Careem, a transportation startup that is in 80 cities across the Middle East, has reportedly raised $150 million, closing a Series E venture capital funding round with $500 million raised.
According to a report in TechCrunch, with the new funding round, Mudassir Sheikha, Careem cofounder and CEO, said the company’s valuation now stands at $1 billion. A separate source told TechCrunch the valuation is now $1.2 billion. The latest round of funding is being led Saudi-based Kingdom Holding, the venture capital firm that also backs Lyft and was an investor in both Twitter and Snap ahead of their initial public offering. Daimler, the German car maker, DCM Ventures and Coatue Management also participated in the round of venture capital investing.
“With our investment in Careem, we are now taking the strategic step to becoming the world’s leading provider of mobility services,” Klaus Entenmann, CEO, Daimler Financial Services AG, said in a statement to TechCrunch. “Careem has quickly leapt to the leadership of ridesharing within the MENA regions by delivering rapid innovation and customer growth, and it is spearheading new ways to transport people from point A to point B.”
Prior to the $500 million funding round, the startup was only able to raise $472 million, but now with Uber struggling, investors see opportunities for competitors to step in and grow. What’s more, investors see a big opportunity for startups to grow transportation services that are more regional. Careem’s cofounder told TechCrunch that it and Uber account for only around 1 percent of the market for transportation services in the region.
“When it comes to ride hailing, Uber is the primary competitor, but between us we’re serving just 1 percent of the opportunity, so the biggest challenge is just growing,” he said in the interview. “Dubai is a truly global city, but as soon as you leave Dubai for places like Oman or Cairo or many other cities, you realize that public transport infrastructure is not extensive. Plus, in our markets, if you look at the numbers, car ownership is also very low. Transportation is supply-constrained.”