Dubai's ride-hailing app Careem secured $200 million (Dh735m) in a new round of funding from existing investors including Saudi Arabia's Prince Alwaleed bin Talal's Kingdom Holding to spur its regional expansion.
The investment is the first close of a round that is expected to raise more than $500m, Careem said on Thursday. The initial $200m funding takes the company's valuation to approximately $2 billion, a source familiar with the deal told The National.
"Internet-enabled services are having a profound and positive impact on our region, where the consumer internet opportunity is huge and untapped," said Careem chief executive Mudassir Sheikha. "Careem is uniquely positioned to tap into this opportunity by expanding into new verticals."
The new funding comes as Careem is in talks with its rival global ride-sharing giant Uber about a potential tie-up that could see the San Francisco company acquire Careem although no final decision has been made, sources told The National last month.
The $200m was raised from existing investors including Japanese e-commerce firm Rakuten, Saudi Arabia's Al Tayyar Group and Saudi Technology Ventures, a VC in which Saudi Telecom Company is an anchor investor.
Kingdom Holding, which has a 7 per cent stake in Careem, is one of the largest investors in Careem.
"The investment in Careem is a continuation of the company’s strategy to invest in new promising technologies," the Saudi investment vehicle said in a separate statement on its website on Thursday.
Careem counts among its global investors the Chinese ride-hailer and technology conglomerate Didi Chuxing as well as German car maker Daimler.
Founded six years ago, the company is increasingly diversifying its operations with forays into package and food deliveries, mass transportation and payments. To that end, it has acquired Dubai restaurant listing start-up Roundmenu in February, purchased Indian bus shuttle service app Commut in September and rolled out mass transport services in Egypt, the Arab world's most populous country.
Careem serves 30 million registered users in more than 120 cities in 15 countries across the Middle East, North Africa, Pakistan and Turkey.
The company sees potential for growth in more than 250 new cities across the Mena as it seeks to become profitable by 2020, Mr Sheikha told The National in January. It is looking to scale its presence in existing markets such as Egypt, Pakistan and Saudi Arabia by serving second or third-tier cities in those countries and enter new markets such as Oman, Algeria and Tunisia.
Careem's competitor Uber is planning an initial public offering in 2019 and may be valued at $120bn, according to the Wall Street Journal.
Careem was founded in Dubai by former McKinsey consultants Magnus Olsson and Mr Sheikha. A third co-founder, Abdulla Elyas, joined later when Careem acquired Jeddah-based address coding service Enwani in 2014.