Swvl’s $100 million acquisition of Smart Bus startup Zeelo failed to materialize amid slumping tech stocks TechCrunch

All is not well with the proposed acquisition of UK start-up bus platform Zeelo by the Swvl Public Transport Group. Back in April, we mention How is it possible to get $100 million redemption on the tokens, and in fact, both companies confirm that is, though not the price.

Swvl, an Egyptian-born startup that provides shared transportation for intercity and domestic trips, has previously listed shares (NASDAQ: SWVL) through SPAC and has agreed to buy back Zeelo, in addition to the recent acquisitions of Viapool and Shotl. such as the announcement of the acquisition of Volt Lines and door2door.

As news of the buyback dips, Swvl is trading at $9 to $10 a share. However, today it is trading at close to $1 a share. Make the difference…

So today Zeelo was leave news that the acquisition has now been terminated, citing overall market conditions and the apparent drop in tech stocks.

The April 28 acquisition is expected to close on May 24, and Zeelo said all pre-completion obligations have been met, but “following the volatility of financial markets, Swvl and Zeelo mutually agree to terminate the planned transaction.”

Equally, in filing with SEC, Swvl Holdings Corp said it has agreed to terminate their previously announced transaction under which Swvl will acquire Zeelo. Swvl previously sponsored a $5 million convertible note to Zeelo, which it would later keep.

However, the move sounds like a smart move for Zeelo, which claims to be seeing continued growth in its business in the UK, South Africa and the US, providing private trips for commuters and students in corporate and educational spaces.

Zeelo has raised $19.6 million to date from investors like ETF Partners, InMotion Ventures, and angels.

In an interview with co-founder and CEO Sam Ryan, I asked if terminating the acquisition would be a disaster for Zeelo.

“No, I don’t think it’s a disaster,” he said. “I think market conditions have changed. We are still in a great position, the business is growing really fast. And you know, now we’re protected from what’s going on in the public markets. “

He said both companies agreed to terminate the transaction due to the collapse of the technology market: “The agreement that was agreed upon is no longer meaningful to the parties… not only in terms of transactions but also in terms of transactions. growth opportunity… We won’t be able to do that anymore. “

He added: “We are in a great place now. We are profitable in the UK, we are growing 1.5x this year. We make 150,000 trips per month by EV. This is growing very rapidly, as there is a huge opportunity in the US market. I think being somewhat shielded from the public market is not a bad thing. Obviously, any process like this involves a lot of ups and downs, and it’s a real roller coaster ride. But everyone is very, very excited about what’s next. “

Acknowledging the tech downturn, he added: “I think the world has changed incredibly rapidly in the past few months, and the sentiment around early-stage tech companies among the public has changed dramatically. tell. I’m not sure any of us could have foreseen what would happen in the past few months or how serious it would be.”

At the same time, Zeelo also announced that it had cut its contract with electric vehicle fleet and network infrastructure provider, Zenobe, to allow the former company to run tram rides, with the location therefore closed. contribute to their netless goal. (Zeelo says its journeys have been 100% carbon-neutral through a partnership with Climate Partners to support environmental regeneration programs in Bulgaria and Uganda.)

Zenobe says it currently serves a 25% share of the UK bus market, providing charging infrastructure, battery replacement, large-scale battery storage and second-generation refurbished batteries. Zeelo has run electric buses on several routes with its bus operator partners.

James Basden, co-founder of Zenobe, commented: “We believe accessibility is an important barrier to transition to electrification and that is why we have developed the software, the infrastructure tiers and funding models with our partners like Zeelo to build sustainability right into the transportation business model. “

Zeelo’s transportation management software system includes a SaaS platform, consumer applications that pick workers or students from where they come from. It was founded in 2016 by Sam Ryan, Barney Williams, and Daniel Ruiz and closed its Series A in 2018. To date, it has raised more than $30 million from ETF Partners, InMotion Ventures, and Dynamo, among others. the others. The co-founders previously sold pioneering ride-sharing app JumpIn to Addison Lee in 2014.