- The Company Operates in 98 Cities Across 14 Countries
Uber has officially announced that it’s buying Careem, ride sharing service which operates around 98 cities in the Middle East, Africa, and southern Asia, for $3.1 billion.
The New York Times notes that Careem will continue to operate as a separate brand, with a board of directors consisting of a mix of Uber and Careem representative.
Careem is very important acquisition for Uber, which has recently retreated from different overseas markets in China, Russia, and Southeast Asia.
Careem with an establishment business that spans 14 countries, Careem will give Uber a foothold in countries where it lacks a significant presence, of course as well as other markets where Uber doesn’t operate currently like Iraq and Morocco.
“CAREEM WILL BE A SEPARATE BRAND, BUT PARTS OF ITS NETWORK WILL BE INTEGRATED OVER TIME”
Uber is expected to IPO next month, with an valuation of around $120 billion dollars.
However, Reuters have noted down that the company has lost as much as $3.3 billion in last years on revenues of $11.3 billion dollars, as they were spent subsidising its riders and drivers to become more competitive with rivals.
It’s nearest US based rival, Lyft, filed its IPO at the beginning of March, with an expected valuation of as much as $23 billion or more.
In a memo sent to Uber’s staff which was later posted by CNBC, the company’s CEO Dara Khosrowshahi who said that the structure of the ddeal would allow Uber and Careem to “build new products and try new ideas across not one, but two, strong brands,” but said that over time he expected parts of their networks to integrate in order to increase efficiency, reduce wait times, and launch new products like high-capacity vehicles.
The acquisition, which will consists of $1.4 billion in cash and $1.7 billion in convertible notes, is now currently subject to regulatory approval.
Khosrowshahi says he expects the process to be completed until early 2020.