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First African Startup to Go Public Via SPAC is Now Downsizing

In the first week of April this year, the buzz around Swvl was about its entry into Africa’s group of billion-dollar companies. It achieved this by going public on Nasdaq via a Special Purpose Acquisition Vehicle (SPAC) with Queen’s Gambit Growth Capital, a women-led blank-check company, as its sponsor. Two months later, the bus-hailing company which started in Egypt is laying off 400 people—about 32% of its workforce—in a bid to become cash flow profitable by 2023. In a letter to employees, Swvl’s CEO Mostafa Kandil blamed the layoffs on a “global crisis with unforeseen consequences.” Startups in the transportation industry have laid more employees off than any other sector since covid-19 began, according to which tracks the data. Swvl’s move is the first major sign of market corrections affecting African tech, and points to automation’s effect on the future of work in the continent. From its SPAC valuation of $1.5 billion, Swvl is now worth between $500 million and $600 million. Beyond the layoffs, Kandil said the company’s top management staff will take lower salaries, freeze travel, and reduce current office spaces, all in a bid for profitability.