination of their subscriptions and reducing the funding actually received from the Initial PIPE Investors at the Company Merger Effective Time by $5.3 million. These Additional Swvl Exchangeable Notes were automatically exchanged for Holdings Common Shares A at an exchange price of $9.50 per share at the Company Merger Effective Time.

In aggregate, Swvl has issued $35.5 million of Initial Swvl Exchangeable Notes at $8.50 per share, $10.0 million of Additional Swvl Exchangeable Notes at $8.50 per share, $21.0 million of Additional Swvl Exchangeable Notes at an exchange price of $9.10 per share and $5.3 million of Additional Swvl Exchangeable Notes at an exchange price of $9.50 per share in advance of the Company Merger. In aggregate, the funding received from the issue of Initial Swvl Exchangeable Notes and Additional Swvl Exchangeable Notes in advance of the Company Merger Effective Time amounted to approximately $71.8 million.

Since November 15, 2021, SPAC and Holdings have also entered into Additional PIPE Subscription Agreements with Additional PIPE Investors, pursuant to which the Additional PIPE Investors have agreed to purchase, and Holdings has agreed to sell to the Additional PIPE Investors in a private placement, Holdings Common Shares A for a purchase price of $10.00 per share, representing an aggregate purchase price of $10.5 million, of which $0.5 million was received by Holdings at the Company Merger Effective Time. In aggregate, the funding received from the Initial PIPE Investors and Additional PIPE investors at the Company Merger Effective Time amounted to $39.7 million which excludes the EBRD subscription agreement, as discussed below.

While the terms of the Additional PIPE Subscription Agreements are substantially similar to the Initial PIPE Subscription Agreements, one Additional PIPE Subscription Agreement contains terms that vary as described below.

Under the terms of the Additional PIPE Subscription Agreement between EBRD, SPAC and Holdings, representing an aggregate purchase price of $10.0 million, EBRD’s commitment to acquire Holdings Common Shares A is subject to an additional condition that Holdings and EBRD first enter into an investment framework agreement, pursuant to which Holdings will agree to comply with certain institutional requirements of EBRD, including social and environmental policies and practices, certain corporate governance and compliance matters and use of proceeds (the “Additional EBRD Condition”). Based on initial discussions, Holdings expects such agreement to be generally consistent with other similar agreements previously executed between EBRD and other companies and include, among other things, a requirement to: (1) maintain procedures designed to prevent money laundering, terrorism financing, fraud or other corrupt or illegal purposes, (2) implement a contractor and supplier management system to assess and monitor environmental and social risks, (3) conduct a gender based violence and harassment risk assessment related to business operations in Egypt, (4) conduct awareness training among management, workers and contractors, (5) establish an internal worker grievance procedure, (6) appoint key account managers to monitor the health and safety performance of partner drivers / captains, (7) use the proceeds from the subscription agreement exclusively for the purpose of operating expenditures, marketing expenses and client acquisition costs relating to Swvl’s business in Egypt, (8) comply with other compliance measures and (9) furnish information to EBRD in connection with the foregoing matters.

Further, EBRD will be permitted to terminate its Additional PIPE Subscription Agreement if the Board of Governors of EBRD determines that access by Egypt to EBRD’s resources should be suspended or otherwise

 

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modified. This termination right is a result of the nature of EBRD’s organization and governing documents. EBRD is an international financial institution formed by an international multilateral treaty and is owned by 71 countries. Under the agreement establishing EBRD, the Board of Governors of EBRD has the authority to decide that access to EBRD’s funds to a particular country should be suspended or otherwise modified in cases where such country might be implementing policies inconsistent with EBRD’s mandate. EBRD has advised Holdings that it is accordingly a standard provision of EBRD financing agreements to include a termination right similar to the right included in the Additional PIPE Subscription Agreement with EBRD.

Because the Additional EBRD Condition was not satisfied prior to the Company Merger Effective Time, EBRD has not purchased $10.0 million of Holdings Common Shares A at the Company Merger Effective Time pursuant to the EBRD subscription agreement. Pursuant to the EBRD subscription agreement, either Swvl or EBRD may each elect to terminate the EBRD subscription agreement because the investment framework agreement was not entered into on or prior to May 25, 2022. As of the date of this prospectus such subscription agreement has not been terminated and negotiations of such agreement between the parties are ongoing, but any delay or failure to enter into such agreement or any other reason may result in Swvl or EBRD electing to terminate the EBRD subscription agreement.

The aggregate number of Holdings Common Shares A issued in connection with the PIPE Subscription Agreements, Initial Swvl Exchangeable Notes and Additional Swvl Exchangeable Notes as of the Closing Date, was 12,188,711.

Therefore, as a result of the Business Combination, Swvl Shareholders, SPAC Public Shareholders and the PIPE Investors received Holdings Common Shares A as per the table included below under “Basis of Pro Forma Presentation”, in addition to the 17,433,333 Holdings Warrants that were issued to the holders of SPAC Public Warrants and SPAC Private Placement Warrants.

Furthermore, section 8.03(f) of the Business Combination Agreement (the “Minimum Cash Condition”) provides that the obligation of Swvl to consummate the Business Combination is conditioned on SPAC and Holdings collectively having cash on hand equal to or in excess of $185.0 million after consummation of the PIPE Financing and after the distribution of the funds in the Trust Account (and deducting all amounts to be paid pursuant to the exercise of redemption rights of SPAC Public Shareholders) and without taking into account (i) any transaction fees, costs and expenses paid or required to be paid (including Swvl Expenses and SPAC Expenses) in connection with the transactions contemplated by the Business Combination Agreement and the PIPE Financing or (ii) any cash held by Swvl or any of Swvl’s Subsidiaries. As of the Closing Date after taking into account the redemption of 29,175,999 SPAC Class A Ordinary Shares, the cash on hand is less than Minimum Cash Condition. However, Swvl waived the Minimum Cash Condition and proceeded with the consummation of the Business Combination.

Earnouts

During the Earnout Period, Holdings may issue up to an aggregate of 15,000,000 additional Holdings Common Shares A to Eligible Swvl Equityholders in three equal tranches upon the occurrence of each Earnout Triggering Event (or earlier on Change of Control). The portion of such Holdings Common Shares A issuable to Eligible Swvl Equityholders who hold Swvl Options were instead issued to such holders as Earnout RSUs at the Company Merger Effective Time, which will be subject to potential forfeiture and which will be able to be settled in Holdings Common Shares A upon the occurrence of the applicable Earnout Triggering Events (or earlier Change of Control). Please see Note 34.4 to Swvl’s historical audited consolidated financial statements included herein for additional information.

Anticipated Accounting Treatment

The Business Combination is accounted for as a reverse recapitalization. Under this method of accounting, SPAC is treated as the “acquired” company for financial reporting purposes. Accordingly, the Business

 

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Combination is treated as the equivalent of Swvl issuing shares at the closing of the Business Combination for the net assets of SPAC as of the date of closing of the Business Combination, accompanied by a recapitalization. The net assets of SPAC are stated at historical cost, with no goodwill or other intangible assets recorded.

Swvl has been determined to be the accounting acquirer based on the following:

 

   

Swvl’s shareholders have the largest voting interest in Holdings as described below under “Basis of Pro Forma Presentation”;

 

   

Swvl has the ability to nominate the majority of the members of the board of directors of Holdings;

 

   

The prior senior management of Swvl constitutes the senior management of Holdings;

 

   

The business of Swvl comprises the ongoing operations of Holdings; and

 

   

Swvl is the larger entity, both in terms of substantive operations and number of employees.

The Business Combination is not within the scope of IFRS 3, Business Combinations (“IFRS 3”) because SPAC does not meet the definition of a business in accordance with IFRS 3. Rather, the Business Combination is accounted for within the scope of IFRS 2, Share-based Payment (“IFRS 2”). Any excess of fair value of equity in Holdings issued to participating shareholders of SPAC over the fair value of SPAC’s identifiable net assets acquired represents compensation for the service of a stock exchange listing, which is expensed as incurred. The fair value of Holdings equity, and ultimately the expense recognized in accordance with IFRS 2, may differ materially from the unaudited pro forma condensed combined financial information, due to developments occurring prior to the date of consummation of the Business Combination.

The PIPE Subscription Agreements related to the PIPE Financing resulted in the issuance of Holdings Common Shares A, leading to an increase in share capital and share premium along with a corresponding increase in cash and cash equivalents reflecting the PIPE Funds.

Basis of Pro Forma Presentation

Pursuant to SPAC’s existing charter, SPAC Public Shareholders were offered the opportunity to redeem, upon closing of the Business Combination, SPAC Class A Ordinary Shares held by them for cash equal to their pro rata share of the aggregate amount on deposit in the Trust Account. The unaudited pro forma condensed combined financial statements reflect the actual redemption of 29,175,999 shares of SPAC Class A Ordinary Shares at approximately $10.00 per share.

Upon closing, the ownership of Holdings is as follows:

 

Shareholders

   Ownership in
shares
     Ownership %  

Swvl Shareholders (1)

     92,358,389        78

SPAC Public Shareholders

     5,324,001        5

Sponsor (2)

     8,625,000        7

PIPE Investors

     12,188,711        10

Grand Total

     118,496,101        100

 

1)

The shareholding of Swvl excludes the impact of shares issuable under the earnout arrangement. In aggregate, a maximum of 15,000,000 Holdings Common Shares A are issuable to Eligible Swvl Equityholders upon the occurrence of Earnout Triggering Events (i.e. achieving a share price of $12.50 (Triggering Event I), $15.00 (Triggering Event II) and $17.50 (Triggering Event III)) or earlier upon the Change of Control. Furthermore this number of shares also includes cash exercise of the Swvl Options by the Swvl Option Holders against which they are entitled to receive Holdings Common Shares A.

2)

Consists of 8,625,000 of Holdings Common Shares A acquired by the Sponsor as holder of SPAC Class B Ordinary Shares in connection with the Business Combination.

 

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The pro forma book value per share as of December 31, 2021, assuming the share ownership amounts above, are as follows:

 

     (in thousands,
except per
share data)
 

Total equity

   $ 191,486  

Book value per share

   $ 1.60  

Net asset increase from exercise of warrants(1)

   $ 200,483  

Resulting net assets

   $ 391,969  

Increased number of shares(2)

     135,929  

Implied book value per share(3)

     2.88  

 

(1)

The net assets after the exercise of warrants are calculated as (i) net assets prior to the exercise of warrants; plus (ii) increase to the net assets resulting from the inflow of cash from the exercise of a total of 17,433,333 warrants including 11,500,000 SPAC Public Warrants and 5,933,333 SPAC Private Placement Warrants at an exercise price of $11.50 per share.

(2)

This reflects the total number of outstanding shares including the shares issued upon the exercise of the SPAC Public Warrants and SPAC Private Placement Warrants.

(3)

Book value per share equals net assets after exercise of the SPAC Public Warrants and SPAC Private Placement Warrants divided by total shares outstanding including the shares issued upon the exercise of SPAC Public Warrants and SPAC Private Placement Warrants.

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF FINANCIAL POSITION

AS OF DECEMBER 31, 2021

(in USD thousands)

 

     Swvl (IFRS)      Queen’s Gambit
(US GAAP)
     IFRS Policy and
Presentation
Alignment
     Transaction
Accounting
Adjustments
    TM      Pro forma
Combined
 

ASSETS

                

Current assets

                

Current financial assets

     10,001        —          —          —            10,001  

Deferred transaction cost

     7,355        —          —          (7,355     J        —    

Trade and other receivables

     6,603        —          —          —            6,603  

Prepaid expenses and other current assets

     1,103        520        —          —            1,623  

Due from related party

     —          26        —          —            26  

Advances to shareholders

     —          —          —          —            —    

Cash and cash equivalents

     9,530        675        —          345,092       A        95,687  
              66,000       D     
              (291,838     F     
              13,695       I     
              (37,471     J     
              (9,996     K     

Total current assets

     34,592        1,221        —          78,127          113,940  

Property and equipment

     649        —          —          —            649  

Intangible assets

     988        —          —          —            988  

Investments held in Trust Account

     —          345,092        —          (345,092     A        —    

Goodwill

     4,418        —          —          —            4,418  

Lease right—of—use assets

     4,060        —          —          —            4,060  

Deferred tax assets

     14,632        —          —          —            14,632  

Total Assets

     59,339        346,313        —          (266,965        138,687  

Liabilities and Equity

                

Current liabilities

                

Derivatives liabilities

     44,330        —          —          (44,330     B        —    

Convertible notes

     74,606        —          —          (29,107     B        —    
              (45,500     C     

Accounts payable, accruals and other payables

     23,606        8,219        —          (7,355     J        24,470  

Current tax liabilities

     679        —          —          —            679  

Loans from a related party

     479        —          —          —            479  

Interest—bearing loans

     60        —          —          —            60  

Lease liabilities

     1,201        —          —          —            1,201  

Total current liabilities

     144,963        8,219        —          (126,292        26,890  

Provision for employees’ end of service benefits

     815        —          —          —            815  

Deferred underwriting commissions

     —          9,996        —          (9,996     K        —    

Derivative warrant liabilities

     —          33,813        —          1,674       E        35,487  

Class A ordinary shares,—.0001 par value; 30,330,143 shares subject to possible redemption at $10.00 per share

     —          —          345,000        (53,162     E        —    
              (291,838     F     

 

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Table of Contents
     Swvl (IFRS)     Queen’s Gambit
(US GAAP)
    IFRS Policy and
Presentation
Alignment
    Transaction
Accounting
Adjustments
    TM      Pro forma
Combined
 

