Uber buys Middle-East rival Careem
Uber has acquired Careem, the biggest ridehailing company in the Middle East.
Uber acquired Careem for $3.1 billion and will make it a wholly-owned subsidiary of Uber, operating as an independent company under the Careem brand and still led by the Careem founders.
The transaction itself is expected to close in the first quarter of 2020. It will be the largest-ever technology industry transaction in the greater Middle Eastern region. The payment will happen partly in cash and partly in securities that will convert into Uber shares when the company goes public.
The Dubai-based ridehailing company Careem was founded in 2012 and has become the regional market leader. They count 30 million users across 90 cities in the Middle East, North Africa and Pakistan. The company was valued more than $2 billion in a funding round in October.
The acquisition will not only increase Uber’s market share, but it could also increase Uber’s credibility on the market. The ridehailing company is preparing an Initial Public Offering (IPO), which is expected to happen later this year.
Other ridehailing giant Lyft already filed its IPO last week, to become the first ridehailing company on the stock market.
Greater Middle East, greater market
With the acquisition or partnership, both companies want to expand the underpenetrated mobility opportunities in the Middle East. Uber will acquire all of Careem’s mobility, delivery, and payment businesses across the entire greater Middle East region, from Morocco to Pakistan, including Egypt, Jordan, Pakistan, Saudi Arabia and the United Arab Emirates.
Therefore, the acquisition of Careem might help cut Uber’s losses and give the company a territorial expansion it didn't get when it failed to penetrate the Chinese market earlier, and while competing with Indian ridehailing company Ola.