Careem, the Middle East-based transportation services company that Uber bought in 2019, is spinning its supercharged app business into a new startup backed by $400 million from Emirates Telecom Group.
Emirates Telecom, the UAE telecom giant now known as e&, said on Monday that it had reached an agreement with Uber to buy a 50.03% stake in the new company called Careem Technologies.
Following the deal, Careem will be split into two companies, Careem Rides and Careem Technologies, according to a blog post from Careem CEO and co-founder Mudassir Sheikha.
Our clear goal is to make its super applications unit the dominant business.
Careem Rides, which is wholly owned by Uber, will employ 260 people and focus on its core ride-hailing product. Ashish Labroo, who will start reporting in Uber’s Rides, will start driving Careem Rides.
Careem Technologies will operate the “Super App” along with all other segments, according to Al Sheikha. The business will be owned by the founders of e & Uber and Careem, including Sheikha and Magnus Olsson. This unit, which will be managed by the sheikha, will have about 1,400 employees.
Founded in 2012 as a competitor to Uber, Careem has since added food delivery, packing, bus services and credit transfers. Careem has made a number of acquisitions such as RoundMenu and Commut as it has diversified its business. Uber acquired Careem in 2019 for $3.1 billion.
This latest move shows that Careem’s founders and most recent investors see the greatest potential in services that extend far beyond the ride-hailing service. The Super app, which is available in 10 countries, brings together all of Careem’s products such as food delivery, bike rentals, financial services that allow users to send and receive payments, and third-party services such as cleaning into one platform.
The $400 million of the new funding, Sheikha said, will be used to “expand superior application scale and build class-leading segments across all of our key markets.”