Earnout liabilities

     —         —         —         (119,290     G        (119,290

Interest—bearing loans

     338       —         —         —            338  

Lease liabilities

     2,961       —         —         —            2,961  

Total liabilities

     149,077       52,029       345,000       (598,905        (52,799

EQUITY

             

Class A ordinary shares subject to possible redemption,—.0001 par value; 34,500,000 shares and 0 shares at a $10.00 per share redemption value for December 31, 2021 and 2020, respectively

     —         345,000       (345,000     —            —    

Preference shares,—.0001 par value; 5,000,000 shares authorized; none issued or outstanding as of December 31, 2021 and December 31, 2020

     —         —         —         —            —    

Class A ordinary shares,—.0001 par value; 500,000,000 shares authorized; no non—redeemable issued or outstanding

     —         —         —         —            —    

Class B ordinary shares,—.0001 par value; 50,000,000 shares authorized; 8,625,000 shares issued and outstanding as of December 31, 2021, and December 31, 2020

     —         1       —         (1     E        —    

Additional paid—in capital

     —         —         —         —            —    

Accumulated deficit

     —         (50,716     —         50,716       E        —    

Share Capital (Swvl Holdings Corp)

         —         1       B        13  
           1       C     
           1       D     
           1       H     
           9       I     

Share premium

         —         73,013       B        595,364  
           45,499       C     
           65,999       D     
           2,446       E     
           119,290       G     
           120,303       H     
           186,979       I     
           (18,165     J     

Share capital

     88,882       —         —         (88,882     I        —    

Employee share scheme reserve

     36,930       —         —         (36,930     I        —    

Foreign currency translation reserve

     451       —         —         —            451  

Accumulated deficit

     (216,066     —         —         424       B        (404,409
           (1,674     E     
           —         G     
           (120,305     H     

 

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Table of Contents
     Swvl (IFRS)     Queen’s Gambit
(US GAAP)
    IFRS Policy and
Presentation
Alignment
     Transaction
Accounting
Adjustments
    TM      Pro forma
Combined
 
            (47,482     I     
            (19,305     J     

(Deficit)/equity attributable to equity holders of the Parent Company

     (89,804     (50,716     —          331,939          191,419  

Non—controlling interests

     66       —                 66  

(Deficit)/Total equity

     (89,738     (50,716     —          331,939          191,486  

Total equity and liabilities

     59,339       346,313       —          (266,966        138,687  

 

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UNAUDITED PRO FORMA CONDENSED COMBINED STATEMENT OF OPERATIONS FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2021

(in USD thousands)

 

     Swvl (IFRS)     Queen’s Gambit (US
GAAP)
    Transaction
Accounting
Adjustments
    TM      Pro forma  

Revenue

     38,345       —         —            38,345  

Cost of sales

     (48,923     —         —            (48,923

Gross loss

     (10,578     —         —            (10,578

General and administrative expenses

     (74,719     (9,537     (19,305     AA        (261,850
         (120,303     BB     
         (29,258     CC     
         (8,728     FF     

General and administrative expense—related party

     —         (200     —            (200

Selling and marketing costs

     (13,715     —         (7,314     CC        (13,715
         (2,182     FF     

Provision for expected credit losses

     (1,327     —         —            (1,327

Other expenses, net

     (177     —         —            (177

Operating loss

     (100,516     (9,737     (187,091        (297,344

Finance income

     182       —         —            182  

Change in fair value of derivative warrant liabilities

     —         (8,856     —            (8,856

Financing costs—derivative warrant liabilities

     —         (488     —            (488

Loss on issuance of private placement warrants

     —         (6,052     —            (6,052

Interest Income

     —         —         —            —    

Income from investments held in the Trust Account

     —         92       (92     EE        —    

Finance cost

     (45,873       45,737       DD        (136

Loss before tax

     (146,207     (25,041     (141,446        (312,694

Income tax benefit

     4,718       —         —            4,718  

Loss for the year

     (141,489     (25,041     (141,446        (307,976

Loss per share attributable to equity holders of the Parent Company

           

Basic

     (2,504         

Diluted

     (2,504         

Weighted average shares outstanding (in thousands)

              118,496,101  

Net (loss) per share ($) (Basic and diluted)

              (2.60

 

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NOTES TO UNAUDITED PRO FORMA CONDENSED COMBINED

FINANCIAL INFORMATION

 

1.

Basis of Presentation

The unaudited pro forma condensed combined statement of financial position as of December 31, 2021 assumes that the Business Combination occurred on December 31, 2021. The unaudited pro forma condensed combined statement of operations for the year ended December 31, 2021 presents pro forma effect to the Business Combination as if it had been completed on January 1, 2021. These periods are presented on the basis that Swvl Inc. is the accounting acquirer.

The unaudited pro forma condensed combined statement of financial position as of December 31, 2021 has been prepared using, and should be read in conjunction with, the following:

 

   

the historical audited consolidated financial statements of SPAC as of and for the year ended December 31, 2021, included herein;

 

   

the historical audited consolidated financial statements of Swvl Inc. as of and for the year ended December 31, 2021, included herein.

The historical financial statements of Swvl have been prepared in accordance with IFRS. The historical financial statements of SPAC have been prepared in accordance with US GAAP. The historical financial information of SPAC has been adjusted to give effect to the differences between US GAAP and IFRS for the purposes of the unaudited pro forma condensed combined financial information. The presentation and reporting currency of both Swvl and SPAC is the US Dollar.

The adjustments presented in the unaudited pro forma condensed combined financial information have been identified and presented to provide relevant information necessary for an accurate understanding of Holdings after giving effect to the Business Combination and related transactions.

Management has made significant estimates and assumptions in its determination of the pro forma adjustments based on information available as of the date of this filing. As the unaudited pro forma condensed combined financial information has been prepared based on these preliminary estimates, the final amounts recorded may differ materially from the information presented as additional information becomes available. Adjustments in the unaudited pro forma condensed combined financial information, which are described in the accompanying notes, may be revised as additional information becomes available and is evaluated. Therefore, it is likely that the actual adjustments will differ from the pro forma adjustments and it is possible the difference may be material. The Company believes that its assumptions and methodologies provide a reasonable basis for presenting all of the significant effects of the Business Combination based on information available to management at this time and that the pro forma adjustments give appropriate effect to those assumptions and are properly applied in the unaudited pro forma condensed combined financial information.

The unaudited pro forma condensed combined financial information is not necessarily indicative of what the actual results of operations and financial position would have been had the Business Combination and related transactions taken place on the dates indicated, nor are they indicative of the future consolidated results of operations or financial position of the post-combination company. They should be read in conjunction with the historical financial statements and notes thereto of Swvl and SPAC.

 

2.

IFRS Policy and Presentation Alignment

The unaudited pro forma condensed combined financial information includes an adjustment to the historical financial information of SPAC to give effect to the differences between US GAAP and IFRS. The adjustment reclassifies SPAC Class A Ordinary Shares, subject to redemption from equity under US GAAP to non-current financial liabilities under IFRS.

 

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3.

Adjustments to Unaudited Pro Forma Condensed Combined Financial Information

The transaction accounting adjustments included in the unaudited pro forma condensed combined balance sheet as of December 31, 2021 are as follows:

 

  A)

Reflects the liquidation and reclassification of $345.1 million of investments held in the Trust Account to cash and cash equivalents that becomes available for general use by Holdings following the closing of the Business Combination, assuming no redemptions. See adjustment note 2(F) below for actual redemptions in connection with the closing of the Business Combination.

 

  B)

Reflects the conversion of Swvl Convertible Notes to Holdings Common Shares A. During the year ended December 31, 2021, Swvl issued Swvl Convertible Notes for cash proceeds of $27.7 million. Upon consummation of the Business Combination, Swvl Convertible Notes including accrued and unpaid interest of $1.4 million were automatically converted into 7.8 million Holdings Common Shares A in accordance with the Business Combination Agreement.

Furthermore, the derivative liability recognised as an embedded derivative amounting to $44.3 million and interest payable on the Swvl Convertible Notes amounting to $1.4 million is reversed resulting in gain of $0.4 million being the difference between the fair value of (i) Swvl Convertible Notes and the related derivative liability; and (ii) Holdings Common Shares A issued against the Swvl Convertible Notes at the Closing. Conversion of the Swvl Convertible Notes resulted in the elimination of Swvl Convertible Notes, an increase to share capital of approximately $1 thousand and a $73.0 million increase to share premium.

 

  C)

Reflects the conversion of Swvl Exchangeable Notes to Holdings Common Shares A. During the year ended December 31, 2021, certain PIPE Investors pre-funded their subscription commitments by purchasing Swvl Exchangeable Notes for cash proceeds of $45.5 million. The Swvl Exchangeable Notes were automatically exchanged for Holdings Common Shares A at an exchange price of $8.50 per share. Conversion of the Swvl Exchangeable Notes resulted in the elimination of Swvl Exchangeable Notes, an increase to share capital of approximately $1 thousand and approximately $45.5 million increase to share premium.

 

  D)

Reflects proceeds from the PIPE Financing, which resulted in additional cash proceeds of $66 million and corresponding increases in share capital and share premium of approximately $1 thousand and $66.0 million.

Between January 31, 2022 and March 23, 2022, certain Initial PIPE investors purchased Additional Swvl Exchangeable Notes for an aggregate purchase price of $26.3 million. These Additional Swvl Exchangeable Notes were automatically exchanged for Swvl Holdings Common Shares A at an exchange price ranging between $9.10 and $9.50 per share at the Company Merger Effective Time. Furthermore, at and after the Company Merger Effective time, the Company issued 4.0 million shares to PIPE investors for gross proceeds of $39.7 million.

 

  E)

Reflects the exchange of 5,324,001 issued and outstanding SPAC Class A Ordinary Shares, 8,625,000 SPAC Class B Ordinary Shares, SPAC Public Warrants and SPAC Private Placement Warrants for Swvl Holdings Common Shares A and Swvl Holdings Warrants resulting in an increase to share capital and share premium of approximately $1 thousand and $2.4 million. The historical balances of accumulated deficit of the SPAC, SPAC Class A Ordinary Shares (after taking into account redemptions and change in fair value of SPAC Public Warrants and SPAC Private Placement Warrants of $1.7 million) and SPAC Class B Ordinary Shares are eliminated.

 

  F)

Represents the cash disbursed to redeem 29,175,999 shares of SPAC Class A Common Stock in connection with the Business Combination at a redemption price of $10.003 per share based on funds held in the Trust Account as of December 31, 2021.

 

  G)

Reflects the preliminary estimated fair value of the Earnout Shares contingently issuable to the Eligible Swvl Shareholders upon initial recognition as of the closing of the Business Combination. The preliminary fair value was determined based on information available as of the date of this unaudited pro forma condensed combined financial information. The actual fair value could change materially.

 

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  H)

Reflects the expense recognized, in accordance with IFRS 2, for the excess of the fair value of Holdings Common Shares A issued and the fair value of SPAC identifiable net assets at the date of the Business Combination, resulting in a $120.3 million increase to accumulated loss. The fair value of Holdings Common Shares A issued was determined based on a market price of $9.38, adjusted for the effects of dilution arising from the earnout provision of $0.7 (resulting in a net market price of $8.68 per Holdings Common Share A), $4.55 per Holdings Private Warrant and $0.74 per Holdings Public Warrant.

The estimated fair value of the equity instruments issued to SPAC Shareholders considers the impact of Holdings Common Shares A contingently issuable to Eligible Swvl Equityholders upon the occurrence of the Triggering Events or earlier, on the change of control in accordance with the earnout provisions. This effect of the earnout reduces the fair value of Holdings Common Shares A issued to the SPAC Shareholders. Since there is no service condition attached to these Earnout Shares, their impact is taken immediately by reducing the fair value of the Holdings Common Shares A issued to SPAC’s Shareholders.

 

  I)

Reflects the adjustments to share capital and share premium after the contribution of Swvl’s shares outstanding to Holdings in exchange for 93,238,700 Holdings Common Shares A resulting in an increase to share capital and share premium of approximately $10 thousand and $176.1 million, respectively. Swvl’s historical share capital of $88.9 million is eliminated.

This adjustment also reflects the exercise of all Exchanged Options held by the Swvl Option Holders (including Earnout options), resulting in increases to cash and cash equivalents and an additional increase to share premium of approximately $13.7 million. In connection with the exercise of these options, the employee share scheme reserve in the historical financial statements of Swvl is reversed, resulting in a reduction to the other reserves of approximately $36.9 million, while accumulated deficit increases by approximately $47.5 million to account for the accelerated vesting charge associated with the Exchanged Options.

 

  J)

Reflects direct and incremental transaction costs expected to be incurred by Swvl and SPAC of approximately $22.9 million and $14.5 million, respectively, for advisory, banking, printing, legal and accounting fees incurred as part of the Business Combination. $18.1 million out of the total transaction costs represent equity issuance costs and have accounted for as a reduction from share premium while $19.3 million has been accounted for as an expense, and has been reflected as an increase in the accumulated deficit. Following are the details of the transaction costs for Swvl and SPAC.

For SPAC’s transaction costs, $0.5 million represents equity issuance costs related to the PIPE Financing, which is reflected as a reduction in share premium. The remaining amount of $14 million is reflected as an increase to the accumulated deficit. These costs have been excluded from the unaudited pro forma condensed combined statement of operations. SPAC’s estimated transaction costs excludes the deferred underwriting commissions as described in (K) below which has been accrued as of the pro forma balance sheet date.

