While Uber is one of the most valuable VC-backed companies in the world and the leader in the US ridehailing market, it has faced considerable competition as it expands across the globe. In the Middle East, that has come mainly from Careem, which operates in many cities throughout the region.
If Uber does acquire Careem, it would be a different tactic for the $72 billion ridehailing giant. Over the past several years, it has sold off parts of its platform to local rivals in different countries as it gears up for a public offering in the US sometime next year.
Uber shed its China business to Beijing-based Didi Chuxing in August 2016, ending a long and contentious battle for market share in the country. In February, Uber completed its deal with Moscow-based technology company Yandex to merge their ridehailing businesses in Russia. As a result, Yandex owns the majority of the combined company, which was valued at $3.8 billion when the deal closed in February. And earlier this year, Uber agreed to take a 27.5% stake in Singapore-based Grab in exchange for taking own its cars off the road in parts of Southeast Asia (though that deal remains under review due to regulatory concerns).
A pickup of Careem would be Uber's first outright acquisition of another ridehailing company and only its seventh acquisition overall, per PitchBook data.
Careem was valued at an estimated $1.2 billion in the middle of 2017 when it closed a $500 million funding round. The company is in discussions to raise another $500 million at a reported valuation of $1.5 billion and is said to be aiming for an IPO that could come as soon as January 2019—though an acquisition would head that exit route off at the pass. Investors in Careem include Daimler, Saudi Telecom, DCM Ventures and Rakuten.