The U.S. ride hailing agent has finally made all the rumours regarding its acquisition of Dubai based rival Careem true. The rumour mill had been grinding about this acquisition for quite some time now and it felt very believable since Careem had a stronger hold over the south Asian countries than Uber and Uber made sure to be able to control over that part of the world as well. Consequently, buying Careem.
The U.S. ride-hailing giant will pay $1.4 billion in cash and $1.7 billion in convertible notes for Careem, the people said, asking not to identified because the talks are private. Shareholders in Careem, whose backers include Saudi Prince Alwaleed bin Talal’s investment firm and Japanese e-commerce company Rakuten Inc., have been asked to agree to the terms of the transaction by Monday evening and a deal could be announced as soon as Tuesday, the people said.
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Following Amazon.com Inc.’s acquisition of Dubai based online retailer Souq.com, this might just begin a trend with middle eastern entrepreneurs starting their own businesses on the same mindset has the industry giants and gaining fame in their respective countries ending up being bought by these industry giants with a lot of cash. Throughout this process, it’s the Middle Eastern investors who have a lot of oil-money to spend.
Careem was valued at about $1 billion in a late 2016 funding round, making it one of the most valuable technology startups in the Middle East at the time. Its backers also include STV, the venture capital arm of Saudi Telecom. Co., Al Tayyar Travel Group Holding Co., and Daimler AG.
Careem has expanded rapidly over the past few years, now having over a million drivers and operating in more than 90 cities in 15 countries, according to its website. It has also branched out into food and package deliveries, bus services, scheduled rides and credit transfers — in several instances launching services ahead of Uber.