For Swvl’s transaction costs, approximately $7.4 million of these fees have been incurred and accrued in the historical financial statements as of December 31, 2021. These accrued fees have been reversed in the unaudited pro forma condensed combined statement of financial position as of December 31, 2021 resulting in a decrease of $7.4 million to the accounts payable, accruals and other payables and a decrease to the deferred transaction cost of $7.4 million. $17.6 million represents transaction costs related to capital markets and accounting advisory services, legal fees and investment bankers’ fee with respect to the Business Combination. The remaining amount of approximately $5.3 million, is included as an expense through accumulated loss and is reflected in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2021 as discussed in (AA) below.

It is assumed that these transaction costs will be paid subsequent to the Closing Date and hence the cash and cash equivalent will decrease by $47.5 million.

 

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The following tables summarize the above mentioned transaction costs and the related treatment within the unaudited pro forma condensed combined financial information:

Estimated SPAC transaction costs

 

$ (in thousands)       

Transaction costs eligible for capitalization

     500  

Transaction costs expensed as incurred (1)

     14,000  

Total SPAC transaction costs

     14,500  

 

1)

Consistent with the accounting for a capital raising transaction by Swvl, such costs are excluded from the unaudited pro forma condensed combined statement of operations, but are reflected as a reduction of the net assets of SPAC when calculating the IFRS 2 expense.

Estimated Swvl transaction costs

 

$ (in thousands)       

Transaction costs eligible for capitalisation (1)

     17,665  

Transaction costs expensed as incurred

     5,305  

Total Swvl transaction costs

     22,970  

 

1)

Direct and incremental transaction costs related to the Business Combination were allocated on a pro rata basis between the Holdings Shares issued to former SPAC Shareholders, which were charged directly to equity, and Swvl Shareholders, which were charged to expense.

 

  K)

Reflects the settlement of approximately $10.0 million in deferred underwriting commissions following consummation of the Business Combination.

Transaction Accounting Adjustments to Unaudited Pro Forma Condensed Combined Statement of Operations

The transaction accounting adjustments included in the unaudited pro forma condensed combined statement of operations for the year ended December 31, 2021 are as follows:

 

AA)

Reflects the transaction costs of approximately $19.3 million to be expensed and incurred by Swvl and SPAC, as part of the Business Combination, as described in (J), which are reflected entirely in the year ended December 31, 2021 in the unaudited pro forma condensed combined statement of operations, the earliest period presented.

 

BB)

Represents approximately $120.3 million in accordance with IFRS 2 as discussed in adjustment H above, for the difference between the fair value of Holdings Common Shares A and the fair value of SPAC’s identifiable net assets (including the SPAC Public Warrants and SPAC Private Placement Warrants) after taking into account the impact of the earnout arrangement. These costs are a nonrecurring item.

 

CC)

Reflects the accelerated vesting amounting to $36.6 million associated with the Exchanged Options, assuming an exercise date of January 1, 2021, as described in (I).

 

DD)

Reflects the reversal of interest on Swvl Convertible Notes accrued for the year ended December 31, 2021 amounting to $1.4 million and the reversal of loss recognised upon the recognition of derivative liability amounting to $44.3 million.

 

EE)

Reflects the reversal of interest income earned on the Trust Account balance by SPAC for the year ended December 31, 2021 amounting to $92 thousand.

 

FF)

Reflects the incremental employee share reserve scheme measured as of the Closing Date for the portion of the Earnout Shares issuable to Swvl Option Holders who have a continuing employment requirement, and

 

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  assuming no forfeitures. The earnout awards are considered compensation received in connection with the closing of the Merger.

 

4.

Net loss per share

Represents the net loss per share calculated using the historical weighted average shares outstanding, and the issuance of additional shares in connection with the Business Combination and related transactions, assuming the shares were outstanding since January 1, 2021.

As the Business Combination and related transactions are being reflected as if they had occurred at the beginning of the period presented, the calculation of weighted average shares outstanding for basic and diluted net loss per share assumes that the shares issued in connection with the Business Combination have been outstanding for the entire period presented. As Swvl Holdings was in a net loss under both scenarios for the year ended December 31, 2021, giving effect to outstanding SPAC Public Warrants and SPAC Private Placement Warrants was not considered in the calculation of diluted net loss per share, since the inclusion of such SPAC Public Warrants and SPAC Private Placement Warrants would be anti-dilutive.

The 15,000,000 Earnout Shares are subject to certain share price targets such that they are not determined to be participating securities at issuance, and are not included in the calculation of pro forma EPS for the year ended December 31, 2021.

 

In thousands, except per share data

   For the
year
ended
December 31,

2021
 

Net loss per share

  

Pro forma net loss

     (307,976

Weighted average shares outstanding (basic and diluted)

     118,496  

Net loss per share (basic and diluted

     (2.60

Swvl Shareholders

     92,358  

SPAC Public Shareholders

     5,324  

Sponsor

     8,625  

PIPE Investors

     12,189  

Total weighted average shares outstanding (basic and diluted)

     118,496  

Legal Proceedings

From time to time, we may become involved in actions, claims, suits, and other legal proceedings arising in the ordinary course of business, including assertions by third parties relating to intellectual property infringement, breaches of contract or warranties or employment-related matters. We are not currently a party to any actions, claims, suits or other legal proceedings the outcome of which, if determined adversely to us, would individually or in the aggregate have a material adverse effect on our business, financial condition and results of operations.

Dividends and Distributions

We have never declared or paid any dividends on our Class A Ordinary Shares and presently do not expect to declare or pay such dividends in the foreseeable future and expect to reinvest all undistributed earnings to expand our operations, which we believe would be of the most benefit to our shareholders. The declaration of dividends, if any, will be subject to the discretion of our board of directors, which may consider such factors as our results of operations, financial condition, capital needs and acquisition strategy, among others.

 

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USE OF PROCEEDS

All of the Class A Ordinary Shares offered by the Selling Securityholder pursuant to this prospectus will be sold by the Selling Securityholder for their respective accounts. We will not receive any of the proceeds from such sales. We will pay certain expenses associated with the registration of the securities covered by this prospectus, as described in the section titled “Plan of Distribution”.

We may receive up to $471,742,855 in aggregate gross proceeds under the Purchase Agreement from sales of Class A Ordinary Shares that we may elect to make to the Selling Securityholder pursuant to the Purchase Agreement, if any, from time to time in our sole discretion, from and after the Commencement Date. We expect to use the net proceeds that we receive from sales of our Class A Ordinary Shares to the Selling Securityholder, if any, under the Purchase Agreement for working capital and general corporate purposes, including to fund acquisitions.

 

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MARKET PRICE OF OUR SECURITIES AND DIVIDEND POLICY

Our Class A Ordinary Shares and Warrants began trading on Nasdaq under the symbols “SWVL” and “SWVLW”, respectively, on April 1, 2022. On June 21, 2022, the last reported sales price of the Class A Ordinary Shares on Nasdaq was $6.57, and the last reported sales price of the Warrants was $0.54.

As of June 21, 2022, there were approximately 58 holders of record of our Class A Ordinary Shares and approximately 2 holders of record of our Warrants. Such numbers do not include beneficial owners holding our securities through nominee names.

We have never declared or paid any cash dividend on our Class A Ordinary Shares. We currently intend to retain any future earnings and do not expect to pay any dividends in the foreseeable future. Any further determination to pay dividends on our Class A Ordinary Shares would be at the discretion of our board of directors, subject to applicable laws, and would depend on our financial condition, results of operations, capital requirements, general business conditions, and other factors that our board of directors may deem relevant.

 

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BUSINESS

Overview

We are a technology-driven disruptive mobility company that aims to provide reliable, safe, cost-effective and environmentally responsible mass transit solutions. Our mission is to identify and solve inefficiencies associated with low-quality or sometimes non-existent public transportation infrastructure in urban areas that are in critical need of such services. Our technology and services provide commuters, travelers and businesses with a valuable alternative to traditional public transportation, taxi companies or other ridesharing companies. Through our Swvl platform, we provide thousands of riders per day with a dynamically-routed self-optimizing network of minibuses and other vehicles, helping people get where they need to go.

Our core product is our B2C Swvl Retail offering, which provides riders with a network of minibuses and other vehicles running on fixed or semi-fixed routes within cities. Commuters use our Swvl mobile application to book rides between pre-defined pick-up points located throughout the city. Our service is powered by a suite of proprietary technologies that regularly optimize routing, predict rider demand, set pricing and provide a seamless user experience for customers and drivers. We believe that our platform offers a transportation alternative that is more efficient, reliable and safe than traditional public transportation options, at an accessible price point. This has allowed us to grow our business rapidly. As of December 31, 2021, more than 2.1 million users have booked more than 73.3 million rides on Swvl.

With our Swvl Travel offering, riders can book rides on long-distance intercity routes on either vehicles available exclusively through the Swvl platform or through third-party services marketed through Swvl.

Leveraging the technology that we use for our Retail and Travel offerings, we also offer TaaS enterprise products (marketed as Swvl Business) for businesses, schools, municipal transit agencies and other customers that operate their own transportation programs. These products include, among other things, access to our Swvl Business platform, use of our proprietary technologies, consulting and reporting services and use of the vehicles and drivers on our network to operate such transportation programs. We package our TaaS products to meet the specific needs of each customer. As of December 31, 2021, more than 250 companies across diverse industries, including technology, finance, food and beverage, consulting and healthcare, use our TaaS products. We also announced plans to expand our Swvl Business offering by introducing SaaS products in 2022, which will allow customers with their own vehicle fleets to utilize the benefits of our platform and technologies.

Our business was founded on February 8, 2017 by Mostafa Kandil, our Chief Executive Officer, Mahmoud Nouh and Ahmed Sabbah. We launched our first commuter services in Cairo, Egypt in March 2017, before expanding to Alexandria, Egypt the same year. As of December 31, 2021, we have expanded our operations to multiple cities across seven countries, with our core Retail offering available in select cities in Egypt, Kenya, Pakistan and Jordan. In January 2019, we commenced operations in Nairobi, Kenya. Namely, in the second half of 2019, we commenced operations in major cities in Pakistan, including Lahore, Islamabad and Karachi, and relocated our headquarters from Cairo, Egypt to Dubai, United Arab Emirates. In 2020 and 2021, we also launched TaaS offerings in the United Arab Emirates, Jordan, Saudi Arabia and Malaysia.

Market Opportunity and Competitive Advantage

We believe that traditional modes of public transportation represent a rigid and outdated approach to the needs of the modern world. Particularly in developing countries, existing mass-transit infrastructure often suffers from a combination of being inaccessible, unreliable and unsafe. Urban populations in such countries are often unserved or underserved by public transportation networks. Where access to public transportation is available, many commuters must endure long wait times and inconsistent or delayed service. In turn, commuters and society at large waste hours waiting for transportation. In addition, mass-transit networks often fail to provide a safe travel environment—particularly for women. Overcrowding on vehicles can expose riders to a greater risk of

 

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sexual harassment, assault or theft. In fact, the Asian Development Bank’s 2015 report, Policy Brief: A Safe Public Transportation Environment for Women and Girls, found that 78% of women surveyed in Karachi reported being harassed on public transport at least once over the preceding year.

Alternatives to public transportation are also inaccessible for many commuters. In the markets we serve, such as Egypt and Pakistan, taxi companies and other ridesharing companies generally cater to wealthier customers. While more convenient and safer than public transportation, high prices (even with discounts and promotions) may put these services out of reach for many commuters.

Swvl’s B2C retail strategy is to create new options for mass-transit by occupying the space between traditional public transportation and expensive private options to attract ridership to our platform:

 

   

Reliability: In some of our markets, it is common for public buses to wait at stops until buses are full, resulting in unpredictable scheduling and long delays. Because our vehicles operate through a booking system, drivers know exactly how many passengers will board at a given pre-defined pick-up point and do not wait to collect additional riders. We also gather and analyze large amounts of traffic data in the cities we serve to predict travel conditions, which allows riders to receive estimated pickup and arrival times, as well as track their vehicle in real time. In 2021, we maintained an average monthly first station reliability rate of approximately 91%, meaning that drivers using our platform arrived on-time (i.e., within five minutes of the estimated time) at the first pick-up point of their daily routes approximately 91% of the time.

 

   

Convenience: Optimized route planning and scheduling allow us to create and update routes that react to and satisfy rider demand, in contrast to public transportation that operates solely on fixed routes. This means we can ensure that our riders have convenient access to pick-up points. Our Swvl application allows riders to make bookings up to five days in advance, and we offer payment by cash, credit card or digital wallet.

 

   

Safety: Safety is an essential part of our value proposition. We recognize that consumers in the markets we serve often feel unsafe on public transportation. We have built our user experience around functionalities designed to increase safety. Our one-passenger-per-seat booking system avoids overcrowding on our vehicles, reducing the likelihood of harassment, assault and theft during rides. Unlike public transportation, the fact that each rider has a unique user account facilitates identification of riders acting improperly, thereby increasing accountability and incentivizing good conduct. Through our Swvl application, riders can share their live ride status with others. We also partner with insurance companies to provide in-ride medical insurance to all riders and drivers using our platform in Egypt and maintain dedicated teams to respond to critical incidents. Our driver engagement procedures are also designed to ensure the safety of our riders, including by requiring drivers using our platform in Egypt and Jordan to submit recent criminal record checks and drug tests as part of their engagement process. In order to help ensure the health and safety of drivers and riders using our platform during the COVID-19 pandemic, we ran SMS-based campaigns to educate drivers using our platform on heightened safety measures.

