The ride hailing industry is heating up as Careem announced that it has raised $150 million to close its Series E financing at $500 million. The latest funding has been raised from Daimler AG (a German automobile company), Kingdom Holding Company (a Saudi conglomerate holding company), Coatue Management, and DCM Ventures. The Series E funding round was led by Rakuten who took part in the $350 million tranche that Careem raised in December.
According to co-founder and CEO of Careem, Mudassir Sheikha, the latest funding round also took the company’s valuation past $1 billion. This is a significant increase in funding as the ride hailing company had only raised $72 million in previous funding rounds. With the arrival of Daimler AG, Coatue and DCM as investors, Careem now has a wide range of investors with some of them participating for the first time.
“With our investment in Careem, we are now taking the strategic step to becoming the world’s leading provider of mobility services,” Klaus Entenmann, CEO, Daimler Financial Services AG said in a statement. He added that “Careem has quickly leapt to the leadership of ridesharing within the MENA regions by delivering rapid innovation and customer growth, and it is spearheading new ways to transport people from point A to point B.”
|June, 2017||$150 Million|
|December, 2016||$350 Million|
|November, 2015||$60 Million|
|December, 2014||$10 Million|
|September, 2013||$1.7 Million|
The funding will help Careem to strengthen its footsteps in the Middle East region and Sheikha believes that this region has a lot of potential. The ride hailing app has grown at a rapid pace as it now has about 250,000 drivers and 10 million riders in 80 cities of 13 countries. Back in December 2016, the company only had 150,000 drivers in less than 50 cities.
Careem mainly operates in emerging markets and this is a major problem for the company as in these markets people don’t use debit or credit cards and hence most of the transactions are done through cash. Therefore, the company has to make changes accordingly to ensure transparency in all transactions.
Managing Director of Careem, Magnus Olsson, has said that the ride hailing services like Careem or Uber are only utilizing 1% of the opportunities available in the transportation industry.
Currently, Uber is engulfed in turmoil and its CEO, Travis Kalanick, has taken indefinite leave of absence and left the company in hands of a group of 14 executives. Experts believe that Uber’s crisis presents a great opportunity for Careem to use its new funding to take on Uber.