Uber Technologies Inc. — the San Francisco based tech company which is popular for its ride-hailing business, is in advanced talks to buy its Middle East competitor Careem Networks FZ, as reported by Bloomberg according to the people familiar with the ongoing discussions.
According to the report, both companies may announce a cash-and-stock transaction that determines Careem’s value at about $3 billion in the coming weeks. Negotiations are going on and no final decision has been taken until now, according to the sources of Bloomberg which do not want to be identified.
Considering the impact of the term “advanced talks”, we can assume that the discussion between both ride-hailing companies is certainly making progress. It appears that Uber is sorting out ways to expand its business in the Middle East and Careem which has over a million registered drivers and operates in more than 100 cities in the Middle East is the right card to play at this time.
It must also be noted that Careem is backed by Saudi Prince Alwaleed bin Talal’s investment firm and Japanese e-commerce giant Rakuten Inc. The company was valued at about $1 billion in a 2016 funding round making one of the most valuable tech startups in the Middle East.
Meanwhile, Uber is on the right track to go public this year, as the company has been continuously seeking new avenues of growth in food delivery, logistics, electric bike, and self-driving cars projects. However, the company faces severe competition in its core business of ride-hailing in various Asian and Middle East countries including India, Pakistan, and Singapore.
Despite having a distressful time in 2017, Uber has received estimates from IPO bankers that have fixed its value at up to $120 billion. And if Uber remains successful in acquiring its rival, the company will surely be able to generate more revenue.
