Middle East-based ride-hailing company Careem is expanding its business into a delivery service, a tech outlet reported.
The company, which is in direct competition with other ride-providing services in the Middle East, including Uber, is calling the venture Careem Now.
Careem Now will start with food delivery services in Dubai and Jeddah, but the company sees the service eventually expanding to include pharmaceuticals. Careem plans to invest a sizable amount of money into the new service – to the tune of $150 million.
“We believe the opportunity for deliveries in the region is even bigger than ride-hailing,” Chief Executive Mudassir Sheikha told Reuters. “It is going to become a very significant part of Careem over time.”
Careem Now will be separate from Careem’s ride-hailing operation and have its own app and call center.
Careem is in the process of completing an almost $500 million funding round, and the company raised $200 million in October. Careem has operated in 120 cities and 15 Middle East countries since its 2012 launch.
Sheikha said the company will “most likely” close out the funding round in the first quarter of next year. “Discussions have happened with multiple parties in the context of our fundraising,” he said. “There is a lot of interest to own a piece of the Middle East internet opportunity.”
Careem plans to see similar growth with the new service. “Once you see us prove the model in the UAE (United Arab Emirates) and Saudi (Arabia), you will see us very quickly go to new markets,” Sheikha said. “Egypt and Pakistan will come next, and then very soon the rest of the footprint will follow.”
Careem’s investors include Daimler, a German automotive company, and Didi Chuxing, China’s biggest ride-hailing company. Careem has been after food delivery since February, when it acquired an online restaurant listing platform. The company also offers customers digital payment services.