London, Dubai: Careem Networks FZ, which competes with Uber Technologies Inc in the Middle East, is close to raising about $300 million (Dh1.1 billion) in its first round of funding, according to two people with knowledge of the matter.
The Dubai-based ride-hailing company plans additional funding rounds, the people said, asking not to be identified because the information is private. Careem is seeking cash from a group of prominent financial and strategic investors, one of the people said, without providing names. No final agreements have been reached and talks may falter, the people said.
Regional ride-hailing services globally are raising cash to expand their businesses to better compete with the more established companies. Ola, India’s largest such start-up, is in talks to raise about $600 million and may close the deal by the end of the year, seeking to counter competition from Uber, a person familiar with the matter said this month.
Careem was working with Credit Suisse Group AG to raise as much as $500 million, people familiar with the matter said in September, adding that the company could be valued at more than $1 billion after the funding. The company raised $60 million last year from investors including Abraaj Group to expand in the Middle East, Africa and Asia. Investors in Careem’s earlier funding rounds include the venture-capital arm of Saudi Telecom Co., Dubai-based Wamda Capital and Saudi Arabia’s Al Tayyar Travel Group.
Representatives for Careem and Credit Suisse didn’t immediately comment.
The Middle East’s expanding population and economic prosperity is attracting more investment in technology start-ups in the region. Amazon.com Inc is weighing a bid for a stake in Dubai-based online retailer Souq.com FZ, people with knowledge of the matter said earlier this month. Emaar Properties PJSC chairman Mohamed Alabbar has partnered with a group of investors including Saudi Arabia’s sovereign wealth fund to put $1 billion into launching e-commerce firm Noon in January. Alabbar is also planning to launch a social app similar to WhatsApp, he said last month.
Fadi Ghandour, the founder of Aramex PJSC and Wamda Capital, plans to raise as much as $500 million for a second venture-capital fund to invest in e-commerce businesses in the Middle East, he told Bloomberg TV in August.
Careem and Uber suspended services in Dubai and Abu Dhabi in August for several days amid reports that police had arrested drivers and impounded cars. Mohamed Al-Qamzi, general manager of TransAD, the Abu Dhabi’s taxi regulator, said the companies had on occasion contravened regulations by offering trips at a lower price than licensed limousines, The National newspaper reported at the time.