The company signed a binding agreement with Uber for a 50.03 per cent stake in Careem’s Super App business, e& said in a statement to the Abu Dhabi Securities Exchange, where its shares are traded.
Careem’s ride-hailing business will remain fully owned by Uber and continue to be available with all other services on the existing app for customers, the companies said on Monday.
The Careem Super App offers more than a dozen services, including food and grocery delivery, micromobility, a digital wallet and suite of FinTech services, and additional third-party services such as home cleaning, car rental and laundry.
It will continue to be managed by its co-founders Mudassir Sheikha and Magnus Olsson, e& said.
“Super apps have catalysed the economic, social and cultural growth of emerging markets today,” said Hatem Dowidar, group chief executive of e&.
“The Careem Super App, is a digital native that has built a rapidly growing payments, food and grocery delivery network, and a platform for other digital businesses to scale from.
“The shared vision between e& and Careem is exciting, we believe that together we’ll be able to enhance our impact across different markets in the region while pushing the boundaries of customer experience.”
The transaction cost will be financed from existing cash balance, e& said.
“Despite the immediate financial impact ... it provides important opportunity for revenue growth and diversification over the long term,” the company said.
Uber announced plans to acquire Careem in 2019 for $3.1 billion.
The deal allowed the company to continue to operate independently, with chief executive Mr Sheikha saying at the time that he would stay with Careem as it reaches for “decacorn” status — a company valued at $10 billion.
The Careem Super App was unveiled in April 2020 to expand the company's offerings. It has operations in more than 80 cities, covering nine countries across the Middle East, Africa and South Asia.
Abu Dhabi-based e& is expanding its presence and has been on acquisition spree.
This year, e& increased its stake in Vodafone Group to 14 per cent as it continues to consolidate its shareholding in the British company as part of its international expansion plans.
Its latest investment will accelerate the development of the company and support the creation of a regional Super App champion, it said in the bourse statement.
The deal is “in line with e&’s strategic ambition of scaling up consumer digital offerings and accelerating e&’s transformation to a global technology group”, it said.
“It would also provide e& with access to multiple digital verticals, to strong talent and capabilities, and to new geographies. e& will leverage the Careem Super App to boost the growth of its consumer digital services, including expediting the expansion of e& money across a wider footprint.”
The deal is subject to regulatory approvals, customary closing conditions and administrative procedures.
Super apps, which bundle single apps' functionalities on to one platform for many different services, have been gaining increasing investor interest in the Middle East.
Astra Tech, the Dubai-based technology-focused investment firm backed by Abu Dhabi's G42, in January said it acquired popular Middle East internet calling platform Botim as it prepares to launch an “ultra app” to serve a variety of consumer needs.
Last year, Algerian technology start-up Yassir, a super app that provides its users with on-demand services, raised $150 million in a funding round as the company aims to expand its operations and further strengthen its core technology.
The investment round was led by Bond, with participation from other investors including DN Capital, Dorsal Capital, Quiet Capital, Stanford Alumni Ventures, Y Combinator and a host of strategic investors.