Uber Technologies Inc is set to announce a $3.1 billion cash-and-share deal to acquire its Dubai-based Careem Networks FZ as early as this week, according to people with knowledge of the matter.
The US ride-hailing giant will pay $1.4 billion in cash and $1.7 billion in convertible notes for Careem, the people said, asking not to identified because the talks are private. The notes will be convertible into Uber shares at a price equal to $55 per share, according to term-sheet seen by Bloomberg.
Careem was valued at about $1 billion in a late 2016 funding round, making it one of the most valuable technology startups in the Middle East at the time. Its backers also include STV, the venture capital arm of Saudi Telecom Co, Al Tayyar Travel Group Holding Co, and Daimler AG.
Careem has expanded rapidly over the past few years, now having over a million drivers and operating in more than 90 cities in 15 countries, according to its website. It has also branched out into food and package deliveries, bus services, scheduled rides and credit transfers — in several instances launching services ahead of Uber.
The acquisition will come as a welcome boost for the Middle East’s nascent technology startup market and follows Amazon.com Inc.’s acquisition of Dubai-based online retailer Souq.com for $580 million in 2017. With Arab governments seeking to diversify their oil-based economies, young and tech-savvy entreprene-
urs are starting new businesses and getting investors to back them.