Why Did Uber Spend $3.1 Billion On A Middle Eastern Rival?

318 135
Published on 19 Nov 2019, 17:00
After Uber’s disastrous IPO, 2019 proved to be a rough year for the ridesharing giant. But there was one bright spot for Uber - its $3.1 billion acquisition of the Dubai-based ridesharing service Careem. Acquiring its former competitor gives Uber a major win in the Middle East and North Africa region, where Careem has gained a loyal user base thanks to its deep knowledge of the local market.

2019 was a rough year for Uber. First there was the disastrous IPO, where the company's share price declined straight out of the gate and never recovered. Then came a string of gigantic quarterly losses, leadership shakeups, and layoffs,further rattling investor confidence.

But a mere month and a half before things headed south, Uber announced a major acquisition, paying $3.1 billion for the Dubai-based ridesharing service Careem, giving many investors hope that the Middle East and North Africa could represent a major growth opportunity for the company.

Careem's deep knowledge of the local market has helped it gain a loyal userbase of 33 million, and allowed it to expand into 87 cities in 14 countries, including places like Iraq and Palestine, where Uber previously had no presence.

Now, Uber is projecting profitability by 2021. If it's going to get there, Careem and the greater Middle East and North Africa region may have an important role to play.

» Subscribe to CNBC: cnb.cx/SubscribeCNBC
» Subscribe to CNBC TV: cnb.cx/SubscribeCNBCtelevision
» Subscribe to CNBC Classic: cnb.cx/SubscribeCNBCclassic

About CNBC: From 'Wall Street' to 'Main Street' to award winning original documentaries and Reality TV series, CNBC has you covered. Experience special sneak peeks of your favorite shows, exclusive video and more.

Connect with CNBC News Online
Get the latest news: cnbc.com
Follow CNBC on LinkedIn: cnb.cx/LinkedInCNBC
Follow CNBC News on Facebook: cnb.cx/LikeCNBC
Follow CNBC News on Twitter: cnb.cx/FollowCNBC
Follow CNBC News on Instagram: cnb.cx/InstagramCNBC


Why Did Uber Spend $3.1 Billion On A Middle Eastern Rival?