Uber is buying their biggest competition in the middle east.
In the biggest tech deal the region has ever seen, Uber is paying $3.1 billion for ‘Careem‘ with a mixture of cash and securities. That will convert into Uber shares when the company goes public.
Careem, which a taxi company based in Dubai, was founded in 2012 and has since become the regional market leader with 30 million users across 90 cities in the Middle East, North Africa and Pakistan. It was valued at more than $2 billion in a funding round in October.
Careem will operate under its own brand as a subsidiary of Uber and continue to be led by CEO Mudassir Sheikha, the companies said in a statement Tuesday.
Careem’s biggest investors include Rakuten, Didi Chuxing, Daimler (DDAIF) and the Saudi government, which has also poured billions into Uber.This is the second takeover of a Dubai unicorn after Amazon bought e-commerce startup Souq in 2017. The United Arab Emirates is pushing to become a regional tech hub but is yet to produce a third unicorn after Souq and Careem.
High license costs and a lack of funding have often deterred entrepreneurs. Abu Dhabi is trying change that and this week launched a new tech hub with incentives such as free housing and health care.The acquisition of Careem is pending regulatory approval and is expected to conclude in the first quarter of 2020.