 

   

Comfort: We also differentiate our customer experience on the basis of comfort. Riders are guaranteed a seat, which eliminates crowding and the need to stand during rides. All vehicles must meet specific criteria relating to age, distance traveled, maintenance history and overall condition before being allowed to operate on our platform.

 

   

Value: Our services are priced to be accessible to a large rider base and cheaper than taxis or other ridesharing companies in the markets we serve.

Our main source of competition is public transportation. We strive to harness the competitive advantages of our offerings described above to convert users of public transportation into users of our platform. We also compete against taxi companies and traditional ridesharing platforms, such as Uber. By offering comfortable,

 

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reliable and safe rides at an accessible price point, our offerings aim to attract users of single-rider services by offering a lower-cost alternative that offers a better rider experience than public transportation.

In the markets we serve, the mass-transit ridesharing industry is a relatively new phenomenon, and as a result there are a small but growing number of businesses that offer services equivalent to ours. Examples of such businesses include Via, Flixbus and Shuttl. We believe that the technology powering our offerings (please see the section entitled “Our Technology” below), as well as our early entry into the mass-transit ridesharing space (and the network effects that such early entry enables), have allowed and will allow us to scale our business efficiently, in turn enabling us to create and maintain a strong competitive position in the markets in which we operate.

In addition to our B2C business, we have expanded our market opportunity by targeting corporate clients through our Swvl Business (TaaS) offerings. We believe Swvl Business products offer a comprehensive solution to the inefficiencies that commonly affect businesses (as well as schools and municipalities) operating commute and travel programs for their employees (and students). Many companies rely on large vehicle fleets to compensate for unoptimized and rigid routing. Poor fleet utilization—such as using large buses to accommodate a relatively small number of passengers—drives up per-rider costs. Traditional dispatching infrastructure and the associated administrative burdens, including manual data collection, invoice reconciliation and inconsistencies in records, contribute to costly and time-consuming process management. With our TaaS and SaaS offerings, we compete with other ridesharing companies, such as Via.

We also believe the diversity of our offerings is a key competitive advantage. Whereas other companies in the ridesharing industry focus on one or two product categories (such as intracity and intercity B2C offerings), our offerings include intracity (i.e., Retail) and intercity (i.e., Travel) B2C offerings as well as B2B offerings, which provide our business with multiple avenues for growth.

Offerings

We currently serve the customers on our platform through two offerings: “business to consumer”, comprised of Swvl Retail and Swvl Travel, and “business to business”, which includes our TaaS model.

Swvl Retail

Our core product is our Swvl Retail offering. Using our platform, we provide riders with a network of minibuses and other vehicles that operate on fixed and semi-fixed routes throughout the cities we serve. Riders book seats on vehicles available exclusively through Swvl to commute within a city. Riders can book journeys up to five days in advance and pay a fixed rate, determined based on ride distance and anticipated demand, with the option to pay in cash or by credit card or digital wallet. Riders manage their user experience via the Swvl mobile application, through which riders can access and book available trips, track vehicles in real-time, receive an estimated pick-up time, manage payments and access customer support services.

Swvl Travel

With Swvl Travel, riders book and take intercity, long-distance trips on either vehicles available exclusively through the Swvl platform or with third-party services marketed through Swvl in exchange for a commission. We also opened and manage a physical Swvl Travel shop in Hurghada, Egypt, which allows riders to book intercity trips in person in a convenient location for frequent travelers.

Swvl Business (TaaS and SaaS)

In addition to our B2C offerings, we have worked to develop ways of diversifying our revenues and identifying potentially higher-margin offerings. The result is our B2B TaaS and SaaS products, marketed together as Swvl Business.

 

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Swvl Business enables our corporate customers (as well as schools and municipalities) to use Swvl’s technology and platform to optimize the commute and travel programs they operate for their employees (and students). Since Swvl Business uses technology already developed for our B2C offerings, its development and deployment does not (and did not) impose significant additional R&D costs on our business. Our TaaS offerings are targeted at companies that do not operate their own vehicle fleets. With TaaS, we offer dedicated routes (for use exclusively by the organization’s employees and students) using vehicles and drivers already operating on Swvl to transport employees and students to and from their places of work and study. Unlike our B2C offerings, pricing, routing and vehicle allocation are fixed in our agreements with each customer, and only drivers that meet the criteria set forth in these agreements are dispatched to operate on the applicable TaaS routes. Our customers typically pay for our TaaS offerings on a per route basis, with pricing determined based on the length and location of such route and without regard to the number of riders on such route.

We intend to expand our Swvl Business offerings with SaaS in 2022. Our SaaS offerings will be targeted at corporate customers (as well as schools and municipalities) that operate their own vehicle fleets, with specific services tailored to the needs of each customer. Our basic offerings will include access to our dedicated Swvl Business application, which centralizes passenger management, billing, scheduling, data analytics and support functions in one platform. At higher service tiers, we will provide the use of our network optimization and Dynamic Routing technologies as described below, as well as access to our fleet management modules, which will enable our customers to more easily manage their drivers and track their rides. We also plan to offer consulting and reporting services. We intend to use a tiered cost-plus pricing model for our SaaS products.

As our B2B customers do not pay for TaaS and SaaS services on a per rider or per utilized seat basis, Swvl does not assume any utilization risk on such offerings. As a result, we anticipate that TaaS and SaaS have the potential to be higher-margin offerings, which would allow us to enhance our margins.

Our Technology

Our technology is a critical component of our business proposition. Our ability to provide a seamless experience for our riders and drivers, to effectively predict rider demand, to create efficient, high-Utilization route plans and to price our offerings accordingly depends on ongoing innovation and the effectiveness of our data analysis, modeling and algorithms.

Our technology and business model also depend in part on our relationships with third party product and service providers. For example, we rely on third parties to fulfill various marketing, web hosting, payment, communications and data analytics services to support our platform. We also incorporate third party software into our platform. When selecting third party technology providers, we focus on affordability, reliability, efficiency, optimization and cohesion with our platform, and believe our existing relationships with such providers are critical to our ability to execute our business strategy.

Access to Our Platform

Drivers and riders that utilize our platform do so through our mobile application. Riders use our application to access available trips, select pick-up and drop-off locations, schedule trips in advance and to pay.

In addition, riders can use our application to track their vehicle in real time or quickly view the walking route and time to their scheduled pick-up point. Drivers use our mobile application to access upcoming and past trips, check riders in and out of their vehicle and access training modules and support.

Demand Identification and Prediction

We use our proprietary network optimization model to create, optimize and effectively price the routes we offer. This model employs machine learning algorithms to predict and identify latent and existing demand within

 

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cities. Our algorithms segment cities into equally-sized areas that serve as the basic unit of analysis we use to build our network. We run regression analyses to identify major demand pairings between segments, and use in-app search data and other tools, such as mobile data and social media, to understand the potential magnitude of riders’ movement between these segments. This process allows us to determine where to run new routes, where to reactivate discontinued routes and where to add or remove capacity.

Route Creation and Optimization

Based on this demand identification and prediction analysis, our proprietary, machine learning and regularly adapting model defines optimal routes to maximize conversion of demand into ridership, minimize overlap between routes, minimize walking distance to our pick-up points and define the right time to deploy vehicles. An algorithm then automatically sets vehicle routes and pick-up points in a manner designed to maximize vehicle Utilization and earnings and to pair drivers with routes that are convenient to their location in the city. Our monthly Utilization rate, measured as the Total Bookings in a given month divided by Total Available Seats in such month, was approximately 81% in December 2021, up from approximately 78% in January 2021.

In an attempt to ensure maximum vehicle Utilization and driver convenience and to minimize per-kilometer costs, we also use machine learning algorithms to “stitch” multiple routes into a single daily plan for each vehicle. Each plan consists of two to six separate routes, allocated to vehicles to minimize travel time between the end of one route and the beginning of another. The routes that comprise a single plan may consist of Swvl Retail, Swvl Travel or Swvl Business (TaaS) routes. By sequencing routes this way, we are able to increase the time drivers spend on routes (as opposed to moving between routes) and thereby increase the revenue vehicles using our platform can produce each day. The plan-creation algorithm is also designed to ensure that the end point of each plan is proximate to the starting point, which helps to minimize the time vehicles spend unutilized as drivers return home and to keep drivers using our platform. We believe that this planning function has helped to maintain strong rates of driver retention.

Once plans are created, their allocation is determined at the beginning of each week using a smart assignment system. Using our platform, drivers (or the third party vehicle operators that employ them) bid on their desired route plan based on their pricing, scheduling and location preferences. A recommendation engine matches the plans with each driver or vehicle operator based on these preferences and expected overall cost (including the bid price). High-performing drivers and vehicle operators also receive preference for more convenient route plans and are eligible for bonus payments.

Dynamic Routing

We also employ Dynamic Routing, a proprietary computational algorithm, to enable us to adapt to emerging demand pockets as our vehicles move through a city. Dynamic Routing creates new, temporary pick-up points near prospective riders, and updates routing accordingly in real-time to maximize demand capture. By creating new pick-up points close to prospective riders, Dynamic Routing reduces walking distances to such points, increasing the likelihood a rider will book a particular ride. In determining whether to update a route, Dynamic Routing ensures that any route updates do not result in breaches of estimated arrival times quoted to riders already aboard.

Pricing

We employ a proprietary machine learning model to dynamically set pricing for rides and maximize per-vehicle revenue, akin to the models used in the airline industry. We use a variety of data, such as expected vehicle Utilization at the time of ride, user convenience (measured as the median walk to station time for each ride search), user churn probability (an estimate of the likelihood of a user to significantly decrease his or her number of bookings based on historical data, built through a machine learning algorithm) and other variables, to determine the appropriate price point and to update pricing in real time. For example, ride pricing is increased

 

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during peak hours where an increase is not expected to impact overall Utilization, and prices are decreased during periods of low demand to increase Utilization and revenue.

Our per rider Total Ticket Fares generation has increased over time. To measure per rider Total Ticket Fares generation, we calculate the per rider Total Ticket Fares generated by all new riders (i.e., those riders using Swvl for the first time) in a given month and track the per rider Total Ticket Fares attributable to those specific riders in subsequent months.

Fleet Management

Our technology also includes backend software that we use to support our drivers with various features on our platform, including training modules, trip management, rider check-in and checkout at pick-up and drop-off locations and 24/7 support. For our SaaS offering, among other things, we intend to provide similar fleet management services to corporate customers (as well as schools and municipalities) that operate their own vehicle fleets by granting such customers access to these features on our platform. For example, we intend to include a driver management module that allows such customers to add, train and manage their driver employees on the platform, edit driver information, and collect relevant documents, in addition to providing payment configurations and customer support. We also intend to include a ride management module that allows such customers access to features related to configuring, pricing, monitoring, distance and time tracking, and backup management in the event a driver does not arrive at a pickup or drop-off location.

Vehicles and Drivers

Our business model depends on having a sizable network of drivers who use our platform available for our riders. As Swvl does not itself own any vehicles or employ any drivers, we rely on individual drivers with their own vehicles and third party vehicle operators that own or lease vehicles and employ drivers. As a result, we have strived to create a seamless user experience for drivers and vehicle operators that incentivizes continued use of our platform. Individual drivers and third party vehicle operators have access to a dedicated mobile application that allows them to bid on preferred route plans and to have visibility of their expected earnings. Drivers and vehicle operators are matched with route plans on the basis of their preferences and overall cost. To incentivize performance, high-performing drivers and vehicle operators are more likely to be matched to their preferred route plan. Drivers (or the vehicle operators that directly employ them) are paid on a fixed, per route basis, which means their earnings are not tied to the number of riders aboard at any given time.

We believe our development of route optimization technology provides a key incentive for vehicle operators and drivers to use our platform. By optimizing our plans, cross-dispatching across B2C and TaaS routes and reducing the amount of time drivers spend moving between routes (as well as assigning routes so that drivers complete their route plans near their homes), we are able to increase the number of drivable routes per day and maximize earnings. We believe this has contributed to our strong rates of driver retention.

In addition, we aim to offer a safe, clean and comfortable travel environment for our riders. Vehicles must meet specific criteria relating to age, distance traveled, maintenance history and overall condition before being allowed to operate on our platform. When new drivers first begin to use our platform, they are similarly subject to various screening procedures. Each driver utilizing our platform is required to hold a commercial license to operate their vehicles and complete our engagement process. Drivers are also held to strict standards of conduct while driving on our platform.

Growth Strategy

 

   

Geographic Expansion: We aim to become the pre-eminent mass-transit provider in emerging and developed markets. Our growth strategy is to identify opportunities for market entry in countries and cities where we can leverage the competitive advantages of our technology and platform. We examine

 

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factors such as total addressable market size and average fare per trip to assess whether expansion offers a viable path to profitability. We also review the quality of existing public transportation infrastructure to assess ease of market penetration and convertibility of public transportation users to our platform. For our Swvl Travel offering, we also assess factors such as the number of large cities in a country and the frequency of intercity travel to understand potential market size. Other considerations, such as ease and cost of doing business, as well as political stability, also factor into our expansion planning. We follow a standardized plan for market entry, premised on rapid commencement of operations and building scale across similar socio-economic blocks and regions. Our roadmap for geographic expansion as of the date of our Annual Report on Form 20-F, filed with the SEC on April 15, 2022, is summarized below, but we continuously evaluate organic and inorganic growth opportunities to determine the optimal path to efficient expansion.

