Backed by 30+ unicorn founders and institutions, Norrsken22 raises $205 million to back high-growth companies in Africa
Norrsken22, an Africa-focused venture capital firm, has reached final close at $205 million—$5 million more than its goal—to back African startups that are ready to scale, otherwise called growth-stage startups. First launched in January 2022 and reaching the first close at $110 million, the Norrsken22 African Tech Growth Fund counts wealthy Swedish founders including Skype co-founder Niklas Zennström, iZettle co-founder Jacob de Geer, and Delivery Hero co-founder Niklas Östberg as limited partners; Flutterwave co-founder and CEO, Olugbenga Agboola also invested in the tech growth fund. According to TechCrunch, approximately 59% of the funding came from a consortium of 30 unicorn founders globally. Institutional investors in the fund include Standard Bank Group Ltd., Norfund, British International Investment, the International Finance Corporation, and the US International Development Finance Corporation. In October African-focused venture capital firms announced deals worth $144.3 million (excluding grants) per data from funding tracker Africa: The Big Deal. Since January deals worth $1.3 billion have been announced compared to $2.9 billion in 2022 and $3.3 billion in 2021, according to the same report. At the same time, the pace of growth-stage investments in African startups has declined; in 2023 there have been only 26 Series A and onwards deals disclosed according to analysis of data from Africa: The Big Deal. This compares unfavourably with 69 deals in the same category in 2022, and 76 in 2021. Large deals from the continent’s Series A and onwards firms used to make up the bulk of venture capital investments as investments and valuations raced upward globally. “We used to markup valuations almost every quarter,” one seed-stage venture capital investor told TechCabal. Seed-stage venture capital firms have raised millions from local and international limited partners to find and back early-stage companies, but the continent’s pool of dedicated growth-stage capital has remained limited. Norrsken22 is one of the few growth-stage funds dedicated to backing African startups. Its sister asset manager, Africa Seed Fund is currently in talks to raise additional capital to support early-stage companies building out another end of the pipeline.
Read MoreNairobi will host the 2024 Africa Fintech Summit
The 11th edition of the Africa Fintech Summit will be held in Nairobi, Kenya in 2024, said Zekarias Amsalu, the co-founder of Africa Fintech Summit at the ongoing 10th edition of the summit in Lusaka, Zambia. “We are excited to be in Nairobi next year,” said Andrew Barsden, the summit’s lead organiser. “Additionally, the relaxed visa requirements for Africans announced by President William Ruto will help in making the event much more open and inclusive to more people,” Barsden added. Key Takeaways 2024 Africa Fintech Summit to be held in Nairobi, Kenya. Organisers said the country relaxed visa requirements as one of the motivations. It will be the 11th edition of the summit. Some possible format changes in Nairobi The Africa Fintech Summit is often a two-day event, with the main panels and activities happening on day one, while day two consists of pitch events and other auxiliary activities. Barsden shared that in 2024, the event might be spread over three days to facilitate more networking opportunities for delegates. “We are also looking at including numerous excursions in the country for delegates, ”said Barsden. Over the course of next year, the summit will hold roundtable discussions with regulators, including ministers and governors, in major cities like Lusaka, Cape Town, Nairobi and Washington DC to facilitate discussions on fintech regulatory frameworks. The Africa Fintech Summit held its first event in Washington D.C in April 2018.
