DUBAI (Reuters) – Careem started with a delivery service that everything from food to medicines on Monday, the diversification of the core Middle East ride-hailing business, and increasing competition with rival Uber Technologies.
Careem CEO, Mudassir Sheikha shows the logo of the company, delivery service Careen on his mobile phone at the head office in Dubai, UAE, December 13, 2018. REUTERS/Satish Kumar
The company has expanded its auto service operation at more than 120 cities in 15 predominantly Middle-East countries since its launch in 2012.
“We believe that the opportunity for the deliveries in the region is even greater than on the ride originates, the” Chief Executive and Co-Founder Mudassir Sheikha, told Reuters on Careem headquarters in Dubai. “It’s going to be a very significant part of Careem the course of the time.”
The plan is to more than $150 million in the development of the delivery business, starting with food delivery services in Dubai and Jeddah.
“If you see us, to prove that the model is in the UAE (United Arab Emirates) and Saudi (Arabia), you will see that we very quickly into new markets,” Sheikha said. “Egypt and Pakistan will come next, and then very quickly the rest of the footprint will follow.”
Careem, whose investors include the German carmaker Daimler and China’s biggest ride-hailing company DiDi Chuxing, has been experimenting with a food delivery since the acquisition of online restaurant listing platform in February. It also provides digital payment services.
The Careem NOW delivery service is a separate app for the car and be operated independently to the core business with Adeeb Warsi appointed as managing director. Warsi joined Careem in 2017 after more than seven years at the Boston Consulting Group, according to his LinkedIn profile.
In October, Careem said he had raised more than $200 million from existing investors to fund its expansion.
Careem will “probably” close to the funding in the first quarter of next year, raising a total of $500 million, including what was set up in October, Sheikha said.
Reuters reported in November Careem was looking to raise up to $200 million from Chinese investors, and that it is working with investment bank Jefferies as an adviser of investment opportunities and fundraising, including a possible merger and acquisition deal in the region with Uber [UBER.UL].
“The conversations have occurred with multiple parties within the framework of our fundraising,” Sheikha said. “There is a lot of interest to own a piece of the Middle East.”
He refused to comment on the question of whether Uber could be a potential investor. Uber also declined to comment.
Reporting by Alexander Cornwell; Editing by Elaine Hardcastle