(Editor’s note: This article has been updated to include the new capital injection of Prince Alwaleed Bin Talal and the announcement of Abraaj Capital divesting its stake in Careem).
Saudi billionaire Prince Alwaleed Bin Talal has joined Daimler AG, one of the world’s biggest luxury-car makers, DCM Ventures and New York-based Coatue Management LLC, in a $500 million Series E fundraising in Careem, which valued the company at $1 billion.
The Dubai-based ride-hailing company had raised $350 million from investors including Japan’s Rakuten Inc. and Saudi Telecom Co. when it announced the results of its first round of fundraising in December 2016.
The Prince’s investment vehicle, Kingdom Holding Company (KHC), has invested $62 million, making its total share of the deal reach 12 percent. Investment amounts from other participants were not disclosed.
In an email to Wamda, CEO Mudassir Sheikha, said Prince Alwaleed and Careem will share knowledge and resources covering technology, products, operations and business planning. He said that KHC, and in turn, Prince Alwaleed, will support Careem in accelerating its innovation projects and expansion across the Middle East and North Africa, allowing it to strengthen its leading market position and further enhance its high-quality transportation offerings across the region.
Careem has ambitions to become a world-class technology company. In pursuit of this goal, Sheikha, explained they are always looking for opportunities to partner with innovative, technology-driven firms worldwide.
“KHC is internationally renowned for its technology investments, including Twitter and Amazon, and has been looking to invest in fast-growing ride-hailing companies operating in high-potential markets around the world. The Middle East and Africa region, and Careem’s enormous, industry-shaping success here, provided just the right opportunity for KHC to make their next big strategic move,” Sheikha told Wamda.
Series E rounds are usually rare to find among regional companies. Thus, this deal will push Careem to consolidate its leading position in the region where it currently operates. “We look upon expansion opportunities in terms of depth as well as breadth. Currently, we are at one percent penetration when you look at ride-hailing usage in the broader Middle East, and our business strategy is firmly committed to capturing the other 99 percent of people across the region whose lives we can impact. In markets like Egypt, Saudi Arabia and Pakistan, there are many more cities and towns in need of safe, reliable, affordable transportation to get from A to B,” Sheikha said.
The Abraaj Group exits
Careem has grown to be one of the leading transportation and ride hailing businesses across the Middle East, North Africa, Turkey and Pakistan (MENATP) region. Since then, the company has achieved steady double digit growth and continues to expand. As of June 2017, Careem is active in over 80 cities, up from 20 at the time of Abraaj’s $60 million investment in 2015.
In parallel with the deal, The Abraaj Group, one of the leading investors operating in growth markets, today announced that it divested its shareholding in Careem to KHC. Financial figures about this transaction were not disclosed by The Abraaj Group.
Ahmed Badreldin, partner and head of Middle East and North Africa at The Abraaj Group, said: “We recognized the opportunity for Careem to scale and rapidly grow its offering across the region. The markets in which Careem operates benefit from a combined GDP of $3.6 trillion, representing a populous and connected economy, and one that will increasingly benefit from the services that Careem provides.”
Sheikha said in a statement released today: “The Abraaj Group has been a great partner for us over the past two years, and the company’s unique regional insights and global resources has been a major contributor to our current success. We will continue to expand, innovate, lead and serve our mission of simplifying the lives of people in the region.”
Careem in Palestine
On June 13 Careem announced its debut in Palestine starting its operations in Ramallah.
Careem aims to boost the local economy by enabling residents to commute hassle-free with greater convenience. The company also provides much needed opportunities for current and future captains to work or supplement their income through the creation of jobs. Launching the app in Palestine is set to empower the local population through the transfer of knowledge and skills, with the possibility of stimulating advances in technology and other sectors from communications to logistics.
Feature image via Careem's website