Middle East ride-hailing app Careem is planning to spend up to $150 million (Dh550m) to launch its food delivery business as early as September, according to two sources with direct knowledge of the matter.
Careem, the main Middle East rival of Uber, has been trialing food delivery services after announcing in February it had acquired regional online restaurant listing platform RoundMenu.
The Dubai-based company is in talks with investors to raise as much as $150m to finance the launch of CareemFood as part of an existing fundraising round, said one of the sources.
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Reuters reported in March that Careem was in early talks to raise as much as $500m from investors.
CareemFood will be launched in Pakistan as soon as September and then in the UAE, Saudi Arabia, other Gulf countries, and Egypt, said a second source.
It will compete against UberEats, Deliveroo, Zomato, and Talabat which already operate in the region.
The sources did not say which investors Careem were in talks with.
Careem’s investors include German carmaker Daimler, China’s largest ride-haling firm DiDi Chuxing, and Saudi Arabian billionaire Prince Alwaleed bin Talal’s Kingdom Holding.
There is strong demand for food delivery in the Middle East, particularly during the summer months in the Gulf where temperatures can soar above 50 degrees Celsius in the summer.
Careem, which says it has 24 million registered users, competes head-to-head with Uber in many major Middle East cities including Dubai, Riyadh, and Cairo.