Ride-sharing group Swvl agrees $100mn deal to buy UK start-up Zeelo

A Nasdaq-listed ride-sharing company has agreed a $100mn deal to buy UK start-up Zeelo, the latest in a string of acquisitions as technology companies push into the transport industry.

Dubai-based Swvl, which listed in New York this month through a merger with a blank cheque company, has rattled through five acquisitions in the past eight months.

The purchase of Zeelo, an app that organises bus shuttles for businesses and schools, gives Swvl access to the UK market and is expected to be announced on Thursday, according to two people familiar with the matter.

Technology start-ups such as Swvl and Zeelo hope to shake up the public transport industry by offering a booking platform for private buses. Their services are more flexible and responsive to shifting demand than normal scheduled routes.

Despite offering an alternative to public transport, they pitch themselves as environmentally friendly because they help to push private cars off the road.

Mass transit technology companies have grown in recent years, as advances in data science offer an alternative to scheduled bus services, drawing comparisons with the rise of Uber in the taxi market.

Shares in Swvl, which has a market capitalisation of $850mn, have fallen about 30 per cent since they opened on Nasdaq on April 1, underperforming the wider index that has dropped roughly 10 per cent.

The share fall comes amid a broad decline in technology shares and as blank cheque deals, which are reverse mergers through a shell company that then lists, have fallen out of favour with some investors.

Zeelo was founded by two British entrepreneurs who sold an earlier mobility company to Addison Lee in 2014, and has operations in the US, UK and South Africa.

The company has raised $19.6mn in funding, including a recent $12mn round led by ETF Partners, with participation from Jaguar Land Rover’s venture capital arm.

Swvl competes with the more established Via Transportation, which announced plans to float in the US in December, and German company FlixBus, which also offer bus services.

Swvl began by targeting individual passengers travelling in developing markets with comparatively poor transport infrastructure.

The push into the UK is aimed at businesses and schools, which run their own bus services to pick up staff and children.

Swvl has prioritised acquisitions over organic growth because of the high costs of research and development in each market.

In recent months, it has agreed deals to buy four other similar mobility companies: South American company Viapool, Spain’s Shotl, Turkish group Volt Lines and Berlin-based door2door.