Read MoreExclusive: Chipper Cash expands partnership with Visa on card issuance
Chipper Cash has expanded its partnership with Visa to continue their collaboration on card issuance. The fintech hopes to leverage Visa’s capacities. Chipper Cash, one of Africa’s most valuable fintech startups, is partnering with global payments company Visa on strategic partnerships ranging from card issuance to product marketing. Both companies have worked together since 2021 on the rollout of Chipper Card to support consumer payments in Chipper Cash’s operating markets, especially in Africa. The new partnership builds on this existing arrangement and will see both fintechs expand collaboration on card issuance while also joining forces across regulatory and functional areas such as Visa licensing and marketing on the back of Chipper’s expertise and Visa’s network capabilities. Chipper Cash, which claims to have issued one million virtual cards, hopes to leverage Visa’s experience and investment across more areas of its business, especially as the American payments network expands its footprint in Africa. Last December, Visa pledged to invest $1 billion in the continent over the next five years, a plan that could include acquisitions and new investments in regional startups. “Today’s announcement means we can deliver on our priorities at a faster pace than we could do alone; harnessing Visa’s global reach to enable us to continue to bring the very best products and services to customers,” said Brett Macgrath, Chipper Cash’s Chief Product Officer. Visa said it is “thrilled” to double down on its Chipper Cash partnership. “This deepens our support in the growing demand for digital financial services in Africa and driving meaningful impact across the continent,” said Meagan Rabe, Visa’s Senior Director of Fintechs in Sub-Saharan Africa. “We look forward to continuing our work with Chipper Cash to redefine and expand the boundaries of financial accessibility and convenience.” The latest announcement comes just two months after Chipper announced the launch of Chipper ID, the AI-driven verification and onboarding tool built specifically for the African continent. The company is now betting that its strategic partnership with Visa will help it scale its card business and verification services within Africa. Chipper Cash said it serves over five million customers across Africa and the US. Chipper Cash has had a rough last couple of months as it consolidated its resources during a harsh funding winter. Between November 2022 and March this year, two of the startup’s most prominent investors — failed crypto company FTX, and Silicon Valley Bank — collapsed. In June, TechCabal reported that Chipper Cash laid off at least ten staff members in the company’s third round of layoffs over the previous year. Per our sources, those affected included the vice president of marketing, Alicia Levin, the global chief operating officer, and Leon Kiptum, the country director for Kenya. Now the company is looking to stay on a growth path in a sharky macroeconomic environment.
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The leading African tech moves from October 2023
1. Funding: Energy startups continue to lead funding In October 2023, 27 African startups secured $144.3 million in funding through 27 fully disclosed investment rounds. This marks a 23.6% rise compared to the $116.7 million raised in September 2023. It’s, however, a 22.6% decrease from October 2022’s 186.4 million. The three sectors with the highest funding are energy with $86.3 million in raises, fintech with $29 million, and healthtech with a modest $8.6 million. Image source: Timi Odueso/TechCabal In terms of sector performance, various sectors—most notably fintech—within the ecosystem have observed a decline in funding when compared to the levels from the previous year. Nonetheless, an intriguing trend surfaces: the energy sector has consistently secured the lion’s share of funding since June 2023, constituting a substantial 43.7% of the total capital raised between June 2023 and October 2023. Image source: Timi Odueso/TechCabal In October 2023, East African startups dominated the fundraising landscape, securing an impressive $79.1 million in investments. Southern African startups claimed the second spot with $36.8 million in capital raised, while West and North African counterparts followed closely, securing $18.9 million and $9.5 million, respectively. Image source: Timi Odueso/TechCabal The top five disclosed deals of the month are: Kenyan startup M-Kopa’s $65 million debt round from IFC. South African fintech Stitch’s $25 million Series A extension. Nigerian cleantech WATT’s $13 million raise. Kenyan agritech One Acre Fund’s $7.5 million raise. Kenyan healthtech Maisha Meds $5 million raise. *Note: This data is inclusive only of funding deals announced in October 2023. Raises are often announced later than when the deals are actually made. This data also excludes estimated grants from accelerators. 2. Startups: Patricia announces plans to kick off repayments In October, crypto startup Patricia announced plans for the repayment of customer funds. The startup, which suffered a $2 million hack in 2022, first offered users with assets stuck on the platform the chance to convert their funds into equity. Patricia also announced that it would kick off repayment of customer funds in November. The startup had initially engaged DLM Trust, an SEC-licensed trust company, to handle the repayment, but DLM Trust pulled out after disagreements between the two parties. 