Dubai: When it comes to the possibility of a Careem IPO, Bassel Al Nahlaoui isn’t saying.
“I cannot confirm or deny it,” Al Nahlaoui said straightforwardly.
Careem’s managing director for the Gulf region was speaking exclusively to Gulf News the day after reports emerged that suggested the ride-hailing app was preparing to raise up to $500 million (Dh1.84 billion) in new funds.
Some of the money, according to the report, would be used to support the development of new business lines, ahead of a potential initial public offering (IPO) in the future.
On this, Al Nahlaoui pointed to Careem’s recent acquisition of RoundMenu, a food delivery service, as evidence that it was was indeed pushing in to new sectors.
“Really the main objective of that [acquisition] was to test our logistics business and capabilities in this new vertical,” he said, adding: “We’ve always had the vision of diversifying in the region in to new businesses, and this is probably the first step we’ve taken towards that.”
Careem’s reason for branching out, Al Nahlaoui said, was to increase customer stickiness, and to give customers another reason to stay on the Careem application.
“In the future, I want people to be able to do everything from the Careem app, and not just ordering your car or your food,” he said.
On the challenge of competing against the likes of Uber Eats and Deliveroo in such a crowded market, Al Nahlaoui said that whilst the UAE’s food delivery market was saturated, Careem would offer something new.
Pressed on what that differentiator might be, he said: “We have the best logistics, so we will get you the food the quickest, we have our cash payment option, which a lot of customers enjoy using more than credit card. This is just the start.”
Analysts have speculated that this diversification of Careem’s business may be in preparation for a public listing in the future.
Whilst the company has never denied that a listing is indeed part of its future plans, Al Nahlaoui reiterated that Careem was currently “not really considering an IPO.”
Rival ride-hailing app Uber has seen its own ambitions for public offering hampered by its lack of profitability.
Careem has faced similar issues in turning a profit, with the company’s founders talking in the past about its plans to reach profitability in the future.
However, the company is a bit more fortunate than its rivals in that respect, according to Al Nahlaoui.
“This region is quite different compared to a lot of these other places,” he said, adding Careem was lucky in that “prices where we operate are quite higher than the prices in the Far East and so on.”
As for when the company would actually turn a profit, he said: “We have a very strong view on profitability, and a path to profitability, and it’s really a choice of when do we want to, you know, get on it or not.”
“It is very important to figure out how you’re going to become profitable, and when do you want to become profitable,” he added.
Al Nahlaoui did confirm, however, that in multiple cities throughout the Middle East and North Africa region, where Careem predominantly operates, the company was “extremely profitable.”
“The UAE is doing very well right now.”
Declining to provide an approximate timeline for the start-up to reach profitability, Al Nahlaoui would only say that it was “very tough” to answer that question.
“It’s not that clear on a global level,” he added.
Based in Dubai, Careem has seen its fortunes soar since it was founded in 2012, recently becoming the region’s first unicorn, slang for a start-up valued at over $1 billion.
In June of last year, the company closed a $500 million Series E round of funding, featuring German automaker Daimler, and venture capital firms such as Lumia Capital and Coatue Management.
All Nahlaoui would say on the recent Reuters report of a new $500 million injection was that “in our business, as you’re growing you always need the funds to help you grow.”
“We’re excited about the next stage of growth, and the next stage of funding.”
He declined to speculate on the types of investors being tapped for the reported funding, instead highlighting Careem’s current roster of companies that have participated in previous rounds.
He pointed to their diversity, from strategic investors to financial investors, and to their utility: “They all contribute something, sometimes advice, sometimes networks and so on.”