Uber attempts to crack the Middle East
Uber is due to sign a deal worth $3.1 billion for the acquisition of a Dubai based rival Careem. The final agreement is due to be signed this week, and would mark a rare successful venture for tech companies in the Middle Eastern market.
Careem, a Dubai based firm established in 2012 has a transportation network with operations in 14 countries in South Asia, the Middle East and Africa. As of 2018, the company was said to be valued at the company is valued at over $2 billion and previously competed head-to-head in key Middle Eastern cities with the US firm.
The news comes ahead of the ride hailing giant’s forthcoming initial public offering, set to become one of the New York Stock Exchange’s largest ever listings, being valued at $120 billion according to the Wall Street Journal.
Uber’s deal indicates its continued interest in the Middle East where one of the firms biggest investors is based. Saudi Arabia’s sovereign wealth fund invested in 2016.
Previously, Uber had used agreements to offload expensive overseas operations in exchange for shareholdings in competitors, rather than acquiring them entirely.
This change in strategy mirrors a similar approach taken by Amazon in 2017, which acquired e-commerce site Souq.com for approximately $650 million.
With Middle Eastern governments attempting to diversify their oil-based economies, such foreign investment signals a welcome opportunity for young, tech based start-ups.
Both Careem and Uber have declined to comment.