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    From Startup CFO to Overnight Millionaire: How SWVL Employee Stock Options Minted a New African Millionaire

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    Three years ago, Youssef Salem joined SWVL, a rising Egyptian transportation startup, as their Chief Financial Officer (CFO). He has since moved on to lead the finances of a major drilling company. However, his foresight in joining SWVL has paid off handsomely. Stock options he received as part of his compensation package have soared in value, making him a millionaire. In this article, we explore the details of this lucrative stock option package and how it fueled his remarkable financial rise.

    The ESO Grant and Calculated Wager in 2021

    Upon joining SWVL in September 2021, Salem’s employment agreement included a grant of 43,665 Restricted Stock Units (RSUs). These RSUs functioned as a promise to receive company shares (Class A Ordinary Shares in this case) at a predetermined price ($10 per share) in the future, subject to vesting conditions. This price is crucial — it represents a bet on the company’s future success. If the share price increases significantly after the vesting period, the employee can exercise the option to purchase shares at the lower, locked-in price and then sell them on the open market at the higher price, generating a substantial profit.

    The vesting schedule for these initial RSUs spread over four years, with a quarter (25%) vesting on the first anniversary and the remaining 75% divided into equal installments vesting every quarter thereafter. This structure incentivized Salem to remain with SWVL for an extended period, aligning his fortunes with the company’s long-term performance.

    In January 2023, SWVL undertook a one-for-25 reverse stock split. This financial move essentially consolidated existing shares into fewer shares with a higher per-share price. While the total value of Salem’s holdings remained unchanged, the number of shares he owned decreased. However, it’s important to note that the reverse stock split doesn’t directly impact the value of the ESOs themselves. The true impact depends on the stock price movement post-split.

    Later in December 2023, SWVL further bolstered Salem’s stake in the company by granting him an additional 557,692 RSUs. These additional options fully vested by March 2024, giving Salem the right to purchase even more shares at the predetermined price.

    In February 2024, Salem’s career at SWVL reached new heights as he was appointed to the company’s board of directors, after leaving the company to become the CFO of ADNOC Drilling, the largest national drilling company in the Middle East by rig fleet size. By this time, his ownership had grown substantially. He beneficially owned 558,840 shares of Class A Ordinary Shares, all of which were acquired through his roles as an officer and director. His shareholding is currently 6.2% of all Class A Ordinary Shares. This substantial ownership stake positioned him to reap significant financial rewards as the company’s valuation continues to rise.

    The Lucrative Payoff

    The pivotal moment for ex-CFO Salem arrived in 2021 when SWVL opted to go public through a merger with a SPAC (special purpose acquisition company) named Queen’s Gambit Growth Capital. This merger valued SWVL at a remarkable $1.5 billion, a significant increase from its pre-public valuation.

    With SWVL now a publicly traded company, Salem’s ESOs transformed from illiquid holdings to tradable assets. The significant rise and fall in SWVL’s share price due to the public listing somewhat made these ESOs valuable. By exercising his options and selling the acquired shares at the market price, Salem could secure a substantial profit. 

    A Trend of Departures and Startup Success

    Salem’s story isn’t unique. Several former SWVL employees have left to found successful startups, creating a new generation of entrepreneurs in the Middle East.

    • Ahmed Nouh: Previously with SWVL’s shipping and logistics department, Nouh co-founded Capiter, a B2B e-commerce platform that raised $33 million. Capiter has, however, since shut down. 
    • Ahmed Sabbah: SWVL’s co-founder and former CTO, Sabbah launched Telda, Egypt’s first digital bank, which secured funding from Sequoia Capital.
    • Mohamed Khaled: Most recently involved in SWVL’s SPAC merger as Director of Finance, Khaled founded Hotdesk, a Dubai-based PropTech startup that recently secured $1 million in seed funding. Interestingly, Salem himself participated in this round.
    Charles Rapulu Udoh isn’t your typical lawyer. Based in Lagos, he’s carved a niche at the forefront of Africa’s booming tech scene. With years of experience, Udoh has become a go-to expert for multi-million dollar deals in venture capital, private equity, and intellectual property across a vast landscape — from Delaware and New York to Singapore and South Africa. But his expertise extends beyond just the legalese. Udoh is also a corporate governance, data privacy, and tax whiz. An award-winning writer and researcher, he’s passionate about chronicling Africa’s startup story, cementing his position as a true pioneer in the field.

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