Its officially confirmed that Uber is buying Middle East rival Careem in an acquisition deal worth $3.1 billion.
The payment consists of $1.7 billion in convertible notes and $1.4 billion in cash while acquisition which remains subject to regulatory approval, is expected to close in the first quarter of 2020, the companies said.
Careem was founded as Uber’s rival in 2012 but has since diversified into other services such as food and package delivery, bus services and credit transfers. The startup has raised around $772M to date, according to reputable sources with investors including Saudi Arabia’s Kingdom Holdings, Chinese ride-hailing giant Didi Chuxing and Japanese tech giant Rakuten.
Though the partnership, Careem seeks to leapfrog the Middle East into the digital future and pool resources for its entrepreneurs through investors.
” Joining forces with Uber will help us accelerate Careem’s purpose of simplifying and improving the lives of people, and building an awesome organization 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. We could not have found a better partner than Uber under Dara’s leadership to realize 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,” commented Careem CEO and co-founder, Mudassir Sheikha
Uber says it will acquire all of Careem ’s mobility, delivery, and payments businesses across the greater Middle East region, as the rival will become a wholly owned subsidiary continually operating under its own brand alongside Uber’s own services in the region.
To streamline its business, Uber’s acquisition suggests important market growth and potential in the Middle East tapping into Careem’s vast business operations.
” This is an important moment for Uber as we continue to expand the strength of our 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, ” Uber CEO Dara Khosrowshahi said.
Following the Q1 2020 regulatory approval, the two will operate as separate brands in all the markets they operate in, but until then, nothing changes.