© Reuters. FILE PHOTO: A customer enters one of Careem cars in Mosul, Iraq September 25, 2019. Picture taken September 25, 2019. REUTERS/Abdullah Rashid
By Lisa Barrington and Hadeel Al Sayegh
DUBAI (Reuters) -Uber Technologies’ Middle East subsidiary Careem is in advanced talks with Emirates Telecommunications Group Company to invest in its expansion into services beyond ride-hailing, five sources with knowledge of the matter told Reuters.
Careem began seeking outside investors last year to help finance its Super App, which offers services outside its core ride-hailing business such as food delivery, bike rentals, digital payments and courier services.
Careem’s discussions with the company, formerly known as Etisalat Group and now called e&, are at an advanced stage and a deal could be announced soon, said the sources, declining to be named because the matter is not public.
Careem and e& did not immediately respond to requests for comment when contacted by Reuters on Tuesday.
It was not immediately clear how much Careem would raise from e&, or whether other investors would also come on board, however one of the sources said the ride-hailing firm has set up a separate entity to structure the deal.
While Uber (NYSE:) owns Careem’s app and its around 50 million registered users, the newly-created investment vehicle will have a service level agreement with the app and its solutions, the source said.
Uber bought its Dubai-headquartered rival Careem, which operates predominantly in the Middle East, for $3.1 billion in 2019 in a watershed moment for technology firms in the UAE and the region, keeping the brand and app intact.
Careem’s co-founder and Chief Executive Mudassir Sheikha, a former McKinsey executive, has long been a proponent of the Super App strategy to expand beyond ride-hailing.
Uber, which shut down its Uber Eats operations in the Middle East in 2020, is focused on ride-hailing in the UAE.
Uber’s 2019 acquisition of Careem gave the U.S. company market dominance across the Middle East and Pakistan ahead of its initial public offering in the same year that raised $8.1 billion from investors and valued the company at $82.4 billion.