Saudi billionaire Prince Alwaleed, Daimler take part in $500m Careem funding round

Saudi billionaire Prince Alwaleed bin Talal and German automotive multinational Daimler are among the investors in a $500m fundraising round by Dubai-based ride app Careem.

The round, which also saw participation from DCM Ventures and New York-based Coatue Management LLC , valued Careem at $1bn, the company said.

Alwaleed’s Kingdom Holding investment vehicle acquired a 7.11 per cent stake in Careem for $67m through he purchase of shares from existing investor Abraaj Group.

The company will also get a seat on Careem’s board.

The latest investment was an extension of a $350m round in December, which attracted investors including Saudi Telecom.

Careem announced its expansion into Palestine this week as it continues to grow its presence across the Middle East and North Africa.

Read: Dubai taxi hailing app Careem expands into Palestine

It currently operates ride services in more than 80 cities and has recently expanded its offering to include courier services in some markets.

Read: After Uber, ride sharing app Careem launches affordable service in Dubai

“The opportunity for further expansion in this region is huge, not just broadening and deepening our presence in the broader Middle East markets, but also in driving innovation that can have a meaningful impact on our communities,” said founder and CEO Mudassir Sheikha after the announcement.

“KHC and Daimler AG both bring deep-pockets and a long-term perspective on global technology adoption, and we are excited to welcome them on this journey to improve the lives of people in the Middle East.”

Sheikha later told Reuters that the firm was eyeing new North African markets, like Tunisia and Algeria, for expansion but had “no plans” to enter Iran.

He added that Careem aimed to increase its number of drivers from 250,000 today to one million next year and was seeing a 20 per cent growth rate a month, with a current user base of 10 million.

The CEO previously indicated the company was seeking acquisitions and potential exit options for investors including an IPO in the coming years and aimed to turn its first profit in the second half of 2018.

Read: Taxi sharing app Careem on lookout for acquisitions, IPO an option

Careem’s rival Uber is backed by Saudi Arabia’s Public Investment Fund.

Read: Saudi Arabia invests $3.5bn in Uber