3. Layoffs: Dash and WhereIsMyTransport shut down, and Majorel lays off 200 employees Last month, Ghanaian fintech Dash announced its shutdown. Despite raising $86.1 million over five years, the company had to contend with mismanagement and financial misreporting, issues which the board of directors suspended CEO Prince Boakye Boampong for. Dash’s shutdown will see to the layoff of its 70+ employees. South African startup Where Is My Transport also announced its shutdown in October after failing to raise new funding. The startup, which raised over $140 million since 2016, will lay off its 140 employees as it winds down. Meanwhile, Majorel revealed that it would lay off 200 employees from its Kenyan subsidiary. Sources say the layoffs are due to the court case the content moderation firm is embroiled in with Meta and Sama. 4. M&As: Safaricom fully acquires M-Pesa Holdings, Writesea acquires CoverAI October saw Safaricom complete its acquisition of M-Pesa Holding Company Limited from Vodafone BV. While the acquisition—which cost Safaricom just $1—was initially announced in May, the telecom had to get regulatory approvals before acquiring the corporate trustee company that holds all M-Pesa deposits. Three-month-old Nigerian AI startup CoverAI was also acquired in October. Writesea, a US-based company which provides services to other companies to help them create and manage their online recruitment platforms, acquired the startup in a five-figure deal some estimate to be $50,000. 5. Telecoms: Airtel Africa and MTN Nigeria record revenue increases Right before the month wrapped up, Airtel Africa released its financial statement for the first nine months of the year. While the company recorded a 19.7% increase in revenue, it reportedly recorded $13 million after tax due to FX issues. MTN’s Nigerian subsidiary also recorded a 21.76% increase in revenue. The telecoms financial statements show that while revenue grew by 21.76% to ₦1.77 trillion ( $2.1 billion) in the first nine months of 2023, profits declined by 45.22% to ₦148 billion ($188 million). MTN Nigeria also received troubling news in October after a tax appeal tribunal ordered the telecoms to pay $72.6 million in back taxes for the years 2007–2017. The telecom, afterwards, revealed that it would be appealing the decision. 6. Economy: Nigeria announces plan to upskill 3 million people in tech In October, Nigeria’s country’s minister of communications, innovation, and digital economy, Bosun Tijani, announced plans to equip 3 million early-to-mid-career Nigerians with tech skills by 2027 as part of the ministry’s strategic blueprint. At TechCabal’s Moonshot Conference Tijani explained that 3MTT—short for the “3 Million Technical Talent (3MTT) Programme”—would be deployed with a 1–10–100% model that will 1% of the 3 million intended participants trained by February 2024. 7. Big Tech: Amazon confirms South Africa launch for 2024 E-commerce giant Amazon confirmed the launch of its online shopping service in South Africa in 2024. South Africa will become the second African country, after Egypt, to host a locally-dedicated Amazon shopping website. The company’s launch in South Africa should have happened earlier, but it experienced a pushback after a Western Cape High Court ordered a stop to the construction of its African headquarters. While the decision has now been overturned, Amazon still has local retailing laws in South Africa to adhere to before it can kick off business in South Africa. 8. Companies: Eskom records R24 billion in losses for 2022/23 FY Last month, South African power-generating company Eskom released its financial report for the year 2022/23. The company suffered losses up to R24 billion ($1.2 billion), twice the R11 billion ($588 million) in losses it recorded for the 2021/22 financial year. The company blames its decreasing generating capacity as well as increased municipal debt for the loss. CEO Calib Cassim, however, says that this is the last of such losses for Eskom. 9. Economy: South African Airways makes a comeback South Africa’s national carrier made a
Read MoreZambia announces plans to open smartphone factory in June 2024
Zambia has announced plans to open a smartphone factory in the country by June 2024 to reduce the prices of the devices for citizens. Zambia’s minister of technology and science, Felix Mutati, has announced the country’s plans to open a smartphone factory by June 2024. Mutati made the announcement at the ongoing Africa Fintech Summit in Lusaka, Zambia. “Building the gadgets in the country will enable us to reduce the cost of smartphones in the country and hence foster inclusivity when it comes to connectivity,” Mutati stated. Mutati further added that access to smartphones would boost the reach of fintech startups in the country as the devices are enablers of access to fintech services provided by the startups. In another effort to boost connectivity, Mutati also stated that the government plans to construct over 100 community digital centers nationwide. According to the 2021 World Bank FinDex report, 24% of adult Zambians aged 15 years and above owned a financial institution account. Of these, only 10% used mobile money or an online service to make payments and purchases. The purpose of the smartphone factory, per Mutati’s explanation, would be to boost these connectivity numbers and hence access to fintech services like mobile money. In October 2022, the government also announced that it would zero-rate imports of telecoms equipment, including smartphones, in a bid to encourage investment into the country’s ICT sector, which the government views as essential to job creation and economic development in the market. Data by ZambiaPrice states that smartphones in the country cost an average of between 2,500 kwacha (~$114) to 4,000 kwacha (~$182). However, data from the JCTR Home Survey report states that the average salary in Zambia is between 1,000 kwacha (~$45) and 3,000 kwacha (~$137), showing the discrepancy between income and affordability of devices for even employed Zambians.
