Careem, the Middle East-based ride-hailing company that Uber bought in 2019, is spinning out its super app business into a new startup backed with $400 million from Emirates Telecommunications Group Company.
Emirates Telecommunications, the UAE telco giant that is now known as e&, said Monday it reached an agreement with Uber to buy a 50.03% stake in the new company called Careem Technologies.
Following the deal, Careem will be broken into two companies, Careem Rides and Careem Technologies, according to a blog post from Careem CEO and co-founder Mudassir Sheikha.
The clear aim is to make its Super App unit the dominate business.
Careem Rides, which will be fully owned by Uber, will be staffed by 260 people and focus on its core ride-hailing product. Ashish Labroo, who will start reporting into Uber’s Rides leadership, will lead Careem Rides.
Careem Technologies will operate the “Super App” along with all other verticals, according to Sheikha. This business will be owned jointly by e&, Uber and Careem’s co-founders, which includes Sheikha and Magnus Olsson. This unit, which will be led by Sheikha, will have about 1,400 employees.
Careem was founded in 2012 as a ride-hailing rival to Uber and has since added food and package delivery, bus services and credit transfers. Careem made a number of acquisitions, such as RoundMenu and Commut, as it diversified its business. Uber acquired Careem in 2019 for $3.1 billion.
This latest move shows Careem’s founders and its newest investor see the most potential in services that stretch well beyond ride-hailing. The Super app, which is available in 10 countries, combines all of Careem’s products such as food delivery, bike rentals and financial services that let users send and receive payments, and third-party services like cleaning into a single platform.
Sheikha said the $400 million in new funding will be used to “scale the Super App and build category-leading verticals in all our key markets.”
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