Uber coughed up over $3 billion to get its hands on Dubai’s ride-hailing startup Careem, the Financial Times reported on Wednesday (Oct. 2).
Founded in 2012, the ride-hailing unicorn – which is valued at over $1 billion – was the premier tech startup in the Middle East and North Africa. Uber paid $3.1 billion to take ownership. The deal is expected to close in January of 2020.
Although the startup will be a wholly-owned Uber subsidiary, Careem will continue to operate under its own brand, the news outlet reported.
Careem has 33 million customers and 1.2 million drivers, and operates in more than 100 cities across 14 countries from Morocco to Pakistan.
“This transaction brings together Uber’s global leadership and technical expertise with Careem’s regional technology infrastructure and proven ability to develop innovative local solutions,” Uber said in a statement to the news outlet.
Careem also launched a bus service in Cairo and a Jeddah-Mecca route in Saudi Arabia for pilgrims. The company is also working on a “last mile” of transportation to expand its networks, and is planning to launch restaurant and grocery delivery as well as pharmaceuticals.
“Innovation is at the heart of what we do at Careem, and has been critical to our success in winning over local markets,” said Co-founder and chief executive officer (CEO) Mudassir Sheikha.
“As we move toward becoming the region’s everyday ‘super app,’ innovation will play an even bigger role in providing the right services to simplify and improve more lives across our region – this will be key to Careem’s success,” Sheikha added.
Uber and Careem originally entered into talks in July of last year in hopes of resolving what could be a costly rivalry in the area. Uber is also investing heavily in other ventures like food delivery, electric bikes and self-driving cars.
Careem’s backers have included Saudi Prince Al-Waleed bin Talal’s investment firm and Japanese eCommerce company Rakuten.
The move shows that Uber is committed to the Middle East, where a Saudi Arabian sovereign wealth fund run by Crown Prince Mohammed bin Salman is located.