New era of business valuation in the Middle East

On March 26, Careem customers received an e-mail from the company’s CEO and co-founder Mudassir Sheikha, marking that date as the starting day of chapter two in Careem’s story of joining forces with Uber.

In light of the absence of detailed information on the transaction, the first impression of the acquisition was that both companies will merge commercially, putting an end to Careem as a brand and leaving Uber as the sole player and dominating brand in the innovative transportation market in the Middle East. However, the new owners of Careem have a different plan in keeping both companies independent and prolonging the life of Careem as a transportation brand in the market, under the leadership of co-founder and current CEO Mudassir Sheikha.

Careem was founded in 2012 as a start-up company with a clear objective to make a difference in the transportation infrastructure in the UAE as a starting point, expanding its operation to other counties in the Middle East. Careem has been sold for $3.1 billion, marking a new era of business valuation model in particular in this part of the world in light of the fact that geography in business valuation matters, as the characteristics of each country affect the environment in which valuation experts are called upon to perform their estimations.

After seven years of successful operation, Careem owners have decided to land on lucrative ground, ending their capacity as shareholders of Careem and handing its commercial story over to Uber to build on the success achieved during the first chapter of Careem’s narrative. It is anticipated that the next phase of Careem will introduce innovative and more added value services to its customers, in particular on the technology side of Careem’s operation and customer service platform.

According to Uber, the acquisition is subject to regulatory approval in various countries, which Uber do not expect before the first quarter of 2020. Until then, nothing changes.

Dubai is celebrating Uber’s acquisition of Careem as its second largest private equity transaction after Souq.com and promoting itself as a geography where business investments and private equity investors will be paid off.

The writer is an attorney and counselor-at-law. He contributed this article to The Jordan Times