Read MoreExclusive: Crowdyvest proposes converting ₦7.7 billion it owes customers to equity
Crowdyvest Limited, a Nigerian crowdfunding platform that allowed retail investors to fund a range of agritech businesses, owes 3,700 crowdfunding investors ₦7.7 billion, according to an internal document seen by TechCabal. The company defaulted on its payment obligations to customers in 2021, and in that time, it has never disclosed its total debt outlay. “We are concurrently exploring opportunities for our members to get quarterly payout as we recover funds from project partners that are owing us,” Temitope Omotolani, Crowdyvest CEO, told TechCabal in an email.” The company expects to recover around ₦2 billion from some of the businesses it funded within the next two years. Per the same internal document, those monies will be disbursed to investors by a registered asset manager. A significant part of debt—around ₦5.7 billion—will be converted to equity in Crowdyvest Management Limited, the company said. Customers who are owed will own 35% of the company. Converting the major part of the debt to company shares is a similar approach to Patricia, the crypto company that lost $2 million in customer assets. The company is also launching “Phoenix Fund,” a new investment vehicle to raise funds. Key Takeaways Crowdyvest owes 3,700 users N7.7 billion since 2021 The company is proposing converting some of that debt to equity The company is also raising a new fund How did Crowdyvest get here? Launched in 2019, Crowdyvest was a member of the EMFATO group alongside two other companies: Farmcrowdy and Treepz. It helped Farmcrowdy, an agritech business, raise money from retail investors who were promised up to 20% returns across several projects. Like many other agritech projects, Farmcrowdy cited the COVID-19 pandemic as a reason many partners could not repay those investments. When Crowdyvest left the EMFATO Group in March 2021, it took on the debts of Farmcrowdy. Since 2021, it has repeatedly assured investors it remains committed to repaying all debts; the company said it paid N18 billion between 2020 and 2023. “As a business, we’re dealing with the hard truths of what is lost, what is still redeemable and what can be done to completely solve this,” explained Omotolani. “We have come to the realization that our commitment to meeting our obligations to all stakeholders can only be legitimately fulfilled if we remain a viable and continually improving entity,” she added.
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Exclusive: Payments giant Interswitch loses ₦30 billion to chargeback fraud, launches recovery process
Interswitch, the African payments and infrastructure giant, has lost as much as ₦30 billion after a system glitch allowed some merchants to fraudulently file and receive chargebacks, according to court documents seen by TechCabal and three people with direct knowledge of the situation. The company is now attempting to recover the funds through legal action, and it has reported the fraud to the Economic and Financial Crimes Commission (EFCC), Nigeria’s anti-money laundering agency. So far, Interswitch has recovered a little over ₦10 billion, according to one person with knowledge of the matter. Interswitch declined to comment for this story. Brett King, John Chaplin, Mitchell Elegbe, GMD Interswitch and Akeem Lawal, DCEO, Interswitch The court documents showed that Interswitch filed a motion at the courts on the suspected bank accounts. The payments giant has also requested that 54 banks place restrictions on hundreds of suspected bank accounts until the investigation and recovery process is complete, said a lawyer at a top Nigerian law firm with knowledge of the ongoing case. A clash between Nigerian banks and neobanks highlights financial industry’s complicated fraud problems The chargeback fraud dates back several years, two sources with knowledge of the situation told TechCabal, but they declined to share a specific timeline. The current incident, however, is directly linked to a few former and current Interswitch employees who likely exploited vulnerabilities in the company’s system, the sources said. At least one person has been arrested in connection with the incident, a source also said. Nigeria’s financial services industry has seen an increase in incidents of fraud in the last four years. Nigerian financial institutions have reported ₦159 billion ($201.5 million) lost to fraud cases since 2020, according to the Financial Institutions Training Centre (FITC).
