Dubai’s Udrive secures $5m to grow technology capabilities and expand in region

The car-sharing app attracted investment from Cultiv8 and Oman Holding International

Udrive will use the newly raised funds to streamline customer experiences. Pawan Singh / The National

Dubai-based pay-per-minute car rental platform Udrive raised $5 million as it seeks to expand its services across the Mena region and Turkey.

Cultiv8, Dubai government’s SME and start-up investment arm, and Oman Holding International (OHI) participated in the company's latest funding round, Udrive said on Monday.

“The recent funding secured will help us invest in new technologies as well as grow our offerings into the region this year,” said Nicholas Watson, chief executive and co-founder of Udrive.

“Raising money was never about just the funds, but our ability to operate at scale and bring true change to old incumbent business models. We started this concept in the UAE and are now continuing our expansion across the region.”

Car-sharing apps that allow customers to rent a vehicle by the hour, or even the minute, have been growing in popularity. The pay-by-use model helps drivers to save on insurance and maintenance costs, and car loan repayments.

More consumers are now open to vehicle subscription services, according to a 2020 survey of car industry executives conducted by management consultancy McKinsey.

The number of car-sharing users is expected to reach 60.7 million by 2026, according to Statista.

Udrive will use the proceeds to expand in the region and enhance its technology, the start-up said, while also focusing on streamlining customer experiences.

Founded in January 2017 in Dubai, Sharjah and Abu Dhabi, Udrive was in the midst of its series A funding round when the coronavirus pandemic struck, bringing its funding to a standstill, its founder said in February last year.

The company later secured $2.5m in a seed+ round in 2020 before raising $1.3m through Eureeca, the Dubai-based equity crowdfunding platform, in January last year.

After closing its $5m funding round in 2021, the company’s valuation hit $20m, Mr Watson said.

Udrive has clocked two million trips to date, making it one of the largest rental booking platforms by transactions per car in the region, the company said.

“Mobility tech is one of the key investment sectors our technology fund focuses on and Udrive perfectly fits the fund’s guidelines,” said Arif Alawi, chief executive of Cultiv8, a growth stage, tech-focused investment management company.

Cultiv8 is wholly owned by the Mohammed bin Rashid Fund for SMEs and is regulated by the Dubai Financial Services Authority.

Muscat-based OHI's investment will support Udrive’s target to double its annual revenue target and vehicle fleet, the start-up said.

“We can expect to see radical shifts in how cars will be used both globally and regionally,” said Eihab Saleh, director and chief executive of OHI.

“We are confident that their [Udrive's] product road map is expected to significantly change the way cars are utilised in the Menat region.”