Uber’s rival ride-hailing giants are bagging investments left and right. The latest startup to top up its war chest in order to gain a competitive edge against Uber operates in the Middle East and North Africa. Called Careem, the Dubai-based ride-hailing giant has announced that it has secured a massive $350 million investment co-led by Japanese e-commerce giant Rakuten and Saudi Telecom Company (STC). This round values the company at a billion dollars and pushes it into the ‘unicorn startup’ category.
This fundraising round also saw participation from new and existing backers including the Abraaj Group, Al Tayyar Group, Beco Capital, El Sewedy Investments, Endure Capital, Lumia Capital, SQM Frontier and Wamda Capital among several others. This transaction will also see Rakuten executive Oskar Mielczarek de la Miel and an STC Group executive being added to the Board of Directors.
Talking about their investment, Oskar Mielczarek de la Miel, executive officer at Rakuten, says,
The MENA region has a growing, connected, urban population with great potential for ride-hailing and other e-commerce services . This investment directly aligns with Rakuten’s vision for global innovation as Careem has demonstrated its ability to scale to one of the largest shared economy platforms in the region and to accelerate the adoption of new transit solutions.
Dr. Khaled Biyari, CEO of STC also comments on their investment in Careem saying,
We are excited to continue a strategic partnership that began in 2013 through STC Ventures’ first investment in Careem and help build a mobility platform across the MENA region. Our investment is a clear bet on the future of mobility, strategic adjacencies, and Careem’s technology leadership in the region.
Headquartered in Dubai, Careem was founded by Abdulla Elyas, Magnus Olsson, Mudassir Sheikha back in 2012. The company is currently operational in 47 cities across 11 countries, most prominently in the Middle East, including North Africa, Turkey, and Pakistan. It boasts of having over 150,000 drivers and nearly 6 million users across the globe.
The capital infusion will be utilized towards the global expansion of its operations to reach 15 new cities across Pakistan, Saudi Arabia, and Egypt in December itself Working on expanding their vision of making lives simpler by connecting people, Careem now plans to invest in creating a million new jobs by expanding their driver pool. The job creation program has been spanned over the next two years. It will also invest a chunk of capital in the development of their $100Mn research center focused on accelerating “innovation in transportation-related technology infrastructure.”
Commenting on the fundraising round, Mudassir Sheikha, co-founder and CEO of Careem, says,
We are inspired and humbled to work with world-class strategic partners like Rakuten and STC. They not only bring significant institutional backing for Careem’s new horizons, but also global technology leadership and deep local experience bringing us closer to achieving our mission of improving the lives of everyone in the region.
The closure of this fundraising round is only the first tranche of the larger $500 million investment that Careem is gunning for. Prior to this, the company has secured over 70 million in three rounds and the total capital raised now stands at over $421 million. This investment will provide Careem with some cushion against the $63 billion American ride-hailing giant Uber, which has a presence in more than 400 cities worldwide, including the Middle East.
This is, however, not the first Uber rival to secure a massive amount of investment to better their offerings, technology and driver pool. The company’s southeastern rival, Grab, has recently also secured over $750 million from the likes of Tokyo Century, and SoftBank.