Investments

Careem Raises $350 Million In Funding

Taxi-hailing app Careem, which is a competitor to Uber in the Middle East, has raised $350 million in venture funding.

According to a report in Fortune, the fundraising was led by Rakuten, the Japanese eCommerce company, and Saudi Telecom Company. With the $350 million, Careem has a valuation of $1 billion.

Careem’s service is up and running in seven cities in 11 countries, largely in the Middle East. It does have service in Pakistan, Turkey and parts of North Africa. With the new investment, Careem plans to expand into other countries and will increase its driver pool to 15 new cities in Pakistan, Saudi Arabia and Egypt. For the Middle East, that could mean 1 million new jobs, noted the report.

The valuation and its ambitions to expand is making it a real competitor to Uber, which dwarfs it in size, currently in more than 400 cities across the globe. In June Uber got a $3.5 billion investment from Public Investment Fund, the Saudi Arabia investment fund, giving it a valuation then of $62 billion.

While Careem and Uber are growing in the Middle East, that doesn’t mean it’s been smooth sailing for the two. In late summer, Reuters reported that in Abu Dhabi, United Arab Emirates (UAE), 50 drivers for Uber Careem were arrested. Ride-hailing services were halted back then with no indication of when they might resume. A Careem executive said at the time, “In order to not inconvenience our customers and captains, we decided to temporarily limit our services until we obtain more clarity on the situation.”

In the UAE, drivers often work for both companies, and Uber has been facing demands from traditional taxi service stakeholders to raise its fares and comply with licensing requirements that would limit the number of drivers available for work. It’s thought that these licensing issues might be connected with the arrests.

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