The idea of UK startup bus platform Zeelo being acquired by mass transit group Swvl isn’t all good. In April, we covered how a $100 million purchase was on the cards, and indeed, both companies confirmed that, although not the price.
Swivel, the Egyptian-based startup that offers shared transportation services for downtown and inner-city trips, previously went public (NASDAQ: SWVL ) via SPAC, and has agreed to acquire Zeelo, following its recently announced acquisitions of Viapool and Shuttle as well as Vault Lines and Door2door.
When news of the acquisition dropped, Swvl was trading between $9 and $10 per share. Today, however, it is trading at just $1 a share. Know the difference…
So today, Zello released news that the acquisition is now off, citing overall market conditions and the apparent decline in tech stocks.
The April 28 acquisition was expected to close on May 24, and Zelo said all pre-closing obligations had been met, but “following financial market volatility, Swivel and Zelo have agreed to terminate the proposed transaction.”
Similarly, in an SEC filing, Swvl Holdings Corp. said it has agreed to terminate a previously disclosed transaction whereby Swvl will acquire Zeelo. Swvl previously issued a $5 million convertible promissory note to Zelo, which the latter now holds.
However, the move will see continued growth in its business in the UK, South Africa and the US for Jump, which offers private rides to commuters and students in the corporate and education space.
Zeelo has raised $19.6 million to date from investors such as ETF Partners, InMotion Ventures and Angels.
In an interview with co-founder and CEO Sam Ryan, I asked if the buyout was a disaster for Zelo.
“No, I don’t think it was a disaster,” he said. “I think market conditions have changed. We’re still in a great place, the business is growing really, really fast. And you know, now we’re protected from what’s going on in the public markets.”
Both companies agreed to terminate the transaction due to the technology market downturn: “The agreed upon agreement does not make sense for the parties … not only in terms of the transaction, but in terms of the growth opportunity … we can no longer do either.
He added: “We are in a very good place now. We are profitable in the UK, growing 1.5x again this year. We are doing 150,000 rides per month through EV. This is growing rapidly as there is a huge opportunity in the US market. I think it’s not a bad thing to be isolated from the public market to some extent. Obviously, any such process involves many ups and downs and is a real roller coaster. But everyone is very, very excited about what’s next.
Acknowledging tech’s failure, he said, “I think the world has changed incredibly quickly in the last few months, and the public sentiment toward early-stage tech companies has changed dramatically. I’m not sure any of us could have foreseen what would happen in the last few months or how difficult it would be.
At the same time, news is coming out that Zelo has cut a deal with electric fleet and network infrastructure provider Zenobe to allow the former to travel on electric vehicles, thereby contributing to the Zero goals. (Zelo says the trips are 100% carbon neutral, partnering with Climate Partners to support environmental restoration programs in Bulgaria and Uganda.)
Zenobe currently serves 25% of the UK bus market, providing charging infrastructure, battery replacement, large battery storage and refurbished second-life batteries. Zello, along with its bus operator partners, is working on electric buses on some routes.
James Basden, founder of Zenobe, commented: “We believe access is the key to electrification, which is why we’ve developed the software, infrastructure and financial model to work directly with our partners at Zillow to build sustainability into the business. “Transportation Industry Model”.
Zello’s transportation management software system includes a SaaS platform, consumer applications that select employees or students from their location. In the year 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 over $30 million from EFF Partners, InMotion Ventures and Dynamo, among others. The co-founders previously sold their pioneering ride-sharing app JumpIn to Addison Lee in 2014.