Swvl Backtracks on Its Acquisition of Turkey’s Volt Lines

Swvl, the Cairo-born and Dubai-headquartered mass transit solution, is unwinding its acquisition of Turkey-based mobility startup Volt Lines, which it completed last year in April as part of its international expansion strategy. The $40 million deal was effectively canceled earlier this month.

Suffering from low liquidity and falling stock prices, the startup is reportedly unable to meet its financial obligations to the acquired startup.

Founded in 2018 by Ali Halabi, Volt Lines provides transportation services in Turkey as an alternative to ride-hailing and public transport to individual customers and corporate clients.

The takeover at the time was part of an acquisition spree by Swvl, which saw the startup acquire Spanish mobility platform Shotl, German’s public transport company Door2Door, and Argentina’s mass transport solution Viapool.

However, soon after Swvl’s wave of acquisitions, the startup terminated its earlier merger with UK startup Zeelo due to turmoil in financial markets.

According to Swvl, Volt Lines shareholders are under no obligation to reconvert or cancel Swvl shares already received from the previous acquisition agreement. During the acquisition, Volt Lines managed to more than double its revenue, achieve market profitability, and significantly reduce liabilities from its balance sheet. It also plans to start expanding overseas in 2023.

“During our time with Swvl we had the chance to focus on the fundamentals which helped transform the Volt Lines business and thus more than double its value since the acquisition,” Halabi tells StartupScene. “Swvl and Volt Lines benefited a lot from each other, however the macro-economic climate made it very difficult for the deal to conclude. We’re very happy with taking back control of a stronger Volt Lines and we hope to cross paths again with the Swvl team, they were great to work with.”

According to a previous statement made by Youssef Salem, Swvl financial director, the startup is aiming to reap profits in 2023. “When we went public again in July 2021, we had estimated to start making profits in 2024, but in response to market conditions, we had to increase profitability by one year to 2023,” he said.

Although the acquisition was valued at $40 million, Swvl is only obligated to pay $5 million to Volt Lines.