UAE tech giant e& to invest $400m in Careem Super App for majority stake
Uber will still retain full ownership in Careem's ride-hailing business
Dubai: The UAE telecom-tech giant e& is picking up a majority stake in Careem Super App, through a binding agreement with Uber Technologies., which will continue to own Careem's ride-hailing operations in full.
This will be done by creating a separate entity around Careem Super App, which in the recent past has expanded into multiple services, including remittances. "Careem’s ride hailing business will remain fully owned by Uber and continue to be available with all other Careem services on the existing app for customers," e& said in a statement.
e& is investing $400 million to be majority shareholder in Careem's Super App alongside Uber and all three of Careem's co-founders. The Careem Super App offers food and grocery delivery, micro-mobility, a digital wallet and assorted fintech services, and third-party services such as home cleaning, car rental and laundry.
It was in 2020 that Uber acquired Careem, setting off one of the biggest unicorn deals in the region.
Careem is operational in 10 countries across the Middle East, North Africa and South Asia. (News of a possible deal was first reported by Bloomberg.)
With the new investment, Careem plans to 'accelerate the realisation of its ambitious vision to create the first 'everything app''. This will include expanding on the core food, grocery, and fintech services and the Careem Plus subscription program in the region.
"Careem expects significant synergies with e& and anticipates benefiting from e&’s large customer base and extensive experience scaling complex tech enabled businesses across a largely shared geographic footprint," the statement added.
With two strong partners in e& and Uber, I have no doubt that we will build the preeminent technology platform of the region
e&'s ambitions
e& (formerly Etisalat) has been driving significant investments into M&A activities through the recent past. In addition, there is its role in the launch of the standalone digital bank Wio, as well as a deal to take a majority in the video-on-demand streaming platform Starzplay Arabia.
e& has also built up niche services in grocery order and delivery through El Grocer, and in the remittance space as well. In fact, the etisalat by e& app is as much a super-app in its own rights as far as the UAE digital marketplace is concerned.
Clearly, there is room for more super-apps in the UAE. “Super apps have catalysed the economic, social and cultural growth of emerging markets today," said Hatem Dowidar, Group CEO of e&. "The popularity has come from the need to provide a unique and seamless customer experience.
"The mobile-first population have given rise to an ecosystem that has encouraged the use and also expanded the scope for super-apps with user expectations turned towards performing their daily activities on digital platforms."
Careem Pay launched as a fintech in the UAE with digital wallet and payment products, including bill payments, international remittances, domestic peer-to-peer payments, and one-click checkout. Careem Bike doubled its network of pedal-assist bikes and grew 61%.
The subscription service Careem Plus saw its first partner service (home cleaning) grow 4.9x while it also on-boarded third-party partners offering rental cars, spa and laundry services.
All set for the next 10 years
In a statement, Dara Khosrowshahi, CEO of Uber, said: "Careem helped revolutionize mobility across the greater Middle East while building an incredible brand. I am thrilled to partner with Careem, and welcome e&, as we grow the Careem super-app to deliver more services to millions of people in this fast-moving part of the world."