Careem deal opens up new front in Didi's battle with Uber
Deal to provide AI capabilities for Dubai ride-sharing company's expansion
Careem, the Dubai-based ride-sharing company that competes with Uber, has announced what might arguably be its most significant technological tie-up to date, after inking a strategic partnership with China's Didi Chuxing.
The agreement with Didi Chuxing, the second most valuable company of its kind in the world behind Uber, gives Careem access to the Chinese giant’s artificial intelligence (AI) expertise and international expertise, as the Middle Eastern company seeks to expand its operations.
The deal also opens up yet another front in Didi Chuxing’s international fight with Uber, after the two ride-sharing companies declared a stalemate in China last year following an exhausting price war.
The strategic partnership agreement with Careem, announced Tuesday, will see Didi Chuxing invest in the Dubai-based company, with the two parties agreeing to share knowledge “in intelligent transportation technology, product development, and operations.”
Careem declined to disclose the size of the investment.
“Resources and synergies from this alliance will be directed towards new opportunities for growth, market expansion and innovation,” said Mudassir Sheikha, Careem’s co-founder, in an emailed statement.
“Consolidating our leadership position in the MENA region, we will continue to pioneer local solutions and develop the right technologies that are able to have a meaningful impact on the communities in which we operate."
Mr Sheikha did not provide additional information on what impact the deal might have on Careem’s competition with Uber and other ride-sharing companies.
"We focus on serving our users rather than competition itself,” he said. “A rideshare service’s ultimate goal is to design ever more innovative, convenient and flexible products for ever broader communities.”
Uber did not respond to a request for comment on the impact of the deal on its operations.
Careem, which was founded five years ago, serves 12 million customers in 80 cities ranging from Pakistan to Turkey, Lebanon, Saudi Arabia, Jordan, Egypt and Morocco.
It is ahead of Uber in Pakistan and a strong second player to Uber in other regional markets, according to research firm SimilarWeb, which tracks consumer mobile and web usage habits.
The company raised US$350 million in December from investors including Japanese e-commerce leader Rakuten and Saudi Telecom. The funding gave the company a valuation of $1 billion, making it the Middle East’s first tech “unicorn.”
It has subsequently attracted a $62m investment from Kingdom Holding Co., the Saudi publicly listed investment firm of billionaire businessman Prince Alwaleed bin Talal, which took a 7.1 per cent stake in June.
Other investors include the Kuwait Investment Authority and car company Daimler.
Didi Chuxing’s tie up with Careem comes a week after the Chinese giant announced a similar investment in Taxify, an Estonian-based Uber rival active in 25 countries across Europe and Africa.
The Chinese firm holds stakes in other international Uber rivals including the US’s Lyft, India’s Ola, 99 in Latin America and Grab in Southeast Asia.
Didi Chuxing took a stake in Uber itself in August 2016, as part of a merger agreement with its rival’s Chinese business. The deal, which also saw Uber take a stake in Didi Chuxing, came after both companies poured billions of dollars into expanding and subsidising their local businesses in a quest for market share.
In a further twist, Didi Chuxing investor Softbank said this week that it was planning to increase its investments in the US, by way of an investment in either Uber or Lyft.
* With Reuters
Updated: August 8, 2017 07:39 PM