Uber and Careem compete in passenger transport and food delivery across the Middle East, north Africa and south Asia. Uber is buying Middle Eastern Careem in a deal that marks a shift in the US ride-hailing company’s global strategy.
Uber and Careem have reached an agreement for Uber to acquire Careem for $3.1 bn, consisting of $1.7 billion in convertible notes and $1.4 billion in cash. The acquisition of Careem is subject to applicable regulatory approvals. The transaction is expected to close in Q1 2020.
Dubai-based Careem, with 33m registered users and 1.2m drivers across 98 cities, was keen to maintain its brand through the transaction. Careem will be operating as an independent company under the Careem brand and led by Careem founders.
Uber will acquire all of Careem’s mobility, delivery, and payments businesses across the greater Middle East region, ranging from Morocco to Pakistan, with major markets including Egypt, Jordan, Pakistan, Saudi Arabia, and the United Arab Emirates. Upon closing, Careem will become a wholly-owned subsidiary of Uber, preserving its brand.
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Careem co-founder and CEO Mudassir Sheikha will lead the Careem business, which will report to its own board made up of three representatives from Uber and two representatives from Careem. Careem and Uber will operate their respective regional services and independent brands.
According to Uber CEO Dara Khosrowshahi, This is an important moment for Uber as we continue to expand the strength of Uber platform around the world. With a proven ability to develop innovative local solutions, Careem has played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful startups in the region. Working closely with Careem’s founders, I’m confident we will deliver exceptional outcomes for riders, drivers, and cities, in this fast-moving part of the world.
Congratulations to every @Careem Captain, Customer and Colleague on this special moment. We've been blessed to impact the lives of millions in the region and it’s only the start as we join forces with @Uber.
— Mudassir Sheikha (@MudassirSheikha) March 26, 2019
“Joining forces with Uber will help us accelerate Careem’s purpose of simplifying and improving the lives of people, and building an awesome organisation that inspires. The mobility and broader internet opportunity in the region is massive and untapped, and has the potential to leapfrog our region into the digital future,” said Careem CEO and co-founder, Mudassir Sheikha.
He added, We could not have found a better partner than Uber under Dara’s leadership to realise this opportunity. This is a milestone moment for us and the region, and will serve as a catalyst for the region’s technology ecosystem by increasing the availability of resources for budding entrepreneurs from local and global investors
Months of Negotiations
Careem, founded in 2012, has a larger presence than Uber in the Middle East, North Africa, Pakistan, and Turkey, operating in 98 cities there compared with Uber’s roughly 23 locations. Careem was valued at about $2bn in a fundraising round last year.
Uber operates in more than 70 countries, but faces strong rivals in Latin America and India, and tough regulations in Europe.
The deal is particularly important for Uber, whose ability to be a competitive global ride-hailing player had come into question after it sold its operations in China, Russia and Southeast Asia to local rivals after sustaining heavy losses.
