SWVL, a “Transportation-as-a-Service” Start-up Appears to Be a Few Breaths Away from Bankruptcy

We are short SWVL Holdings Corp (SWVL) and see 100% near-term downside for this Dubai
based bus-sharing app. SWVL’s dire financial condition is easy enough to determine by looking
at its dismal financials, but our research into the company, including on-the-ground due diligence
in Egypt, indicates that SWVL’s operations are grinding to a halt as they run out of money. They
also apparently don’t even have enough money to maintain their website as many of the pages
are defunct, which is particularly embarrassing considering they try to pass themselves off as a
technology company.

92% of SWVL’s revenue originates in Egypt, so we hired investigators to assess their
operations and found they were nearly as dysfunctional as the company’s website. One
investigator attempted to sign up as a driver, yet he never received a response from the company.
Investigators we hired to act as customers had trouble even booking rides as very few routes in
and around the city of Cairo were available, the primary city SWVL appears to operate in. This
problem appears to be widespread as the vast majority of recent reviews are negative due to a
lack of available rides. One of our investigators even remarked that he hadn’t “seen anyone use
it personally.”

SWVL’s Financials Indicate the Firm is Nearly Out of Money

• SWVL’s shares have surged 223% YTD due to posting positive net income in FY 2023.
This was due to a one-off $18.8 million contribution in the line item “other income.”
Prior to this adjustment, SWVL’s market cap had plunged to a mere $5 million before
rallying after its one-time boost from “other income.” The entirety of SWVL’s other
income is attributed to SWVL settling their debt with creditors for 15 cents on the dollar.
In our view, given SWVL’s financial condition, its creditors were wise to settle for
almost nothing rather than getting nothing in bankruptcy.

• SWVL appears to be nearly out of money. On December 31, 2023, SWVL had just $2.9
million on its balance sheet, after burning $9.1 million in operating cash flows in 2023. The company registered a $100 million shelf offering at the beginning of June. We
believe SWVL will struggle to sell shares without rapidly diluting its stock price into
oblivion due to limited trading volume.

• SWVL initially went public in March 2022 at a $1.5 billion valuation, projecting they
would hit ~$400 million in revenue by 2023. Instead, SWVL earned just $22.9 million
in continuing operations revenue for their 2023 fiscal year.

• SWVL even promoted a 2025 revenue target of $1 billion, claiming its TaaS or
“Transportation-as-a-Service” platform (hasn’t transportation always been a service?)
would earn ~$500 million by then.

• This past year, SWVL was forced to sell off their European and LATAM businesses in a
move management claimed was to help focus on their U.S. expansion. However, our on-
the-ground investigation in Egypt reveals that SWVL’s footprint is almost entirely
limited to the capital city of Cairo. In 2023, SWVL received an $8.4 million cash infusion
from the disposal of subsidiaries which helped it stay afloat. However, SWVL already
appears to have burned through these funds.

• In addition to SWVL’s financial woes, Egypt devalued its currency by nearly 40% in
March 2024. The impact of this devaluation is somewhat offset by the fact that SWVL
has very little liquidity left.