 

   

Continued Innovation: We are consistently working to improve our proprietary technology. As our optimization of demand prediction, routing and pricing improves, our user base, Utilization rates and customer experience are expected to improve. We expanded our overall Utilization rate from 48% in January 2018 to 81% in December 2021, while reducing inefficiency costs and improving our margins. We believe that this innovation is essential to our success and profitability.

 

   

Category Expansion: We frequently consider how our core assets—our technology, access to a large vehicle fleet and customer base—can be leveraged to generate new streams of revenue while minimizing incremental R&D costs.

Marketing

Our marketing strategy is focused on expanding ridership in existing markets while rapidly accelerating brand awareness in new territories. We utilize a multi-channel approach, built on a foundation of digital marketing, to develop awareness of our offerings and expand our user base.

Since drivers and riders using our platform are internet-connected, we believe a digital-focused marketing approach offers the most effective means of accessing our target demographics in a cost-effective manner. Our advertising is conducted primarily through social media campaigns and placed web advertisements. We also rely on search engine optimization and application marketplace optimization tools to build and maintain the prominence of our brand. We offer various incentives from time to time, such as promotions for new riders and discounts for bulk purchases or specific trips. We also operate a referral program that offers incentives for riders to refer new users.

In new markets, we also advertise our offerings through offline advertising, such as billboards and events at public venues (such as shopping malls) where we host promotional events, giveaways and conduct in-person account activations.

In addition to the above, our marketing team is responsible for developing and maintaining partnerships with other businesses, such as telecom companies, which allows us to deploy promotions and incentives to the customers of such businesses.

Intellectual Property

The protection of our technology, including as described above under “Our Technology”, and other intellectual property is an important aspect of our business. We seek to protect our intellectual property through trademark and copyright laws as well as confidentiality agreements, other contractual commitments and security procedures. We enter into confidentiality and intellectual property assignment agreements with certain employees to control access to, and clarify ownership of, our technology and other proprietary information. We regularly review our technology development efforts and branding strategy to identify and assess options for protection of new intellectual property.

 

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Intellectual property laws, contractual commitments and security and technical procedures provide only limited protection, and any of our intellectual property rights may be challenged, invalidated, circumvented, infringed or misappropriated. Further, intellectual property laws vary from country to country, and we are in the process of transferring our intellectual property from Egypt to other jurisdictions in which we operate. Therefore, in other jurisdictions, we may be unable to adequately protect certain rights in our proprietary technology, brands, or other intellectual property from use by unauthorized entities or individuals. Please see the section entitled “Risks Related to Regulatory, Legal and Tax Factors Affecting Swvl—Failure to protect or enforce Swvl’s intellectual property rights could harm Swvl’s business, financial condition and operating results.”

Data Protection and Privacy

Swvl has made commitments to protect and respect the personal data and privacy of all of our external users. Our business depends on the collection, storage, transmission, use and processing of personal data of Swvl’s users’ and other sensitive information. As a result, our ability to protect such data and comply with the numerous laws, rules and regulations related to the collection, storage, transmission, use and other processing of such data is integral to our operations.

We are in the process of developing systems and processes that are designed to protect users’ data, prevent data loss and prevent other privacy or security breaches. These measures, however, cannot guarantee security and may not be effective against all cyberattacks or breaches. For example, in July 2020, by exploiting a breach in certain third-party software used by Swvl, unauthorized parties gained access to a Swvl database containing personal data of its riders. While such breach has not had a material impact on Swvl’s business or operations and Swvl has since implemented measures to prevent a similar data breach, unauthorized parties may further exploit the breached information and may in the future gain access to Swvl’s systems or facilities through various other means.

We are also obligated to comply with all applicable laws, regulations and other obligations relating to privacy, data protection and information security. These laws, rules and regulations evolve frequently and their scope may continually change, through new legislation, amendments to existing legislation and changes in enforcement, and may be inconsistent from one jurisdiction to another and may conflict with each other. Nevertheless, we maintain and provide our users with a copy of our privacy policy, which is intended to succinctly describe the type of information we collect and how we use such information (including restrictions on disclosure and sharing of such information), as well as our security policies and procedures. We periodically update our privacy policy to reflect changes required by law or changes in the way we intend to collect or use information.

For more information on the risks related to data protection, data security and privacy as they relate to our business, please see the section entitled “Risk Factors.”

Insurance

We maintain insurance policies with global insurance providers to provide in-ride medical coverage to all riders and drivers in our Egypt market. We also provide comprehensive health insurance to employees in Egypt, Kenya, Pakistan, Jordan, Saudi Arabia, United Arab Emirates, Malaysia. We are currently in the process of obtaining other forms of insurance, such as general business liabilities and directors’ and officers’ insurance. Please see the section entitled “Risk Factors—Risks Related to Operational Factors Affecting Swvl—Swvl has not historically maintained insurance coverage for its operations. Swvl may not be able to mitigate the risks facing its business and could incur significant uninsured losses, which could adversely affect its business, financial condition and operating results.”

Government Regulation

We are subject to a wide variety of laws and regulations in the jurisdictions in which we operate. The ridesharing industry and our business model are relatively nascent and rapidly evolving. New laws and

 

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regulations and changes to existing laws and regulations continue to be adopted, implemented and interpreted in response to our industry and related technologies. We strive to comply with all laws and regulations applicable to our operations, and believe that we are in compliance with such laws and regulations in all material respects, other than as described below.

While Swvl is not aware of any material limitations on foreign investment in the jurisdictions in which it operates, Swvl is required to comply with certain regulations related to such investment. In particular, in Jordan, non-Jordanian investors are restricted from wholly owning any project or business venture that involves certain trade, construction or services activities. While Swvl does not intend to engage in any such activities in Jordan, the organizational documents of the entity that currently conducts Swvl’s operations in Jordan erroneously includes certain restricted activities as potential objectives of such entity. Such entity is in the process of amending its organizational documents such that Swvl will be permitted to acquire and hold all of the equity thereof. In addition, in the United Arab Emirates, foreign investors are required to operate via an onshore licensed entity or an onshore branch of a foreign or free zone entity. Swvl has established such an onshore branch and has obtained the requisite licenses and approvals for such branch’s operations. Swvl may become subject to additional limitations and regulations as it expands its operations in the jurisdictions in which it operates and into new jurisdictions, and such limitations and regulations may impair Swvl’s ability to operate effectively in such jurisdictions.

In Egypt, Swvl is subject to Law No. 87 of 2018 and the Executive Regulation by Presidential Decree No. 2180 of 2019 (collectively, “Egyptian Ridesharing Laws”). Pursuant to such Egyptian Ridesharing Laws, Swvl–as well as any other land transport service company in Egypt that utilizes information technology–is required to obtain a license issued by Egypt’s Land Transport Regulatory Authority (the “Egyptian LTRA”). While companies were required under the Egyptian Ridesharing Laws to obtain such licenses by December 12, 2018, the Egyptian LTRA was not established until June 11, 2019, and, to Swvl’s knowledge, the Egyptian LTRA has not yet issued a license to any ridesharing company, including Swvl. On December 12, 2019, Swvl submitted an application to the Egyptian LTRA, seeking the required license. If and when the Egyptian LTRA approves Swvl’s license application, Swvl will be required to pay a licensing fee, which will include a fee associated with the application process and a fee for Swvl’s pre-license operations in Egypt. As a result of Swvl’s current non-compliance with the licensing requirements of the Egyptian Ridesharing Laws, the Egyptian LTRA has imposed monetary fines on drivers using Swvl’s platform, which Swvl expects will continue to be imposed until Swvl’s license application is approved. Swvl has reimbursed, and expects to continue to reimburse, drivers for such fines.

We are also subject to a number of laws and regulations specifically governing the internet and mobile devices that are constantly evolving. Existing and future laws and regulations, or changes thereto, may impede the growth and availability of the internet and online offerings, require us to change our business practices or raise compliance costs or other costs of doing business. These laws and regulations, which continue to evolve, cover taxation, privacy and data protection, pricing, copyrights, distribution, mobile and other communications, advertising practices, consumer protections, the provision of online payment services, unencumbered internet access to our offerings and the characteristics and quality of online offerings, among other things. In particular, as we expand our operations internationally, we expect to become subject to the EU General Data Protection Regulation (“GDPR”), which regulates the collection, control, sharing, disclosure, use and other processing of personal data and imposes stringent data protection requirements and significant penalties, and the risk of civil litigation, for noncompliance. The GDPR has resulted in and will continue to result in significantly greater compliance burdens and costs for companies with users and operations in the European Union. As we expand our business internationally, we will become subject to these costs and burdens in an effort to ensure that our operations are GDPR compliant.

In addition to these laws and regulations that apply specifically to the mass-transit ridesharing industry, related technology, the internet and related regulations, our business operations are subject to other broadly applicable laws and regulations governing such issues as labor and employment, anti-discrimination, worker

 

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confidentiality obligations, consumer protection, taxation, competition, unionizing and collective action, background checks, anti-corruption, anti-bribery, import and export restrictions, environmental protection, sustainability, trade and economic sanctions, foreign ownership and investment and foreign exchange controls. Please see the section entitled “Risk Factors—Risks Related to Regulatory, Legal and Tax Factors Affecting Swvl—Swvl is subject to various laws relating to anti-corruption, anti-bribery, anti-money laundering, and countering the financing of terrorism and has operations in certain countries known to experience high levels of corruption. Swvl has not implemented, or has only recently implemented, certain policies and procedures for the operation of its business and compliance with applicable laws and regulations, including policies with respect to anti-bribery and anti-corruption matters and cyber protection.”

As we continue to expand our platform offerings and user base, we may become subject to additional laws and regulations, which may differ or conflict from one jurisdiction to another. Please see the section entitled “Risk Factors—Risks Related to Regulatory, Legal and Tax Factors Affecting Swvl—As Swvl expands its offerings, it may become subject to additional laws and regulations, and any actual or perceived failure by Swvl to comply with such laws and regulations or manage the increased costs associated with such laws and regulations could adversely affect Swvl’s business, financial condition, and operating results.”

Organizational Structure

Swvl Holdings Corp is a British Virgin Islands business company incorporated under the laws of the British Virgin Islands. Swvl Holdings Corp has ten wholly-owned subsidiaries and two majority-owned subsidiaries. Swvl Holdings Corp’s wholly owned subsidiaries are: Swvl Inc., a British Virgin Islands business company incorporated under the laws of the British Virgin Islands; Pivotal Merger Sub Company I, a Cayman Islands exempted company with limited liability; SWVL NBO Limited, a private limited company organized under the laws of Kenya; SWVL Saudi for Information Technology, a single person limited liability company organized under the laws of Saudi Arabia; Swvl Technologies Limited, a private limited company organized under the laws of Kenya; Swvl Global FZE, a limited liability company organized under the laws of Dubai; SWVL Technologies FZE, a limited liability company organized under the laws of Dubai and a directly wholly owned subsidiary of Swvl Global FZE; Swvl Holdco Corp, a British Virgin Islands business company incorporated under the laws of the British Virgin Islands; and Swvl MY For Information Technology SDN BHD, a company limited by shares organized under the laws of Malaysia.

Swvl Holding Corp’s majority-owned subsidiaries are: Shotl Transportation S.L., a limited liability company organized under the laws of Spain, in which Swvl Holding Corp’s wholly owned subsidiary Swvl Inc. holds 55% of the outstanding equity interests; Viapool Inc., a company incorporated under the laws of the State of Delaware, in which Swvl Holding Corp’s wholly owned subsidiary Swvl Inc. holds 51% of the outstanding equity interests; Swvl For Smart Transport Applications and Services LLC, a limited liability company organized under the laws of Egypt, in which Swvl Holding Corp’s wholly owned subsidiary Swvl Inc. holds 99.8% of the outstanding equity interests; and Swvl Pakistan (Private) Limited, a company limited by shares organized under the laws of Pakistan, in which Swvl Holding Corp’s wholly owned subsidiary Swvl Inc. holds 99.9987% of the outstanding equity interests. The minority interests in Swvl For Smart Transport Applications and Services LLC and Swvl Pakistan (Private Limited) are held by persons affiliated with Swvl solely to comply with applicable laws requiring local resident shareholders.

Swvl currently operates in Jordan through an entity, Al Tanakol Al Thaki L Tasmeem Wa Tatweer Baramej Wa Anthemat Al Hasoub (“Swvl Jordan”), in which it holds only economic rights and does not hold any direct or indirect equity interest. All of the equity in Swvl Jordan is instead temporarily being held by persons affiliated with Swvl in favor of Swvl as beneficiary. Swvl is in the process of acquiring 49% of the equity of Swvl Jordan, and the remainder when it its permitted to do so under applicable law. Until such time, Swvl’s interest in the equity of Swvl Jordan will be governed by an interim management agreement with the Jordanian national persons holding such equity. Pursuant to the interim management agreement, such persons (i) hold the equity in Swvl Jordan in trust for, on behalf of and for the sole benefit of Swvl and (ii) are obligated to transfer such equity to Swvl or an affiliate of Swvl for nominal consideration upon the request of Swvl.

 

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A diagram of Swvl’s group structure, as described above, is provided below:

Swvl Group Corporate Legal Structure

 

LOGO

Property, Plants and Equipment

We lease approximately 13,391 square feet of office space for our corporate headquarters, located at the Offices 4 at One Central, Dubai World Trade Center, Dubai, United Arab Emirates. Our existing headquarters lease expires on September 14, 2024, which we expect to extend to December 31, 2026, including in connection with an office expansion plan for our headquarters. In addition, we lease various office spaces across different cities in: Egypt, Pakistan, Kingdom of Saudi Arabia, Jordan, Malaysia and Kenya. We expect to grow our facilities footprint as our business continues to grow and establish a new engineering hub in Cairo. We also expect to establish local offices in some or all of the jurisdictions into which we are expanding geographically. The phone number for our headquarters is +971 42241293.

