Dubai-based transport startup Swvl has agreed to buy Shotl, an Uber-like service for bus and van operators that caters to municipalities, corporations and educational institutions, a source familiar with the matter told Reuters.
Founded in Egypt in 2017, Swvl also operates a digital platform that allows passengers to reserve and pay for rides with bus operators along fixed routes.
The source, who refused to be identified because the talks are not public yet, did not disclose the financial terms of the deal.
The deal is the latest in the transport technology sector globally as companies look to add heft or raise money through public listings.
Grab, Southeast Asia’s biggest ride hailing-to-food delivery group, is gearing to go public through a merger worth nearly $40 billion with a blank check firm. Chinese ride hailing company Didi Global Inc also raised $4.4 billion in its US initial public offering in June.
Swvl last month agreed to merge with blank check firm Queen’s Gambit Growth Capital in a $1.5 billion deal, setting the stage for a Nasdaq listing in the fourth quarter of this year.
The company currently operates in 10 cities across six countries and makes more than 3 million trips a month, a number it aims to increase to 2 million a day by 2025.
Barcelona-based Shotl will serve as Swvl’s hub in Europe and more than double the company’s geographic footprint, according to the source. Shotl operates in 22 cities across 10 countries, including Brazil and Japan.
The company serves people in thinly populated areas that often lack easy access to transport.
The deal also provides Swvl with an entry point into autonomous driving projects, primarily through Shotl’s participation in a project led by the European Commission to demonstrate the impact of self-driving minibuses on the future public transport networks.
Swvl expects to turn its first profit in 2024, its chief financial officer, Youssef Salem, told Reuters earlier this month.
Swvl, which has a network of 5,000 buses, 3,000 of which are in Egypt, also expects to expand into other activities such as logistics, advertising and financial services beginning in 2023. (Reporting by Noor Zainab Hussain in Bengaluru; Editing by Saumyadeb Chakrabarty)