Careem raised $200 million from Saudi backers, valued at $2 billion

A
Saudi woman shows the Careem app on her mobile phone in Riyadh,
Saudi Arabia.
Faisal Al
Nasser/Reuters

• Careem, a Middle East ride-hailing equivalent to Uber,
  has raised a $200 million tranche for its latest round of
  funding.
• The deal values the company at more than $2 billion,
  one source said, and the company hopes to raise $500 million
  for the round.
• The deal was co-led by Kingdom Holding Company, the
  investment vehicle for Saudi billionaire Prince Alwaleed bin
  Talal, and other existing backers.
• Careem has been in acquisition talks with Uber this
  summer, and the deal comes at a sensitive time as US companies
  scrutinise Saudi’s influence on American tech
  startups.

Careem, a Middle East rival to Uber, has closed an initial $200
million raise in a funding round co-led by Saudi Arabia’s Kingdom
Holding Company and other existing backers.

Kingdom Holding Company is an investment vehicle for Saudi’s
richest man, billionaire Prince Alwaleed bin Talal.

One source with knowledge of the matter said the deal values
Dubai-headquartered Careem at upwards of $2 billion, and the
ride-hailing firm eventually hopes to raise $500 million. The
money will be used for expansion.

Mudassir Sheikha, CEO and cofounder of Careem, said:
“Internet-enabled services are having a profound and positive
impact on our region, where the consumer internet opportunity is
huge and untapped.

“As a platform with 30 million users and presence in 120+ cities,
Careem is uniquely positioned to tap into this opportunity by
expanding into new verticals.”

Careem operates in 15 countries across the Middle East, and
boasts a little under half of Uber’s user numbers. The company
made headlines when it began working with female cab drivers in
Saudi Arabia after the country lifted its driving ban on women in
June.

Other lead investors in this round include Al Tayyar Group,
Rakuten, and STV.

US tech firms are examining their ties to Saudi Arabia

Prince
Alwaleed bin Talal, Saudi’s richest man and a member of the royal
family.

AP
Photo

The deal comes at a sensitive time.

Saudi Arabia and its crown prince Mohammed bin Salman are under
global scrutiny over the disappearance of Saudi journalist and
Washington Post columnist Jamal Khashoggi. Khashoggi entered the
Saudi consulate in Istanbul, Turkey on October 2 and has not been
seen since. Turkish authorities
have said he was brutally murdered and dismembered by Saudi
agents, and that they have evidence to back this up.

Careem investor Prince Alwaleed bin Talal has run afoul of the
Saudi authorities himself.
His net worth has tumbled 58% since 2012, according to
Bloomberg, in part thanks to his sudden detention last year in an
anti-corruption crackdown. He is also
reportedly a friend of Jamal Khashoggi.

Yet bin Talal’s tech investments through Kingdom Holding, which
includes Apple, Twitter, and Snap, have come under scrutiny as US
companies try to reconcile their discomfort with Saudi Arabia’s
behaviour with the fact that
the country is the biggest single investor for US startups.

One reason this may matter for Careem is that it has been in
acquisition talks with Uber this summer, according to a source
with knowledge of the matter. A spokeswoman declined to comment
on whether the talks were still ongoing.

Uber’s chief executive Dara Khosrowshahi recently pulled out of a
Saudi investment conference, thanks to the uncertainty around
Khashoggi. While Saudi’s wealth fund happens to have a large
stake in Uber, it’s possible the company may back away from
further ties for now.