 

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OPERATING AND FINANCIAL REVIEW AND PROSPECTS

You should read the following discussion and analysis of Swvl’s financial condition and results of operations together with Swvl’s consolidated financial statements and the related notes thereto included elsewhere in this prospectus. The following discussion and analysis is based on Swvl’s financial information prepared in accordance with IFRS as issued by the IASB and related interpretations issued by the IFRS Interpretations Committee. Some of the information contained in this discussion and analysis or set forth elsewhere in this prospectus, including information with respect to Swvl’s plans and strategy for Swvl’s business, includes forward-looking statements that involve risks and uncertainties. Actual results could differ materially from the results discussed in the forward-looking statements. Please see the sections titled “Risk Factors” and “Cautionary Note Regarding Forward-Looking Statements” for a discussion of the risks, uncertainties and assumptions associated with these statements and for a discussion of important factors that could cause actual results to differ materially from the results described in or implied by the forward-looking statements contained in the following discussion and analysis. Swvl’s historical results are not necessarily indicative of the results that may be expected for any period in the future.

Unless the context otherwise requires, for the purposes of this section, “Swvl”, “we”, “us”, “our”, or the “Company” refer to the business of Swvl Inc. and its subsidiaries, “FY 2021” refers to the fiscal year of Swvl ended December 31, 2021, “FY 2020” refers to the fiscal year of Swvl ended December 31, 2020 and “FY 2019” refers to the fiscal year of Swvl ended December 31, 2019.

For discussion related to our financial condition, changes in financial condition and results of operations for 2020 compared to 2019, please refer to the section titled “Management’s Discussion and Analysis of Financial Condition and Results of Operations of Swvl” of our Registration Statement on Form F-4, which was filed with the SEC on March 11, 2022.

Recent Developments

Equity Line Financing

On March 22, 2022, we entered into the Purchase Agreement with B. Riley pursuant to which B. Riley committed to purchase up to the Total Commitment of Class A Ordinary Shares, subject to certain limitations and conditions set forth in the Purchase Agreement.

Upon Commencement, Swvl will have the right, but not the obligation, from time to time at Swvl’s sole discretion over the 24-month period from and after the Commencement, to direct B. Riley to purchase a specified amount of Class A Ordinary Shares (such specified amount, the “Purchase Share Amount”), not to exceed a daily maximum calculated in accordance with the terms of the Purchase Agreement.

The per share purchase price for the Class A Ordinary Shares that Swvl elects to sell to B. Riley in a purchase pursuant to the Purchase Agreement, if any, will be determined by reference to the VWAP, less a discount of 3%.

There is no upper limit on the price per share that the Selling Securityholder could be obligated to pay for the Class A Ordinary Shares that we may elect to sell to it in any Purchase or any Intraday Purchase under the Purchase Agreement. In the case of Purchases and Intraday Purchases effected by us under the Purchase Agreement, if any, all share and dollar amounts used in determining the purchase price per share of Class A Ordinary Shares to be purchased by the Selling Securityholder in a Purchase or an Intraday Purchase (as applicable), or in determining the applicable maximum purchase share amounts or applicable volume or price threshold amounts in connection with any such Purchase or Intraday Purchase (as applicable), in each case, will be equitably adjusted for any reorganization, recapitalization, non-cash dividend, stock split, reverse stock split or other similar transaction occurring during any period used to calculate such per share purchase price, maximum purchase share amounts or applicable volume or price threshold amounts.

 

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The Company may not issue or sell any Class A Ordinary Shares to the Selling Securityholder under the Purchase Agreement which, when aggregated with all other Class A Ordinary Shares then beneficially owned by the Selling Securityholder and its affiliates (as calculated pursuant to Section 13(d) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and Rule 13d-3 thereunder), would result in the Selling Securityholder beneficially owning more than the Beneficial Ownership Limitation, which equal to 4.99% of the outstanding Class A Ordinary Shares.

The net proceeds under the purchase agreement to Swvl will depend on the frequency and prices at which Swvl sells its Class A Ordinary Shares to B. Riley. Swvl currently expects that any proceeds received by it from such sales to B. Riley will be used for working capital and general corporate purposes, including to fund acquisitions.

The Purchase Agreement will automatically terminate on the earliest to occur of (i) the first day of the month next following the 24-month anniversary of the Commencement Date, (ii) the date on which B. Riley shall have purchased from Swvl under the Purchase Agreement Class A Ordinary Shares for an aggregate gross purchase price equal to the Total Commitment and (iii) certain other customary termination events. Swvl has the right to terminate the Purchase Agreement at any time after Commencement, at no cost or penalty, upon five trading days’ prior written notice to B. Riley. B. Riley will also have the right to terminate the Purchase Agreement, at no cost or penalty, upon five trading days’ prior written notice to Swvl, if certain events occur or conditions are not met, including if the initial registration statement is not filed or has not been declared effective by the specified deadlines in the Registration Rights Agreement. Swvl and B. Riley may also agree to terminate the Purchase Agreement by mutual written consent. No provision of the Purchase Agreement or the Registration Rights Agreement may be modified or waived by Swvl or B. Riley from and after the date that is one (1) trading day immediately preceding the date on which the initial registration statement is initially filed with the Commission.

As consideration for B. Riley’s commitment under the Purchase Agreement to purchase our Class A Ordinary Shares, we issued 386,971 Class A Ordinary Shares to B. Riley and such Class A Ordinary Shares are fully earned and non-refundable, even in the event we do not sell any Class A Ordinary Shares to B. Riley under the Purchase Agreement.

Impact of the COVID-19 Pandemic

The worldwide spread of COVID-19 has caused public health officials to recommend and governments to enact precautions to mitigate the spread of the virus, including travel restrictions, extensive social distancing and issuing “shelter-in-place” orders in many regions, including the jurisdictions in which we operate. Beginning in March 2020, the pandemic and these related responses have had an adverse effect on demand and earning opportunities for drivers using our platform, leading to lower than expected revenues. While our revenue nevertheless increased from $12.4 million in FY 2019 to $17.3 million in FY 2020, we had anticipated—prior to the spread of COVID-19—that our revenues would grow to approximately $100 million in FY 2020. Our revenue increased from $17.3 million in 2020 to $38.3 million in 2021.

We continue to closely monitor the impact of the COVID-19 pandemic. Although the overall business performance has showed signs of recovery since the third quarter of 2020, the exact timing and pace of the recovery remain uncertain. As certain regions have reopened, some have experienced a resurgence of COVID-19 cases and reimposed restrictions. The extent to which our operations will continue to be impacted by the pandemic will depend largely on future developments, which are highly uncertain and cannot be accurately predicted, including new information which may emerge concerning the severity of the pandemic, actions by government authorities and private businesses to contain the pandemic or recover from its impact, the availability and distribution of the vaccine, the extent of any virus mutations or new variants of COVID-19, among other things. Even as travel restrictions have been and will continue to be modified or lifted, we anticipate that continued social distancing, altered consumer behavior, reduced travel and commuting and expected corporate cost cutting will be significant challenges for us. The strength and duration of these challenges cannot be presently estimated.

 

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In response to the COVID-19 pandemic, we have adopted and continue to adopt measures based on the then-current conditions in the regions we operate, including temporarily having employees in nearly all office locations work remotely, limiting employee travel and canceling or postponing events and meetings or holding them virtually, temporarily suspending our usual services, other than to certain key business customers, and operating reduced-service for essential workers at no charge.

We remain confident in our ability to navigate this challenging time and continue to focus on our long- term growth opportunities and our business model. With $9.5 million in unrestricted cash and cash equivalents as of December 31, 2021, the additional funds we have raised during 2021 and the additional capital raised in connection with the Business Combination and PIPE Financing, we believe we have sufficient liquidity to continue to support our business operations and to make strategic investments that are in the best interests of our shareholders and other stakeholders. For more information on risks associated with the COVID-19 pandemic, please see the section entitled “Risk Factors”.

Factors Affecting Our Business and Results of Operations

We believe that our future performance and success depend to a substantial extent on the following factors, each of which is in turn subject to significant risks and challenges, including those discussed below and in the section of this prospectus entitled “Risk Factors.”

Our ability to cost-effectively retain and increase the number of riders who use, and their utilization of, our platform, and increase our share of their transportation spend.

We grow our business by attracting new riders to our platform (i.e., unique users taking their first ride with Swvl) and increasing their usage of our platform over time. As a result, the number of riders on our platform and their utilization of our offerings are the key drivers of our B2C business. Our ability to cost-effectively attract new riders and retain and increase the use of our platform by existing riders is critical to scaling our business. More riders accessing offerings on our platform and greater utilization drive increased revenue and profitability. We seek to increase both the number of riders on our platform and the usage of our platform through product innovation, improved user experience, and additional offerings. While we anticipate this increasing level of investment will drive growth through word-of-mouth referrals, we also continue to invest in brand and growth marketing, as well as the use of paid marketing initiatives, rider and driver incentives and marketing partnerships with third parties in an effort to attract new riders to our platform and to enhance rider Utilization (calculated as Total Bookings divided by Total Available Seats, over the period of measurement). New riders in each of fiscal year 2019, fiscal year 2020 and the fiscal year 2021 accounted for approximately 18.2%, 15.5% and 18.2% of our Total Ticket Fares, respectively. Once riders start using Swvl, we seek to provide a quality experience and a diverse offering of routes and products to accommodate different transportation use cases in order to retain riders and encourage repeat usage. Our efforts have resulted in Total Ticket Fares retention in excess of 60%, measured in each of January 2020 and February 2020 prior to the effects of COVID-19. We measure Total Ticket Fares retention by comparing the Total Ticket Fares generated by a cohort of users in their 12th month of activity against the Total Ticket Fares generated by such cohort in their first month of activity. As discussed below, we also intend to expand into new geographical markets, which we believe will also increase the number of riders.

If we fail to continue to attract riders to our platform and grow our rider base, expand riders’ usage of our platform over time or increase our share of riders’ transportation spend, our results of operations would be harmed.

Our ability to cost-effectively attract and retain drivers to use our platform, or to increase utilization of our platform by existing drivers.

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improving access and availability for riders. Our ability to maintain and grow our driver base and increase driver utilization of our platform depends in part on our ability to continue to deliver meaningful earning opportunities for drivers and third party vehicle operators who use our platform, as well as our ability to provide a seamless user experience for drivers that incentivizes continued use of our platform. We therefore continue to invest in developing technology that is intended to not only allow drivers and vehicle operators to maximize earnings while using our platform, but also improves the day-to-day experience for those drivers.

For instance, we believe our development of route optimization technology provides a key incentive for drivers and third party vehicle operators to use our platform. By optimizing our plans, cross-dispatching across Swvl Retail and Swvl Business routes and reducing the amount of time drivers spend moving between routes (as well as assigning routes so that drivers complete their route plans near their homes), we are able to increase the number of drivable routes per day and increase drivers’ and vehicle operators’ earnings. We believe this has contributed to our strong rates of driver retention.

Additionally, maintaining and continuing to grow our base of drivers is critical to delivering a quality experience on our platform. The more dedicated and able drivers that decide to use our platform, the more routes and rides we are able to provide. We also believe this allows us to maintain high quality service and low wait times. Our incentive programs to attract qualified drivers include bonus payments and other incentives to high-performing drivers and vehicle operators. During the COVID-19 pandemic, we provided temporary financial assistance to support drivers using our platform.

Our ability to grow and retain drivers is linked to our ability to maintain and increase the number of riders on our platform. We believe that the more riders we have on our platform, the easier it can be to maintain and attract new drivers to our platform. If we fail to continue to attract drivers to our platform and grow the number of routes we offer, riders’ usage of our platform may decrease and our results of operations would be harmed. In addition, when we enter a new market, we typically need to make significant upfront investments to drive sufficient scale of drivers in order to establish a functioning marketplace for our riders, which could adversely affect our results of operations in the periods in which such investments are made and delay our efforts to achieve profitability.

Our ability to successfully develop new offerings on our platform and enhance our existing offerings.

As part of our business, we consider how our core assets – our technology, access to a large vehicle fleet and our customer base – can be leveraged to generate new streams of revenue while minimizing incremental costs. For example, we initially launched with our core B2C retail offering, through which we connect riders using our platform to a network of minibuses and other vehicles that operate on fixed and semi-fixed routes within the cities we serve. We have since expanded our B2C offerings to include Swvl Travel, which allows riders to book and take intercity, long-distance trips. We also opened and manage a physical Swvl Travel shop in Hurghada, Egypt, which allows riders to book intercity trips in person in a convenient location for frequent travelers.

We have also diversified our revenues beyond B2C offerings with our TaaS enterprise products, which are marketed as Swvl Business and which have historically been higher-margin products. Swvl Business enables our corporate customers (as well as schools and municipalities) to use Swvl’s technology and platform to optimize the commute and travel programs they operate for their employees (and students). Since Swvl Business uses technology already developed for our B2C offerings, its development and deployment does not (and did not) impose significant additional R&D costs on our business. We currently intend to expand our Swvl Business offerings with SaaS in 2022. Our SaaS offerings are expected to be targeted at corporate customers (as well as schools and municipalities) that operate their own vehicle fleets, with specific services tailored to the needs of each customer. We currently intend for our basic offerings to include access to our dedicated Swvl Business application, which centralizes passenger management, billing, scheduling, data analytics and support functions in one platform. At higher service tiers, we currently intend to provide the use of our network optimization and

 

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Dynamic Routing technologies, as well as access to our fleet management modules, which will enable our customers to more easily manage their drivers and track their rides. We also currently plan to offer consulting and reporting services. We intend to use a tiered cost-plus pricing model for our SaaS products, which we expect will allow us to enhance our margins.

