DUBAI – A Saudi billionaire and Daimler AG, the maker of Mercedes-Benz cars, have become the latest investors in fast-growing ride-hailing service Careem, the main Middle Eastern rival to Uber Technologies.
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Prince al-Waleed bin Talal's investment vehicle Kingdom Holding Co., which already owns stakes in Twitter Inc., Citigroup Inc. and Time Warner Inc., and Daimler participated in the second round of a $500 million fundraising, Careem said in a statement Thursday. Kingdom acquired the Careem stake from Dubai-based private-equity firm The Abraaj Group but no details were given.
The transaction values the Dubai-based startup at $1 billion, which makes it one of the first regional players to achieve that milestone.
DCM Ventures and New York-based Coatue Management LLC also contributed to the latest fundraising, Careem added.
"The opportunity for further expansion in this region is huge," said Careem co-founder and chief executive Mudassir Sheikha. Careem said it would use the funds to gain further traction in the region and to help develop driverless pods as a new mode of public transportation.
Careem is widely seen as one of the region's tech success stories. Launched in 2012, the company is now active in more than 80 cities in the broader Middle East and boasts over 10 million users. In the past six months alone, Careem started operating in Turkey and in additional cities in Egypt and Pakistan. The app is particularly popular in Saudi Arabia where women are barred from driving.
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Careem joins a number of homegrown tech companies in the Middle East that are increasingly attracting foreign interest and money. Earlier this year, online retailer Souq.com was acquired by Amazon Inc. in a deal estimated to be worth around $700 million. Mohamed Alabbar, a regional property tycoon, has launched his own $1 billion e-commerce project and has in the past year acquired several smaller companies in that space.
Saudi Arabia's increasingly-active sovereign-wealth fund, the Public Investment Fund, is also taking notice. The PIF last year took a $3.5 billion stake in Uber. The PIF also owns part of Saudi Telecom Co., one of Careem's early investors.
Prince al-Waleed owns 95% of Riyadh-listed Kingdom Holding, an international investment company that also holds a stake in News Corp., owner of Dow Jones, which is the publisher of The Wall Street Journal.
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(END) Dow Jones Newswires
June 15, 2017 05:55 ET (09:55 GMT)