Uber, has confirmed that it is acquiring another ride-hailing startup based in Dubai, strengthening its position in a key market.
Uber is acquiring Careem Networks for $3.1 billion. Thanks to this acquisition, Uber will now enter new Middle Eastern markets such as Iraq, Palestine and Morocco, and solidify its position in other nearby markets.
Uber will pay $1.4 billion in cash and convertible notes totaling $1.7 billion. These shares can be converted to Uber shares priced at $55 per share.
Uber will also acquire Careem’s mobility, delivery, and payments businesses across the greater Middle East region.
“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,” said Uber CEO, Dara Khosrowshahi, in a statement. “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.”
Adds Careem CEO and co-founder, Mudassir Sheikha, “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.”
In its last funding round, Careem was valued at $1 billion and was backed by Daimler AG, STV, and Al Tayyar Travel Holding Group Co. Like Uber, it has been rapidly expanding, now in 90 cities in 15 countries, and delivering food, packages and other services. Uber is currently embarking on its initial public offering, which values the company at $120 billion.
The transaction is scheduled to close in the first quarter of 2020.