Uber Acquires Careem: Largest Exit for a Middle Eastern Startup!

A year after consistent rumors about Uber and Careem joining forces it has officially happened, though in a way none of us expected. Given that Careem is one of the largest Middle Eastern startups, it was thought that joining forces might mean forming a partnership. However, what actually happened was the exact opposite, since Uber decided to acquire its rival Careem for $3.1 Billion ($1.7 billion in convertible notes and $1.4 billion in cash).

The acquisition is expected to close after regulatory approvals by Q1 2020, marking the exit of one of the largest Middle Eastern startup and one of the biggest rivals for Uber. As the deal gets sealed, Careem will become Uber’s subsidiary. Though, keeping its brand name and continuing to be run by its cofounder and CEO Mudassir Sheikha. Therefore, as stated, Uber and Careem will both remain operating as independent brands for the time being.

Careem CEO and co-founder, Mudassir Sheikha, stated that, “Joining forces with Uber will help us accelerate Careem’s purpose of simplifying and improving the lives of people, and building an awesome organization that inspires. The mobility and broader internet opportunity in the region is massive and untapped, and has the potential to leapfrog our region into the digital future. We could not have found a better partner than Uber under Dara’s leadership to realise this opportunity. 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.”

While Uber CEO, Dara Khosrowshahi, commented saying, “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. 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.”

All this does is keep stirring our minds with questions that we can’t find certain answers to. Is this just the effect of the global market recognition or is it the lifespan of Middle Eastern startups? Does this have any notations or effect on where the future of MENA startups might be heading towards? Could this be a start of a virtual monopoly rise that attracts investors? We will never know yet.

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