On-demand ride provider Uber has entered talks to acquire Careem, a United Arab Emirates-based counterpart backed by several corporate investors, for up to $2.5bn, Bloomberg reported yesterday.
Uber would likely pay between $2bn and $2.5bn for the company, according to people familiar with the matter. The companies had initiated talks exploring the possibility of merging their Middle Eastern operations in July this year.
Careem’s ride hailing service has more than 15 million registered users and stretches across more than 100 cities in the Middle East, North Africa, Turkey and Pakistan.
Uber is present in fewer cities in the region, but CEO Dara Khosrowshahi said in May this year the Middle East and Africa are markets in which the company expects to eventually emerge with the largest share.
Careem was reported the same month to be seeking $500m in funding at a $1.5bn valuation, though no progress in that prospective round has been disclosed. It had raised a total of $572m before China-headquartered ride hailing platform Didi Chuxing invested an undisclosed sum in August 2017.
The company had closed a $500m round two months before, adding $150m from e-commerce firm Rakuten, automotive manufacturer Daimler, Kingdom Holding, DCM Ventures and Coatue Management to the $350m it had received in late 2016.
The $350m first tranche reportedly valued Careem at $1bn and featured telecommunications firm Saudi Telecom, Rakuten, travel services provider Al Tayyar, Abraaj Group, Beco Capital, Lumia Capital, Wamda Capital, SQM Frontier, El Sewedy Investments and Endure Capital.
Saudi Telecom had originally provided $1.7m for Careem in 2013, the year after it was founded, before combining with Al Tayyar to invest $10m in 2014. Beco Capital, Lumia Capital, Abraaj Group, Wamda Capital and Impulse joined the corporates for a $60m round the following year.