Dubai-based ride-hailing app Careem is reportedly being valued at around $1 billion (AED3.67 billion) after Saudi Telecom Co (STC) announced plans to purchase a 10 percent stake for $100 million (AED367m), according to a news report.
The board of STC approved the stake purchase on December 15 and intends to fund the deal from internal resources, it said in a statement on the Saudi stock exchange on Sunday. In a statement to the National, Matthew Reed, a Dubai-based analyst with consultancy Ovum said: "It’s part of a strategy of diversification, which has come about in response to slowing growth in some traditional telecoms services."
In September, Bloomberg reported that Careem was working with Credit Suisse Group AG to raise up to $500 million (AED1.835 billion), which would value it at over $1 billion after the new investment.
In 2015, Careem raised $60 million (AED220m) from investors including Abraaj Group. Initial investors in the firm include Wamda Capital and Saudi Arabia’s Al Tayyar Travel Group.
Launched in 2012 by Mudassir Sheikha and fellow McKinsey & Co colleague Magnus Olsson, Careem has expanded across the Middle East, North Africa, Turkey and Pakistan. It has a fleet of 90,000-plus drivers and more than four million users registered through its mobile app.