Uber recently announced that it is acquiring ride-hailing company Careem. Careem is an established company that operates in 15 countries and 120 cities in the Middle East. This acquisition illustrates Uber’s approach to grow internationally and in new markets, says Gaurav Mohindra.
Uber announced the acquisition through a press release on March 26, 2019. The transaction is expected to close in early 2020 subject to appropriate regulatory approvals. Uber is acquiring Careem for $3.1 Billion. The payment consists of $1.7 Billion in convertible notes and $1.4 Billion in cash. Careem was founded in 2012 and quickly saw success as the ride-hailing economy expanded across the region.
It is anticipated that Careem will continue to use its brand and name in the region. It is not unusual for acquired companies to become wholly-owned subsidiaries. Careem is a recognized brand in its market and can continue to leverage the goodwill it has built over the years, says Gaurav Mohindra from Chicago, Illinois. Careem CEO and co-founder, Mudassir Sheikha, will continue to lead Careem’s business.
It is not surprising that Uber entered into this transaction. Uber is poised for an IPO soon and is continuing to expand its services offerings globally. It would take Uber considerable time, effort, and cost to organically capture new regions. When a company, such as Uber, seeks to grow quickly – acquisition is an attractive option. In addition, Uber is a well-funded company and their access to capital provides acquisition as a good growth strategy.
Careem’s service offerings include mobility, delivery, and payments. Their regional breadth ranges from Morocco to Pakistan, and major markets include Egypt, Jordan, Pakistan, Saudi Arabia, and the UAE.
Uber’s presence in the region will expand the digital services Careem currently offers.
Uber was founded in 2010, and its upcoming IPO is eagerly anticipated. Uber’s growth over the past 9 years is simply amazing. Uber has conducted over 10 billion trips since the company was founded, and has simply changed the way people move.
It’s exciting to see Uber grow into new markets and provide new service offerings. As Uber continues to grow, it would be anticipated that other acquisition similar to this one will take place. Uber may continue to acquire regional players to expand their presence in new markets, but also acquire companies having new services than they currently offer. As Uber’s infrastructure continues to improve, consumers will yield the benefit of having a seamless experience.