The Careem investors set to share in the $3.1bn Uber windfall - in pictures
Since the original founders let in institutional investors in 2013, Careem has raised $771m from them and now these backers are set to reap the rewards of their faith in the ride-hailing technology platform
Uber Technologies has agreed to buy Careem in a $3.1 billion (Dh11.39bn) deal that is the largest technology sector transaction in the Middle East so far, eclipsing Amazon’s $580 million acquisition of Souq in 2017.
Since the original founders Mudassir Sheikha and Magnus Olsson let in institutional investors in 2013, Careem has raised $771m from the likes of Mercedes-Benz's parent Daimler, Japan’s Rakuten, Saudi Arabia’s Al Tayyar Group and a number of venture capital funds from the region, Silicon Valley and elsewhere.
They will all now share in the windfall from the sale of the business to Uber, in accordance with their respective holdings.
A valuation on Careem of above $3bn also represents the creation of immense shareholder value since it was formed in 2012.
Saudi Arabia's Al Tayyar Travel Group is the largest corporate shareholder, having got involved back in 2014. On Tuesday, Al Tayyar said its exit value is 1.78bn Saudi riyals (Dh1.74bn).
The $3.1bn being paid for Careem is split into $1.4bn in cash and $1.7bn in notes convertible to Uber stock.
Professor Meziane Lasfer, professor of finance at Cass Business School, part of City, University of London, said that for investors of Careem "this acquisition is a good deal".
How Careem raised $771m
According to Crunchbase, in 2013, STC Ventures participated in a $1.7m seed funding round. It also took part in a $10m funding round a year later. Together in that 2014 capital raise were Al Tayyar and VCs Beco Capital and Endure Capital.
Al Tayyar, Beco and STC Ventures were once again involved when, in 2015, $60 million was raised. This time Wamda Capital, Lumia Capital, the Kuwait Investment Authority, Arzan Venture Capital and Abraaj Group were too. However, Abraaj exited in 2017, when a fresh $150m was raised at a valuation of $1.1bn - making Careem a so called 'unicorn', the name for tech start-ups that reach the $1bn mark. Daimler, the parent of Mercedes-Benz and Prince Alwaleed bin Talal's investment firm Kindgom Holding, came in at that point.
A year earlier, in 2016, Careem had been valued at $650m when it raised $350m from a group including Saudi Telecom Company, e-commerce company Rakuten and Emirati businesswoman Muna Easa Al Gurg.
In 2017, an undisclosed investment was made by Chinese ride-hailing company Didi Chuxing.
Only last October, Careem raised $200m at a $1.8bn valuation from investors.
Here's the full list of institutional investors in Careem (for more details on their investments see the slideshow at the top of the page):
Saudi Technology Ventures (STV)
Saudi Telecom Company
Kingdom Holding Company
Al Tayyar Group
Muna Essa Al Gurg
El Sewedy Investments
SQM Frontier Management
Kuwait Investment Authority
Arzan Venture Capital
Updated: March 27, 2019 03:29 PM