Our ability to invest effectively in technology and research and development and to successfully integrate them into our business.

Our technology is a critical component of our business proposition. Our ability to provide a seamless experience for our riders and drivers, to effectively predict rider demand, to create efficient, high-utilization route plans and to price our offerings accordingly depends on ongoing innovation and the effectiveness of our data analysis, modeling and algorithms. As a result, we have made, and will continue to make, significant investments in research and development and technology in an effort to improve our platform and to attract and retain drivers and riders, expand the capabilities and scope of our offerings, and enhance our customer experience. We review and target our research and development activities on an ongoing basis based on the needs of our business. We believe that continued optimization of demand prediction, routing and pricing can improve our user base, utilization rates and customer experience, which we believe in turn can reduce inefficiency costs and improve our margins.

Our engineers and data scientists are critical to the success of our business and we will continue to invest in these areas. In addition, we will continue to dedicate significant resources to research and development efforts, focusing on continuing to improve our proprietary technology and developing innovative applications.

Our ability to operate in distinct geographic markets and our ability to expand into new markets.

Our capacity for continued growth and ability to achieve and maintain profitability depends in part on our ability to operate and compete effectively in different geographic markets. Each market is subject to distinct competitive and operational dynamics. These include our ability to offer more attractive transportation offerings than alternative options, our ability to efficiently attract and retain drivers and riders, ride length and the number of routes available on our platform, all of which affect our sales, results of operations and key business metrics. As a result, we may experience fluctuations in our results of operations due to the changing dynamics in the geographic markets where we operate.

Since our founding, we have been able to expand into new geographies and markets. Since 2017, we expanded our operations to more than 115 cities in over 20 countries (not including the countries of operation of Zeelo, a company which Swvl announced a definitive agreement to acquire in April 2022), with our core Retail offering available in select cities in Egypt, Kenya, Pakistan and Jordan. In January 2019, we commenced operations in Nairobi, Kenya. In the second half of 2019, we commenced operations in major cities in Pakistan, including Lahore, Islamabad and Karachi, and relocated our headquarters from Egypt to Dubai, United Arab Emirates. In 2020 and 2021, we also launched TaaS offerings in the United Arab Emirates, Jordan, Saudi Arabia and Malaysia.

On August 18, 2021, we entered into a definitive agreement to acquire a controlling interest in Shotl, a mass transit platform that partners with municipalities and corporations to provide on-demand bus and van services in Europe, Latin America and the Asia Pacific region, which expanded our geographic footprint to 22 additional cities in 10 countries. The transaction closed on November 19, 2021.

On November 16, 2021, we entered into a definitive agreement to acquire a controlling interest in Viapool, a mass transit platform currently operating in Buenos Aires, Argentina and Santiago, Chile. The transaction closed on January 14, 2022.

 

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On March 24, 2022, we entered into a definitive agreement to acquire a controlling interest in door2door, a high-growth mobility operations platform that partners with municipalities, public transit operators, corporations, and automotive companies to optimize shared mobility solutions across Europe. The transaction closed on June 3, 2022.

On April 25, 2022, we announced a definitive agreement to acquire Volt Lines, a Turkey-based B2B and Transport as a Service mobility business. The acquisition builds on Swvl’s recent acquisitions of controlling stakes in Shotl and Viapool, acquisition of door2door and pending acquisition of Zeelo. The transaction closed on May 25, 2022.

On April 28, 2022, we announced a definitive agreement to acquire Zeelo, the UK’s largest smart bus platform and technology scale-up, measured by bookings. We believe joining forces with Zeelo provides a launchpad to rapidly land and expand business operations in three strategic developed markets including the UK, South Africa and the US with Zeelo’s seasoned team of over 160 staff across the globe, including 29 software engineers based out of Zeelo’s R&D hub in Barcelona.

A core component of our growth strategy is to identify opportunities for market entry in countries and cities where we can leverage what we believe are the competitive advantages offered by our technology and platform. We examine factors such as total addressable market size and average fare per trip to assess whether expansion offers a viable path to profitability. We also review the quality of existing public transportation infrastructure to assess ease of market penetration and convertibility of public transportation users to our platform. For our Swvl Travel offering, we also assess factors such as the number of large cities in a country and the frequency of intercity travel to understand potential market size. Other considerations, such as ease and cost of doing business, as well as political stability, also factor into our expansion planning.

Our ability to enter into strategic acquisitions and partnerships, and successfully integrate them into our business or achieve our objectives of the acquisitions or strategic partnerships.

We have made, and intend to continue to make, strategic acquisitions to expand our user base, enter new markets and add complementary products and technologies. Our strategic acquisitions may affect our future financial results. For example, we recently acquired controlling interests in Shotl and Viapool, acquired door2door and Volt Lines, and announced an agreement to acquire Zeelo, a mass transit platform that is expected to expand our geographic footprint into Europe. Integration of the Shotl, Viapool, door2door, Volt Lines and Zeelo businesses and operations will be a complex, time-consuming and costly process, particularly given that the acquisition will significantly diversify the geographic areas in which we operate. In addition, we may not realize all of the anticipated benefits from the acquisition of controlling interests in Shotl and Viapool and acquisitions of door2door, Volt Lines and Zeelo, such as cost savings and revenue enhancements, for various reasons, including the fact that diligence was of a limited scope and performed by third party business consultants (and, with respect to Shotl, solely with respect to Shotl’s business in Spain), difficulties integrating operations and personnel, higher costs, COVID-19 related interruption, unknown liabilities and fluctuations in markets.

We believe such acquisitions complement our business, but there is no assurance that such acquired businesses will be successfully integrated into our business or generate substantial revenue, and operating costs and integration risks from these and future acquisitions may negatively affect our financial performance.

We also enter into a variety of strategic partnerships that contribute to several aspects of our business, including partnerships that bring more ride volume to our platform and help us increase brand awareness.

Our ability to compete effectively.

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public transportation. We strive to harness the competitive advantages of our offerings to convert users of public transportation into users of our platform. We also compete against taxi companies and traditional ridesharing platforms, such as Uber. By offering comfortable, reliable and safe rides at an accessible price point, our offerings aim to attract users of these single-rider services by offering a lower-cost alternative that offers a better rider experience than public transportation. We believe we have differentiated our business from these competitors by building a diverse set of offerings on a transportation network at scale, while upholding our culture and values and creating a brand that embodies a commitment to exceptional offerings and social responsibility. However, we must continue to respond to competitive pressures. Consequently, we intend to keep investing in our platform to attract and retain drivers and riders, and respond to shifts in competitors’ pricing levels, revenue models or business practices. If we are not able to compete effectively with our competitors, including our main competition of public transportation, our results of operations will be harmed.

Our ability to maintain and continue developing our reputation and to promote brand awareness and to optimize driver and rider incentives.

We believe that maintaining and enhancing our reputation and brand is critical to our ability to attract and retain employees and platform users. A core component of our marketing strategy involves focusing on expanding ridership in existing markets while rapidly accelerating brand awareness in new territories. We utilize a multi-channel approach, built on a foundation of digital marketing, to develop awareness of our offerings and expand our user base. We use a digital-focused marketing approach because we believe it offers the most effective means of accessing our target demographics in a cost-effective manner. Our advertising is conducted primarily through social media campaigns and placed web advertisements. We also rely on search engine optimization and application marketplace optimization tools to build and maintain the prominence of our brand. In new markets, we also advertise our offerings through offline advertising, such as billboards and events at public venues (such as shopping malls) where we may host promotional events, giveaways and conduct in-person account activations. We also seek to develop and maintain partnerships with other businesses, such as telecom companies, that allow us to deploy promotions and incentives to the customers of such businesses. We monitor the effectiveness of our marketing spend via several metrics, including customer acquisition cost.

We offer various incentives from time to time, such as promotions for new riders and discounts for bulk purchases or specific trips. We also operate a referral program that offers incentives for riders to refer new users.

The impact of uncertainties with respect to government laws, policies and regulations in the markets in which we operate.

We are subject to a wide variety of laws in the jurisdictions in which we operate. The ridesharing industry and our business model are relatively nascent and rapidly evolving. Regulations have impacted or could impact, among others, the nature of and scope of offerings we are able to make available through our platform, the pricing of offerings on our platform, our relationship with, and incentives, fees and commissions provided to or charged from, drivers, incentives provided to riders, our ability to operate in certain segments of our business, our ownership percentage in operating entities that may be subject to foreign ownership restrictions and insurance we are required to maintain. For example, in Egypt we are subject to licensing and other requirements under Law No. 87 of 2018 and the Executive Regulation by Presidential Decree No. 2180 of 2019, which regulate ridesharing companies such as ours. We have also previously entered into agreements with the Egyptian Competition Authority in relation to the regulation of pricing and offerings in our industry. We expect that our ability to manage our relationships with regulators in each of our markets, as well as existing and evolving regulations, will continue to impact our results in the future. Due to the nascent and uncertain state of the legal frameworks governing the ridesharing industry in the jurisdictions in which we operate, we have not obtained all of the required licenses and permits for certain cities where we operate; however, we are continuously making efforts to obtain such licenses and permits. Please see the section entitled “Risk Factors— Risks Related to Regulatory, Legal and Tax Factors Affecting Swvl—Uncertainties with respect to the legal systems in the jurisdictions in which Swvl operates, including changes in laws and the adoption and interpretation of new laws and regulations, could adversely affect Swvl’s business, financial condition and operating results”.

 

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We are also subject to a number of laws and regulations specifically governing the Internet and mobile devices, and these laws and regulations are constantly evolving. Existing and future laws and regulations, or changes thereto, may impede the growth and availability of the Internet and online offerings, require us to change our business practices or raise compliance costs or other costs of doing business. In particular, as we expand our operations internationally, we expect to become subject to GDPR, which regulates the collection, control, sharing, disclosure, use and other processing of personal data and imposes stringent data protection requirements and significant penalties, and the risk of litigation or other action, for noncompliance. The GDPR has resulted in and will continue to result in significantly greater compliance burdens and costs for companies with users and operations in the European Union. As we expand our business internationally, we will become subject to these costs and burdens in an effort to comply with GDPR.

Components of Results of Operations

Revenue

Revenue represents the gross amount of fares charged to end-users of the Swvl platform, as reduced by end-user discounts and promotions, sales refunds, uncollected cash and sales waivers. For further details on our revenue recognition, please see the subsection entitled “Critical Accounting Estimates—Revenue”.

Cost of Sales

Cost of sales consists of costs directly related to delivering transportation services, which include payments to captains for operating our routes (net of any deductions, including amounts charged to captains on account of breach of terms of service), bonuses payable to captains and tolls and fines paid by Swvl. Cost of sales does not include any depreciation or amortization expenses. Our depreciation and amortization expenses are almost exclusively attributable to non-revenue generating activities, including depreciation of our facilities and equipment used to support back office operations and depreciation of right-of-use assets associated with corporate leases.

General and Administrative Expenses

General and administrative expenses primarily consist of personnel-related compensation costs including employee share scheme charges, professional services fees, technology costs, office costs, travel costs, depreciation, insurance, rent, bank fees, foreign exchange losses/gains, utilities, communication and other corporate costs. General and administrative expenses are expensed as incurred.

Selling and Marketing Expenses

Selling and marketing expenses primarily consist of growth marketing expenses, offline marketing expenses, personnel compensation expenses and the costs of credits offered to riders for referring new riders. Selling and marketing costs are expensed as incurred.

Provision for Expected Credit Losses

This consists of the provision for expected credit loss against trade and other receivables.

Other Expenses

Other expenses consist primarily of indirect tax expenses and other expenses not categorized elsewhere.

Finance Income

Finance income consists primarily of interest income from bank deposits.

 

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Finance Costs

Finance costs consist primarily of lease finance charges and interest expense on the convertible notes issued by Swvl during the year ended December 31, 2021 (the “Swvl Convertible Notes”).

Tax

This primarily relates to the deferred tax asset created on tax losses incurred by the Company, which can be set off against future taxable income.

 

A.

Operating Results

Results of Operations

The following selected consolidated financial data are derived from the audited financial statements of the Company, and should be read in conjunction with our consolidated financial statements, the related notes and the rest of the section of this prospectus entitled “Operating and Financial Review and Prospects”. The historical results are not necessarily indicative of the results of future operations.