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👨🏿🚀TechCabal Daily – MFS Africa rebrands to Onafriq
In partnership with Share this newsletter: Lire en Français اقرأ هذا باللغة العربية Happy pre-Friday Elon Musk wants to turn Twitter—or X—into a dating app, and a payments platform—the “everything” site. The CEO is following in MTN’s footsteps and wants to be everywhere you go. In what is sure to be a painful but fun journey for employees, the CEO, last week, told Twitter employees that X could replace banks within a year. It’s been one year since the Musk takeover and the platform is now worth half what Musk paid for it. The billionaire’s plan for profitability hasn’t taken off yet, but Musk is playing so many cards, one is sure to be an ace—or a joker. In today’s edition Swvl turns the tables MFS Africa rebrands to Onafriq AFEX raises $26.5 million SA’s WeWork distances itself from WeWork’s bankruptcy plans New domains are coming to South Africa The World Wide Web3 Opportunities Companies Swvl releases 2022 financial statement GIF source: Tenor Swvl is driving stealthily. The Dubai-based mobility company quietly filed its annual report for 2022 on October 31 after previously missing a NASDAQ deadline for submissions. Dig in: Swvl’s bus-hailing services for business customers grew rapidly in 2022, generating $37.9 million in revenue, a 132% increase from the previous year. This growth outpaced that of the company’s mass transit business, which brought in $13.6 million. Swvl booked a total of 45.7 million rides across both businesses in 2022, up from 25.9 million the year before. The company processed $56.5 million worth of ride tickets in 2022, compared to $38.4 million in 2021. The biggest takeaway from Swvl’s 2022 annual report is the company’s financial health. In 2021, Swvl reported total liabilities of $149 million, including $118 million in short-term convertible debt. By the end of 2022, it had successfully converted much of its debt obligations into equity, shaving liabilities worth more than $124 million. Swvl also raised $20 million in equity financing after it successfully sold 12.1 million shares at $1.65 per share in August 2022. The report represents a major turnaround for Swvl, which has endured a turbulent life as a publicly traded company. Lights out: While Swvl is yet to become profitable, its 2022 financials paint a picture of improved financial health. The changes in its financial results also alleviate much of its business pressures, giving it the breathing space it needs to become a stable and profitable enterprise. Access payments with Moniepoint Moniepoint has made it simple for your business to access payments while providing access to credit and other business tools. Open an account today here. Fintech MFS Africa rebrands to Onafriq Image source: Onafriq MFS Africa is having a makeover. The African fintech platform has rebranded to Onafriq. Why? Per CEO Dare Okoujou, the facelift was due to trademark challenges in the US. Aside from the challenges with the trademark, the Onafriq CEO says the group wanted a name that reflects its true ambition as the business had expanded beyond just mobile financial services and had become an omni-channel platform across Africa and beyond. Last year, Onafriq acquired US-based fintech company Global Technology Partners (GTP) for $34 million in cash and shares. Onafriq? The name draws inspiration from “Ona”, the Yoruba word for pathways and “Afrique,” the French word for Africa. With a hidden reference to IQ, the name also alludes to the startup’s goal of becoming a leader in intelligent African fintech. Zoom out: As MFS Africa rebrands as Onafriq, the fintech continues its journey to connect global and regional businesses, mobile network operators, money transfer operators, banks, fintech firms, global development organisations, and online and offline merchants. In November 2022, Onafriq obtained three licenses from the Bank of Uganda (BoU) one year after it acquired Beyonic, a Ugandan-based digital payments services provider for enterprises operating