Uber has bought one of the largest ride-hailing App in the Middle East. Reports emerging from the deal state that Uber settled on paying Careem $3.1 billion in a mixture of cash and securities that will convert into shares when the company goals public.
Careem is the dominant taxi- hailing company in the Middle East, North Africa, and Pakistan that has been in operation since 2012. Uber had been finding it difficult to compete with the company since it took advantage of its knowledge of the market. The company which was valued to be more than $2 billion in October operates in more than 90 cities servicing a customer base of about 30 million.
However, the company will still continue working under the Careem brand name as a subsidiary of Uber and will also retain the CEO Dara Khosrowshashi. The CEO stated that the new deal will enable the companies to try out new products as two rather than a single company’s thus growing strong brands.
Uber is expected to launch its public offering later this year and it is seeking a valuation of over $120 billion. The move will make give Uber the required dominance in the Middle East region and could help it recoup from its losses. Uber has had a turbulent experience in different regions having to pull out of China, Russia, and several South East Asian countries. Careem will use its local knowledge of the region to ensure that Uber is able to have a share of the market.