 

     Year Ended December 31  

($ million)

   2021      2020      2019  

Revenue

     38.3        17.3        12.4  

Cost of sales

     (48.9      (26.4      (33.8

Gross loss

     (10.6      (9.1      (21.4

General and administrative expenses

     (74.7      (18.6      (10.8

Selling and marketing expenses

     (13.7      (4.7      (8.3

Provision for expected credit losses

     (1.3      (0.7      (0.3

Other expenses

     (0.2      (0.2      (0.1
  

 

 

    

 

 

    

 

 

 

Operating loss

     (100.5      (33.4      (40.9

Finance income

     0.2        0.6        0.4  

Finance costs

     (45.9      (0.1      (0.1
  

 

 

    

 

 

    

 

 

 

Loss for the year before tax

     (146.2      (32.9      (40.6

Tax

     4.7        3.2        5.4  
  

 

 

    

 

 

    

 

 

 

Loss for the year

     (141.4      (29.7      (35.3

Other comprehensive income

     (0.4      (0.3      1.2  
  

 

 

    

 

 

    

 

 

 

Total comprehensive loss for the year

     (141.8      (30.0      (34.1

FY 2021 Compared to FY 2020

Revenue

 

     Year Ended December
2021
        

($ million)

   2021      2020      FY 2020 – FY
2021 %
Change
 

Total Revenue

   $ 38.3      $ 17.3        121

Revenue for the year ended December 31, 2021 was approximately $38.3 million, an increase of approximately $21 million, or 121%, from the year ended December 31, 2020. The increase in revenue resulted primarily from an overall increase in the order activity on the Swvl platform and increased utilization rate of the

 

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existing vehicles in Total Ticket Fares (an operating measure representing the gross order volume processed on our platform) (See “Key Business and Non-IFRS Financial Measures—Total Ticket Fares”).

We disaggregate revenue by the type of customer served, with revenue driven from Retail and Travel together considered as “business to consumer”, revenue driven from TaaS considered as “business to business” and revenue driven from SaaS considered as “business to business.” Below is the disaggregated revenue information for the year ended December 31, 2021 and 2020:

 

     Year Ended December 31         

($ million)

   2021      2020     

FY 2020 – FY

2021 %

Change

 

Business to customer

   $ 18.7      $ 6.6        183

Business to business “TaaS”

     19.6        10.7        83

Business to business “SaaS”

          —          N/A  

 

*

Less than $100,000

“Business to consumer” revenues for the year ended December 31, 2021 were approximately $18.7 million, an increase of approximately $12.1 million, or 183%, compared to the year ended December 31, 2020. The increase in revenue resulted primarily from an overall increase in the order activity on the Swvl platform and increased utilization rate of the existing vehicles in Total Ticket Fares (an operating measure representing the gross order volume processed on our platform) (See “Key Business and Non-IFRS Financial Measures—Total Ticket Fares”).

“Business to business” TaaS revenues for the year ended December 31, 2021 were approximately $19.6 million, an increase of approximately $8.9 million, or 83%, compared to the year ended December 31, 2020. The increase in revenue resulted primarily from an overall increase in the order activity by corporate customers on the Swvl platform and some recovery in business performance from the COVID-19 pandemic.

“Business to business” SaaS revenues for the year ended December 31, 2021 were less than $100,000, attributable to our acquisition of Shotl, by which we generated revenue in relation to SaaS products operated by Shotl.

Cost of Sales

 

     Year Ended December 31         

($ million)

   2021      2020      FY 2020 – FY
2021 %
Change
 

Captain costs, net of deductions

   $ 47.1      $ 23.2        103

Captain Bonuses

     1.1        1.2        -8

Tolls and Fines

     0.7        2.1        -67

Total Cost of Sales

   $ 48.9      $ 26.4        85

Cost of sales for the year ended December 31, 2021 was approximately $48.9 million, an increase of approximately $22.5 million, or 85%, compared to the year ended December 31, 2020. This increase is primarily a result of an overall increase in Captain costs, which is a direct result of the overall increase in the demand and volume of order activity on the Swvl platform. These increases were partially offset by $0.6 million in deductions in Captain costs that relate to overall Captain performance and fulfillment of contractual obligations. High-performing drivers and vehicle operators are eligible, at Swvl’s discretion, for bonus payments based on several performance measures. Captain bonuses for the year ended December 31, 2021 were approximately $1.1 million, a decrease of approximately $0.1 million, or -8% compared to the year ended December 31, 2020. This decrease was a result of reductions in our bonus programs to existing drivers and vehicle operators. Tolls

 

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and fines for the year ended December 31, 2021 were approximately $0.7 million, a decrease of $1.4 million, or 67%, compared to the year ended December 31, 2020. This decrease is due to improvement in Captain performance and limitations on approvals by Swvl of reimbursement to drivers and vehicle operators of tolls and fines.

General and Administrative Expenses

 

     Year Ended December 31         

($ million)

   2021      2020     

FY 2020 – FY

2021 %

Change

 

General and administrative expenses

   $ 74.4      $ 18.6        302

General and administrative expenses for the year ended December 31, 2021 were approximately $74.7 million, an increase of approximately $56.1 million, or 302%, compared to the year ended December 31, 2020. The increase was primarily due to an increase in employee share scheme charges from $2.8 million to $33.6 million in FY 2020 to FY 2021 resulting from an increase in the fair value of the Swvl Options (as defined in the section “Compensation—Swvl 2019 Share Option Plan”) as at December 31, 2021, ranging from $13,430 per Swvl Option, as compared to $2,353.6 per Swvl Option as at December 31, 2020. Furthermore, the number of Swvl Options issued during the year ended December 31, 2021 were 3,874 as compared to 2,267 for the year ended December 31, 2020. Furthermore, the total number of outstanding Swvl Options were 5,639 as at December 31, 2021 as compared to 2,958 as at December 31, 2020. The main factor driving the fair value of the Swvl Options is the estimated business valuation of Swvl as a result of the Business Combination and the share issuance to the SPAC’s shareholders.

Pursuant to and in accordance with the terms of the Business Combination Agreement, in connection with the Business Combination, each outstanding Swvl Option was assumed and converted into an option to purchase approximately 1,509.963 shares of Class A Ordinary Shares, at an exercise price equal to the exercise price per share of such Swvl Option prior to the Business Combination divided by approximately 1,509.963.

Further, the increase results from a $8.4 million increase in staff costs on account of headcount increasing from 516 to 606 from FY 2020 to FY 2021, professional fees of $7.2 million, and technology costs of $2.8 million during the year ended December 31, 2021, as compared to the year ended December 31, 2020.

Selling and Marketing Expenses

 

     Year Ended December 31         

($ million)

   2021      2020     

FY 2020 – FY

2021 %

Change

 

Selling and marketing expenses

     13.7        4.7        191

Selling and marketing expenses for the year ended December 31, 2021 were approximately $13.7 million, an increase of approximately $9 million, or 191%, compared to the year ended December 31, 2020. The increase was primarily due to growth marketing expenses amounting to $7.9 million and staff costs amounting to $3.4 million in the year ended December 31, 2021, as compared to $2.4 million and $1.3 million, respectively, during the year ended December 31, 2020. Increases in growth marketing expenses and staff costs are on account of increased online and offline marketing during the year ended December 31, 2021 as compared to the year ended December 31, 2020 and higher headcount being 516 and 606 from FY 2020 to FY 2021, respectively.

 

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Provision for Expected Credit Losses

 

     Year ended December 31         

($ million)

   2021      2020     

FY 2020 – FY

2021 %

Change

 

Provision for expected credit losses

     1.3        0.7        86

Provision for expected credit losses for the year ended December 31, 2021 was approximately $1.3 million, an increase of approximately $0.6 million, or approximately 86%, compared to the year ended December 31, 2020. The increase in provision for expected credit losses resulted from the increase in the receivable balance, which is in line with the business growth in the period ended December 31, 2021, compared to the year ended December 31, 2020.

Other Expenses

 

     Year ended December 31         

($ million)

   2021      2020     

FY 2020 – FY

2021 %

Change

 

Other expenses

     0.2        0.2       

 

*

Percentage not meaningful

Other expenses for the year ended December 31, 2021 were approximately $0.2 million, as compared to $0.2 million for the year ended December 31, 2020. Other expenses primarily represent non-recoverable indirect taxes incurred during 2021 on account of the higher number of transactions.

Finance Income and Finance Cost

 

     Year ended December 31         

($ million)

   2021      2020     

FY 2020 – FY

2021 %

Change

 

Finance income

     0.2        0.6       

Finance costs

     45.9        0.1       

 

*

Percentage not meaningful

Finance income for the year ended December 31, 2021 was approximately $0.2 million, as compared to $0.6 million for the year ended December 31, 2020. The decrease is driven by the release of government treasury bills during the year ended December 31, 2021 which was held by Swvl Egypt.

Finance costs for the year ended December 31, 2021 were approximately $45.9 million, as compared to $0.1 million for the year ended December 31, 2020. The increase in finance costs was primarily due to the embedded derivatives relating to the Swvl Convertible Notes carried at fair value through the condensed interim consolidated statement of comprehensive income for FY 2021. The charge is on account of the increase in fair value from inception of the Swvl Convertible Notes to December 31, 2021. In addition, there was an increase of $1.4 million in accrued interest expense on account of the Swvl Convertible Notes.

 

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Tax

 

     Year Ended
December 31
        

($ million)

   2021      2020     

FY 2020 – FY

2021 %

Change

 

Tax

     4.7        3.1        52

Tax benefit for the year ended December 31, 2021 was approximately $4.7 million, an increase of approximately $1.6 million, or 52% compared to the year ended December 31, 2020. The increase was primarily on account of the additional tax losses in the consolidated financial statements of FY 2021, on which Swvl recognizes deferred tax assets.

Tax for the year ended December 31, 2020 was approximately $3.2 million, a decrease of approximately $2.2 million, or 41%, compared to the year ended December 31, 2019. The decrease in tax was primarily due to a reduction in the underlying tax losses during the year.

Key Business and Non-IFRS Financial Measures

In addition to the measures presented in our consolidated financial statements, we use the following key business and non-IFRS financial measures to help us evaluate our business, identify trends affecting our business, formulate business plans, and make strategic decisions.

 

     Year Ended December 31  
     2021     2020     2019  

Total Bookings (in millions) (1)

     32.3       16.8       19.1  

Total Ticket Fares (in millions) (2)

   $ 54.9     $ 26.2       25.9  

Average Ticket Fare (3)

   $ 1.7     $ 1.56     $ 1.36  

Total Available Seats (in millions) (4)

     39.2       22.6       31.9  

Cost per Available Seat (5)

   $ 1.26     $ 1.17     $ 1.06  

Utilization (6)

     82     74     60

Adjusted EBITDA (in millions) (7)

     (64.6     (29.7     (40.4

Notes:

(1)

Total Bookings is an operating measure representing the total number of seats booked by riders and corporate customers (completed or cancelled) on our platform, over the period of measurement.

(2)

Total Ticket Fares is an operating measure representing the total dollars processed on Swvl’s platform for seats booked.

(3)

Average Ticket Fare is an operating measure representing the average fare charged to riders and corporate customers per booked seat, calculated as Total Ticket Fares divided by the Total Bookings, over the period of measurement.

(4)

Total Available Seats is an operating measure representing the total number of seats made available on our platform (whether utilized or not), over the period of measurement.

(5)

Cost per Available Seat means the average cost to Swvl for each seat made available on our platform, calculated as cost of sales divided by Total Available Seats, over the period of measurement. Cost per Available Seat is a function of Total Available Seats, and does not vary based on Utilization.

(6)

Utilization is an operating measure representing the level of occupancy of the seats made available on our platform (i.e., the proportion of the seats made available on our platform that were occupied by riders), calculated as Total Bookings divided by Total Available Seats, over the period of measurement.

(7)

Adjusted EBITDA is a non-IFRS financial measure calculated as loss for the year adjusted to exclude: (i) depreciation of property and equipment, (ii) depreciation of right-of-use assets, (iii) employee share-

 

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  based payments charges, (iv) foreign exchange gains/losses, (v) provision for employees’ end of service benefits, (vi) indirect tax expenses, (vii) finance income, (viii) finance costs, (ix) transaction costs relating to the Business Combination and (x) tax. For a reconciliation of Adjusted EBITDA to the most directly comparable IFRS measure please see the section entitled “Reconciliation of Non-IFRS Financial Measures”.

Total Bookings

Total Bookings is an operating measure defined as the total number of seats booked by riders and corporate customers on our platform, over the period of measurement. We use this metric to measure the actual volume of seats booked on our platform and utilized on our fleet (including full capacity of completed routes for TaaS customers without regard to actual Utilization). While Total Bookings have historically grown with the growth of our business, we experienced a decline from 19.1 million Total Bookings in FY 2019 to 16.8 million Total Bookings in FY 2020, primarily as a result of decreased demand resulting from the COVID-19 pandemic. This decrease was partially offset by geographic expansion and an increase in the number of riders using our platform.

 

     Year ended December 31         

($ million)

   2021      2020      FY 2020 – FY
2021 %
Change
 

Business to customer

     10.7        7.2        48.6

Business to business

     21.6        9.6        125.0

Total Bookings

     32.3        16.8        92.3

Although we expect a return to growth in Total Bookings as the markets in which we operate recover from the COVID-19 pandemic, uncertainty remains as to the nature and timing of a full recovery. Total Bookings increased from 16.8 million during the year ended December 31, 2020 to 32.3 million during the year ended December 31, 2021, showing some signs of recovery in the markets in which we operate. However, the increase in Total Bookings is primarily a result of an increase in the order activity by corporate customers on the Swvl platform and the modification or lifting of COVID-19 restrictions, including increased business travel and commuting.

Total Ticket Fares

Total Ticket Fares is an operating measure representing the total dollars processed on Swvl’s platform for seats booked. We use Total Ticket Fares as an indicator of our growth and business performance as it measures the dollar volume of transactions on our platform. Total Ticket Fares has historically increased as our business has grown. As a result of the impact of the COVID-19 pandemic, Total Ticket Fares declined during the second quarter of FY 2020. Recovery started from the third quarter of FY 2020, with Total Ticket Fares returning to monthly levels substantially near pre-COVID-19