Careem, a ridehailing company in acquisition talks with Uber, raised $200 million from Saudi backers
Careem, a Middle East rival to Uber, has closed an initial $200 million raise in a funding round co-led by Saudi Arabia's Kingdom Holding Company and other existing backers.
Kingdom Holding Company is an investment vehicle for Saudi's richest man, billionaire Prince Alwaleed bin Talal.
One source with knowledge of the matter said the deal values Dubai-headquartered Careem at upwards of $2 billion, and the ride-hailing firm eventually hopes to raise $500 million. The money will be used for expansion.
Mudassir Sheikha, CEO and cofounder of Careem, said: "Internet-enabled services are having a profound and positive impact on our region, where the consumer internet opportunity is huge and untapped.
"As a platform with 30 million users and presence in 120+ cities, Careem is uniquely positioned to tap into this opportunity by expanding into new verticals."
Careem operates in 15 countries across the Middle East, and boasts a little under half of Uber's user numbers. The company made headlines when it began working with female cab drivers in Saudi Arabia after the country lifted its driving ban on women in June.
Other lead investors in this round include Al Tayyar Group, Rakuten, and STV.
Prince Alwaleed bin Talal, Saudi's richest man and a member of the royal family.AP Photo
The deal comes at a sensitive time.
Saudi Arabia and its crown prince Mohammed bin Salman are under global scrutiny over the disappearance of Saudi journalist and Washington Post columnist Jamal Khashoggi. Khashoggi entered the Saudi consulate in Istanbul, Turkey on October 2 and has not been seen since. Turkish authorities have said he was brutally murdered and dismembered by Saudi agents, and that they have evidence to back this up.
Careem investor Prince Alwaleed bin Talal has run afoul of the Saudi authorities himself. His net worth has tumbled 58% since 2012, according to Bloomberg, in part thanks to his sudden detention last year in an anti-corruption crackdown. He is also reportedly a friend of Jamal Khashoggi.
Yet bin Talal's tech investments through Kingdom Holding, which includes Apple, Twitter, and Snap, have come under scrutiny as US companies try to reconcile their discomfort with Saudi Arabia's behaviour with the fact that the country is the biggest single investor for US startups.
One reason this may matter for Careem is that it has been in acquisition talks with Uber this summer, according to a source with knowledge of the matter. A spokeswoman declined to comment on whether the talks were still ongoing.
Uber's chief executive Dara Khosrowshahi recently pulled out of a Saudi investment conference, thanks to the uncertainty around Khashoggi. While Saudi's wealth fund happens to have a large stake in Uber, it's possible the company may back away from further ties for now.
