Dubai-based ride-hailing app Careem has secured $200 million in fresh funding from existing backers including Kingdom Holding, the investment vehicle for Saudi billionaire Prince Alwaleed bin Talal’s. The investment will is used to expand into mass transportation, deliveries, and payments.
Kingdom Holding said in a statement its investment in the company was part of its “strategy to invest in new promising technologies.”
Careem’s other investors include Al Tayyar Group, Japanese internet giant Rakuten and venture capital firm Saudi Technology Ventures (STV).
The ride-hailing app, which counts German automaker Daimler and China’s largest ride-hailing behemoth Didi Chuxing among its other investors, was said to weigh $1 billion as of December 2016.
The company has an estimated valuation could be over $2 billion. It is based on previous fundraising and expansion of the company into more profitable segments and makers.
Launched in Dubai in 2012 by Mudassir Sheikha and Magnus Olsson, who had both worked as management consultants at McKinsey & Co., has grown its presence to over 80 cities across the across the Middle East, North Africa, Turkey, and Pakistan (“MENATP”) region. While it has flexed over 30 percent month-on-month growth during this period, it is yet to make a profit.
Careem is planning to invest $150 million to launch its food delivery business to rival Uber. In February, it acquired RoundMenu with the aim to start food delivery services to compete with UberEats, Zomato, Deliveroo and Talabat. There is a demand for food delivery services in the Middle East, particularly in the Gulf States where temperatures can rise over 50 degrees in the summer.
In July, it bought a minority stake in an Egyptian bus transportation startup Swvl. Careem plans to provide affordable public transportation services in the Middle East and North Africa.
Careem rivals with San Francisco-based Uber Technologies, which has been actively preparing to go public next year. According to a Wall Street Journal report, Uber has told by Morgan Stanley and Goldman Sachs that it could be worth $120 billion.
The latest round of funding will enable Careem to use its local knowledge to keep Uber out of the region and build an invaluable suite of offerings.