careem uber business in dubai
Business Dubai

WHY UBER MAY BUY ITS BIG RIVAL IN THE MIDDLE EAST

Uber may be close to spending billions of dollars to buy its big rival in the Middle East.

The company is reportedly in talks to acquire Careem, a startup based in Dubai that has grown into the biggest ride-hailing app in the Middle East since it was founded in 2012.

Careem now has more than 30 million customers and its local knowledge and home-field advantage have made life tough for Uber since it entered the market in 2013.

The reported deal could value Careem at around $3 billion. Uber and Careem declined to comment. Careem was valued at more than $2 billion at its last funding round in October.

Uber has a mixed track record in international markets. Over the last three years it has retreated from China, Russia and eight Southeast Asian countries.

But Uber has been playing up its global ambitions as it prepares for an IPO and is likely to want to shore up its position in growth markets such as the Middle East. CFO Nelson Chai said in November that the company had invested in “high-potential markets in India and the Middle East where we continue to

A merger with Careem could help it reduce its losses. But regional instability could raise risks for Uber, he added. Careem operates in 22 cities in Pakistan, where a recent spike in tension with India has raised concerns of renewed conflict between the powerful neighbors. A takeover could be pushed by investors who have backed both companies.

SOURCE

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