Uber Technologies has agreed to buy Careem for $3.1 billion with Careem remaining independent to it’s operations as a ride platform.
This is goanna be the one of the biggest tech deals for the region Middle East , surpasses, Amazon’s $580 million purchase of Souq in 2017.
On Tuesday morning it was confirmed at an highly anticipated event that “Uber will buy all of Careem’s mobility, delivery, and payments businesses across all of its markets including Egypt, Jordan, Pakistan, Saudi Arabia and the UAE. The $3.1bn is split into $1.4bn in cash and $1.7bn in notes convertible to Uber stock.
This deal is expected to be complete in Q1 of next year as subjected to regulatory approvals and authorities. Once all the procedures has done, Careem will be fully owned subsidiary of Uber. But both the platforms will keep their operations independent in their regions.
Chief Executive of Careem , Mudassir Sheikha said “the deal with Uber is a “milestone moment” for the region’s technology sector.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,”
Since 2013 , “Careem has raised $771m from the likes of Mercedes-Benz’s parent Daimler, Japan’s Rakuten, Saudi Arabia’s Al Tayyar Group and a number of venture capital funds from the region, Silicon Valley and elsewhere. A valuation on Careem of above $3bn represents the creation of immense shareholder value since it was formed in 2012.”
Uber, based in San Francisco, also has a major regional investor backing in the Public Investment Fund, which took a 5 per cent stake for $3.5bn in 2016. Saudi Arabia is one of Careem’s most important markets and a third founder, Abdulla Elyas, came on board in 2014 when his digital addresses company Enwani was acquired to support expansion in the kingdom.
This will be resulted in better customer experience as the two of major ride hailing services has co -jointed and still will be operating independently . This will not affect the pricing so far , But it’s going to be great deal for all the Uber drivers and Careem Captains as the Rides and greater earning capacities and more job opportunities.
Dara Khosrowshahi, who took over the role from founder Travis Kalanick.
Mr Khosrowshahi told Uber employees in an email on what he described as a “great day for the Middle East” that “after careful consideration, we decided that this framework has the advantage of letting us build new products and try new ideas across not one, but two, strong brands, with strong operators within each”.
He praised Mr Sheikha and Mr Olsson as “first-class” entrepreneurs who shared Uber’s vision.
“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 start-ups in the region,” the Uber chief executive was quoted as saying in the joint statement.