Can Working Smart & Local Compete With Global Giants Burning Investor Money – Part 2: Careem vs Uber

Part 1: Anghami vs Spotify got a lot of rounds + an update was added at the end based on online discussions post-publishing

Now for Battle Royale of the season: 

Careem vs Uber 

I remember Mudassir and Magnus taking a booth at ArabNet back in early 2013. Standing diligently selling their service to business professionals: to introduce a better booking and billing experience for corporate car trips that matches that of airlines and hotels; and hustling to get media coverage and exposure. Fast forward just 5 years and Careem has exploded in size and offering probably beyond the founder’s imagination at that moment in time. 

There’s quite a lot that a $67B valuation (Uber) can buy you that a $2B (Careem) valuation can only dream of, however the hustle is strong:

Untappable markets and delays in adaptability: Careem’s valuation has steadily risen over the past five years, while they have ventured into some of the region’s most difficult markets: Palestine, Sudan (embargoed for US companies), Morocco and the ongoing attempt to enter Oman. Their services grew from “cash” (which Uber introduced much later), and “pre-bookings” (Careem’s MVP), to include phone bookings (much needed in emerging markets reliant on feature phones), car seats, motorcycles, last-mile delivery, and even road-side assistance services! 

The strength of Careem has always been in localizing services, so while getting a Careem motorcycle may be a dream-come-true in Lebanon and Pakistan, it’s an unlikely feature in Riyadh and Dubai. All the while, Uber has kept up its offerings with Careem’s at each turn, sometimes even years later, like business accounts, which were a core feature of Careem since day one. 

Response to crisis: A frequent backlash for Uber regionally has been lack of swift response to disaster, where local teams may have not had the autonomy or the swiftness to curtail surge pricing, for e.g. when the Torch Tower went ablaze in Marina, Dubai. Careem’s team immediately cancelled all fares for travelers out of the location. While this is something Uber has acted on much more ethically in the US and EU, the responses in emerging markets have been slow to improve.  

[Careem offers free rides for customers to Al Aqsa Mosque every Friday, during the holy month of Ramadan]


  • Food Delivery – UberEats (Uber’s current prized baby valued at $20B) has launched in Dubai, Riyadh and Jeddah so far in MENA, a long way from market dominance. Careem has acquired Roundmenu to expand it’s offering in that space, with no further comment on the topic since February
  • Payments – Careem has been aggressively hiring CareemPay MD’s in multiple GCC cities, and announced plans to launch the service as early as 2019. Cracking payments (especially P2P) in MENA is the grand race that telecom operators, phone manufacturers and governments have yet to win. Careem’s cross border power has a chance at winning this race at a scale that no regional telecom or gov entity can. 
  • Mass Commute – Public transport infrastructure in Europe and a few US cities may be enviable, however in the emerging market prairies of Egypt, India, Lebanon, Oman and most African countries, it’s an… aspirational dream. But tackling mass transport is a messy business; riders are not necessarily using the smartest phones, and most likely unbanked. Can a developed market company get on the ground to crack this? Careem has no bus service, yet, but has acquired Commut, a Pakistan bus-shuttle service, in September as a first venture into the space. Swvl, Egypt based bus-shuttle service, also announced today a “8 figure investment” to expand their services to East Asia and setup their Germany technology center.

Technology: I agree, whether Careem, Anghami or most other regional services, the final customer experience is sub to that of global products. However I’m not sure the startups are to take the load for this one, technical talent is beyond scarce in MENA, to the extent that Careem (and recently Swvl) have technical teams based in Germany to help fill this gap! Given the size of funding rounds in the region and the cost analysis, it’s a grand move to grow against the odds. 

Giving Back: While an international tech company will rarely if ever invest in regional tech talent, queue FAGM offices in MENA that are stacked with sales guys and barely if any developers (yes you!), regional startups are likely to be the first to jump on the opportunity. Not only Careem, but,, and Hungerstation, to name just a few, forgive me if I have forgotten, have been quite supportive of all developer activities I have conducted in the past. 

Uber, and FAGM companies, I have to say, has been very supportive of entrepreneurs in MENA from a exposure and sponsorship perspective, but, the challenge in the region is neither. We Need Better Technical Talent Yesterday! and with no technical talent in their regional offices big-tech can only help so much.   A small shoutout here to Consensys who even though very new in MENA, started off cultivating a developer community around them immediately. (the blockchain will be led from Asia, but that’s for a different post)

Acquisitions: Uber has been stingy in acquisitions for-market-growth everywhere in the world, their general strategy is to acquire tech companies (or scooters). While that’s a fair strategy, it’s a tough one to play out in emerging markets as Rocket Internet or Zomato can tell you. 
Meanwhile Careem, has made multiple acquisitions and promised to do more. 

“The Acquisition” in Question

Embattled Uber and the year-after-year conversation of its “massive blow” to Careem’s business, and the endless rumors of a looming acquisition. 

The running rumor that Uber is in advanced talks with Careem for an acquisition has been ramping up week by week, and for a good many reasons:

The Public Investment Fund of Saudi Arabia (PIF) is now an investor, directly and through Softbank Vision Fund, in both Careem and Uber, given its bleeding Q3 numbers in lead up to the anticipated IPO in 2019. It would be really tough for late stage investors to make their returns unless Uber makes a massive splash in it’s public offering; their current target is $120B. The continuous competitive price slashing is not to their benefit.

Uber has already bowed down from China and LATAM to curb it’s losses in preparation for the IPO, but the shared investors may be giving them some extra leverage in negotiation with Careem

I saw Mudassir last week at BoostMENA, and according to him, talks with Uber are there, but not at a stage more advanced than conversations with other global leaders like Didi and Ola. So, that’s the founder’s story. 

News is that Careem may also be raising a new round from Chinese investors

An acquisition to Uber may not a bad thing. However, my and the ecosystem’s prayer is: may it not be shorted like the Amazon-Souq deal.

We are at the tip of the iceberg of what a company like Careem or Uber can provide to the global market with such phenomenal reach; and it will be far beyond ride hailing. These technologies are already impact the future of economies, industries and people’s lives. 

I’m in awe of the unifying power technology has had on the MENA region, but in even greater gratefulness to be alive at a time where connecting people has allowed emerging market leaders to challenge the dominance of the long held status quo. 

Can we get scooters like the cool kids now?

Yes, I’m a Careem fan. I use all regional services until they break; that’s my rule. I have had challenges at times with the service, but most have been fixed along the way. No emerging market can surpass one of Silicon Valley’s most coveted-still-private babies without the support of it’s wider ecosystem, so Careem along.