in Ghana, Tanzania, Kenya, and Rwanda. The evolution of agency banking in Africa In this longform Decode Fintech piece, Paystack explores agent networks in Africa, how they converge with SMEs, and what the future of agency banking means for how money moves across the continent. Read the blogpost. Funding AFEX raises $26.5 million L-R: Chris Chijiutomi, Managing Director and Head of Africa BII , Nick O’Donohoe; Chief Executive Officer – British International Investment, Ayodeji Balogun; Chief Executive Officer – AFEX, Benson Adenuga; Head of Office and Coverage Director, Nigeria and Mobolaji Adeoye; Chairman AFEX Nigeria-based agritech AFEX has secured $26.5 million in funding. Yesterday, the British International Investment (BII) signed a new partnership with the agritech that will see the investor commit $26.5 million to the company’s activities. Founded in 2014, AFEX presently trades over nine commodities across Nigeria, Kenya and Uganda. The company reportedly has 200 warehouses across these locations, and claims to process over $300 million worth of crops on its platform per annum. Moving forward: AFEX has BII’s investment for the development of 20 modern warehouses strategically located in Nigeria, Kenya, and Uganda. The new warehouses are expected to offer an additional storage capacity of 230,000 metric tons for AFEX. This expanded storage infrastructure will make it possible for approximately 200,000 more farmers to access cost-effective storage solutions and optimise their crop sales. The potential impact is also noteworthy, with the possibility of boosting farmer incomes by over 200%. Zoom out: So far, AFEX is hitting its goals. The company also doubled down on its plans for an African expansion with CEO Ayodeji Balogun stating that the company has plans to expand to seven more countries including Ghana, Côte d’Ivoire and Ethiopia by 2024. To meet this goal, Balogun, in May, announced the company’s plans to raise $65 million which would help it boost its storage capacity to 1 million tons. Companies SA’s WeWork distances itself from WeWork’s bankruptcy plans GIF source: GIPHY The South African franchise of WeWork has announced that its operations are independent of WeWork Global’s bankruptcy filing in the US. What’s happening? On Wednesday evening, Reuters reported that global coworking space provider WeWork Global was planning to
Read MoreWeWork South Africa distances itself from WeWork Global’s bankruptcy
WeWork South Africa is distancing itself from WeWork Global’s bankruptcy filing, stating to TechCabal that it is in no way affiliated with the company. WeWork South Africa has stated that it won’t be affected by WeWork Global’s Chapter 11 bankruptcy filing in the US. In March, WeWork entered a franchise “partnership” with SiSebenza, a pan-African real estate investor, which gave SiSebenza the exclusive right to operate WeWork’s existing locations in South Africa. The deal also granted SiSebenza exclusive rights to grow and operate the WeWork franchise in Ghana, Kenya, Mauritius and Nigeria. Although the initial agreement was referred to by both parties as a partnership, WeWork SA has stated in a communication to TechCabal that it is in no way affiliated with WeWork Global. It also added that it has 100% ownership of WeWork SA. WeWork expanding its Africa footprint through partnership with SiSebenza “We want to emphasise that WeWork South Africa operates as an entirely separate entity, with full ownership by SiSebenza, and no affiliation with WeWork Global. This means that the recent global actions undertaken by WeWork Global will have no impact on our local operations in South Africa,” the company said in a statement to TechCabal. WeWork opened its first South Africa location in 2019 at WeWork The Link in Rosebank, Johannesburg, followed by WeWork 80 Strand in Cape Town and WeWork 155 West Street in Sandton, Johannesburg. It appears most franchisees of WeWork Global are distancing themselves from the troubled company. WeWork India also assumed the same stance as WeWork South Africa about the bankruptcy.
