SWVL set for KES 1.5b cash injection into the Kenyan market
SWVL has announced plans to pump $15 million (KES 1.5 billion) into its Kenyan operations. With this financial injection, SWVL not only wants to improve their current operations but also scale its business into other towns and routes.
“Kenya is a market with a need for a stable solution for the perennial traffic snarl-ups and SWVL believes that we can be of great benefit to the local consumer and the transport sector as a whole,” SWVL co-founder and CEO, Mostafa Kandil said.
“We are very excited to provide a solution that makes the lives of Kenyans easier whilst proving beneficial to the Kenyan transport sector,” he added.
In addition to the funding, the team also announced that they will be adding more routes to their offering.
SWVL launched into the Kenyan Market in February 2019 at Nairobi Garage. The company initially started off with four routes and has over the last six months increased to about fifty-five routes. They are now due to add more routes to cover more areas in Nairobi, as well as begin operations outside the capital city.
“I believe the potential for growth and value creation is tremendous and given the different entities providing varied solutions, we are looking to fill a gap that has yet to be sufficiently covered by what is already available. That is what has prompted us to expand our route offering to match the convenience of ride-hailing services but at the same time matching the capacity provided by the traditional matatu industry for an even larger customer base than we have before”, said Shivachi Muleji, SWVL General Manager for Kenya.
How SWVL works
The tech company leases the vehicles that currently include 11-seater and 14-seater vans as well as 22-seater shuttles at a daily rate of $70 (Sh7,000) and $150 (Sh15,000) to ply the various routes. It tops up the daily collection if the earnings for the day are less than the daily leasing amount but collects any income above the agreed rate.
The SWVL app allows users to book trips using their mobile devices. They then get notifications of the nearest pick-up point, price and time by the bus.
The driver’s contact and registration number of the vehicle, as well as live map update, appear on the app interface for easy identification once the buses arrive.
“We see this as a win-win for us as SWVL and for Kenyans because this investment will not only allow us to grow the size of our fleet but also by extension create employment and support the government in providing high-quality public transportation,” he concluded.
The first six months of the company’s operations had essentially been a pilot phase, and the move to increase their investment and the routes they operate in is seen as the official launch of their services locally.
SWVL recently closed its $42 million Series B-2 funding led by BECO Capital and Sweden’s Vostok New Ventures. This increased the startup’s valuation to $150 million. This comes almost seven months after it was valued at around $100 million after the last round of fundraising. This makes it among the best-funded start-ups in the region.
Tech-based solutions in the transport sector have been causing a ripple locally with Uber making its entry in the taxi business several years ago despite protests by taxis at the onset.
Kenyan-based Little Cab also launched a similar product some time back known as the Little Shuttle a similar shuttle service in the market while Safiri Express is still in the pilot stage of data collection.
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