China’s Didi backs Uber rival Careem to expand its global footprint into the Middle East
A week after its first investment in Europe, Chinese ride-sharing giant Didi Chuxing is spreading its wings once again after it announced a financing deal with Careem, an Uber rival in the Middle East that is valued at more than $1 billion. The size of the investment was not disclosed.
Yes, Didi is backing yet another Uber rival in another corner of the world. Aside from Taxify, the Europe and Africa Uber competitor that it invested in earlier this month, Didi has shares in Lyft in the U.S., India’s Ola, 99 in Latin America and Southeast Asia’s Grab. It also owns equity in Uber courtesy of the unique terms of the acquisition of the Uber China business last year. In that respect, it makes sense that it is considering investments in basically any ride-sharing company in the world.
Beyond giving it the potential to expand its service through acquisitions or partnerships at a later, these deals also help Didi — which is the world’s second highest value tech company behind Uber — to put Uber under some pressure. The firm can help its global partners b giving them more money and providing the expertise and tech capabilities that it has developed from serving 400 million users in China. As the saying goes: the enemy of my enemy is my friend. “Didi Chuxing brings leading edge AI capabilities, insight and expertise to our organization as we enter our next phase of growth,” Careem CEO Mudassir Sheikha said in a statement. “This evolution in our long relationship will enable Careem to more effectively pursue growth opportunities through continued innovation and sustainability.”
Dubai-headquartered Careem started out five years old as a scrappy Uber competitor, but it has grown into quite a formidable business in its own right. Back in June, it raised $500 million from investors that include auto giant Daimler at a valuation of $1.2 billion — that’s up on the $1 billion valuation that it scored when it raised the first part of that round in December 2016.
In total, Careem has raised just shy of $570 million to date, and its other backers include Rakuten and Saudi Telecom Company (STC). As for its business, Careem operates in 80 cities across 13 countries in the Middle East and North Africa. It claims to have over 12 million registered customers and in excess of 250,000 drivers. It has even played the Didi big brother role.
Back in July, it invested an undisclosed sum into Egypt-based Swvl. Following this investment Didi said its “global framework of collaboration” now covers over 60 percent of the world’s population across 1,000 cities. That gives a clear insight into what its next ambition is having already driven Uber out of China via that acquisition deal.
Things might be about to get a little more complicated if SoftBank, which has invested alongside Didi in many of its global deals, backs Uber. Following media reports, CEO Mashayoshi Son yesterday confirmed his interest in doing a deal with Uber, but he said that SoftBank is also weighing a deal with Lyft.
Note: The original version of this post was updated to correct Careem’s financing history