Read MoreUS-listed Swvl quietly releases long-delayed 2022 financial statement as it engineers its way to financial safety
Swvl, the Dubai-based mobility company, quietly filed its annual report for 2022 on Oct. 31 after previously missing a NASDAQ deadline for submissions for publicly listed companies on the stock exchange. The long-anticipated report provides extensive details on the health of the Cairo-born company and its financial performance as it chases profitability and sustainability with its novel bus-hailing model in Africa and the Middle East. In 2022, the mobility company doubled its revenue to $51.5 million, up from $25.6 million in the previous year. Swvl posted its first group gross profit, $2.75 million, largely because its revenue grew faster than its basic cost of operating its fleet of buses. The company’s cost of sales rose 55% to $48.7 million compared to the previous year. The report represents a major turnaround for Swvl, which has endured a turbulent life as a publicly traded company. The company made its stock market debut in March 2022 when it merged with Queen’s Gambit Growth Capital, a special purpose acquisition company (SPAC), trading at $10 per share at a $1.5 billion valuation. But its stock collapsed afterwards, trading below $1 for an extended period as NASDAQ threatened to delist the company if its share price didn’t exit penny stock levels. Swvl completed a reverse stock split, which effectively consolidated its shares, converting 25 units into 1. That action offered some relief, but its share price has never returned to its SPAC listing amount. By late 2022, Swvl began making major changes to its business, including layoffs of 450 employees and shutting down operations in several countries, which radically impacted its financial information compared to details it reported by June 2022. Between mid-2021 and April 2022, the company announced at least four acquisitions as it expanded to new markets in Europe and Latin America. It acquired Shotl, a mass transit platform that operates on three continents; it also bought a controlling stake in Viapool which served Argentina and Chile; in June 2022, Swvl took over German-based Blitz B22-203 GmbH; and in April 2022, it took a controlling stake in Volt Lines, a Turkish company. And in August 2022, it acquired Latin American company Urbvan in an all-share deal. Following, these acquisitions, by mid-2022, Swvl posted half-year revenue of $40.7 million across 20 countries, nearly three times its income for the same period in 2021. But by the end of 2022, Swvl had successfully reversed most of its acquisitions and shut down Blitz B22-203 GmbH. And in September, it sold Urbvan for $12 million. Unwinding these deals significantly changed the company’s situation, causing it to reformulate its financial statements and change previous business projections. The reversals also helped it reduce liability exposure related to some of these acquisitions, including payments to their suppliers. As a company, Swvl reported strong growth thanks to its fast-growing bus-hailing services to business customers. In 2022, it raked in $37.9 million from business customers, a 132% jump from the previous year, compared to its mass transit services which reported $13.6 million. Overall, Swvl booked 45.7 million rides across both businesses last year, up from 25.9 million in 2021. The company claimed it processed $56.5 million worth of ride tickets in 2022, compared to $38.4 million the year before. Swvl said its buses were full 96% of the time last year, with an average ticket per seat of $1.23. Despite its rising revenue and financial changes from reversing previous acquisitions, Swvl, whose CEO, Mostafa Kandil, earns a basic salary of $650,000 a year, remains a loss-making enterprise. Swvl is yet to turn a profit and in 2022 it posted operating losses of $82.4 million, a 6.5% decline compared to the previous year. The company attributed much of its operating expenses to salaries and fees related to one-time activities, namely its acquisition reversals and fees from its SPAC listing in March last year. The biggest takeaway from Swvl’s 2022 annual report is the company’s financial health. Before making drastic changes to its business last year, Swvl reported total liabilities of $149 million in 2021, including $118 million in short-term convertible debt. By the end of 2022, it had successfully converted much of its debt obligations into equity, shaving liabilities worth more than $124 million. Swvl also raked in $20 million in equity financing after it successfully sold 12.1 million shares at $1.65 per share in August 2022. These changes have significantly improved Swvl’s financial situation and it alleviates much of its business pressures until it becomes a stable and profitable enterprise. However, high-profile exits including the replacement of its chief financial officer and resignations of two board members over the last few months might raise some eyebrows as Swvl’s CEO stabilizes the company’s operations.
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