UAE’s e& acquires $400m majority stake in Careem’s Super App

Dubai News

Careem, the ride-hailing service owned by Uber, has announced a spin-out known as Careem Technologies with backing from e&, formerly Etisalat — an Abu Dhabi-based tech holding company.

The move will see e& acquire a 50.03% majority stake in Careem Technologies with a $400 million investment. The deal will be financed from e&’s existing cash balance and will allow the company to create a regional super app champion, according to a regulatory disclosure made by e&. Careem’s ride-hailing business will remain fully owned by Uber. The acquisition will enable e& to diversify operations and extend its reach globally, in line with its strategic plans.

Today is a big day. A new journey for #Careem begins as we welcome the global technology and investment group e& as an investor alongside Uber, supporting our vision to become the first “everything app” in the greater Middle East. pic.twitter.com/z2COm6viCs

— Careem (@careem) April 10, 2023

Careem’s ride-hailing business remains fully owned by Uber, which acquired it for $3.1 billion in 2019. Uber’s stake in the spinout is currently undisclosed. The deal will see Careem benefit from e&’s large customer base as well as its experience scaling tech businesses across a geographic area that both companies share, according to a statement made by Careem.

The new company, Careem Technologies, will focus on the growth of Careem’s “super app” which offers a range of services beyond ride-hailing, such as grocery delivery, food delivery, PCR test booking, digital payments and remittance transfers, bicycle rentals, laundry and cleaning services and event ticket booking. The investment from e& will significantly accelerate Careem’s goal of creating the first “everything app” for customers across the Middle East.

Careem started raising funds for its super app over a year ago. But since then, technology firms have found it more difficult to attract investment after rising interest rates marked the end of cheap money.

The acquisition is in line with e&’s recent strategic agreements, which have seen the company extend its reach across the globe. Last year, e& signed an agreement with South Korea’s Bespin Global to form a joint venture with an initial capital of $10m.

Earlier this year, e& became the largest shareholder in Vodafone Group after boosting its holdings to 14%. The acquisition of Careem Technologies is the latest move in e&’s diversification strategy, which seeks to extend its reach beyond telecoms operations.

Hatem Dowidar, Group CEO, e&

Careem CEO and co-founder Mudassir Sheikha

Careem CEO and co-founder Mudassir Sheikha said, “The opportunity to use technology to leapfrog the lives of people in the region is enormous. Uber has been an incredible partner over the last three years as we expanded our mission to simplify the lives of people with everyday services beyond ride-hailing. We are excited to bring e& into the family. Their passion for uplifting the region and the synergies across their portfolio are extremely valuable. With two strong partners in e& and Uber, I have no doubt that we will build the preeminent technology platform of the region.”

Careem, established in 2012 in Dubai by co-founder and CEO Mudassir Sheikha, operates in over 80 cities and 10 countries. The company has grown from a Dubai-based ride-sharing firm to a “super app” platform, used across the Middle East from Morocco to Pakistan.