Uber is reportedly in 'advanced talks' to buy its biggest rival in the Middle East for $3 billion
Uber is in "advanced talks" to buy Careem, a ride-hailing company in the Middle East, Bloomberg reported Tuesday.
In an interview last week, Careem's CEO seemed to hint that an acquisition was not in the cards.
Still, given the unique challenges of the Middle East, a buyout could make sense for Uber.
Uber is in "advanced talks" to buy its largest Middle Eastern competitor, Careem, Bloomberg News reported Thursday.
The deal could value Careem at $3 billion, sources tell Bloomberg, which is higher than the company's latest valuation of about $2 billion in private fundraising.
Both Uber and Careem declined to issue a comment to Business Insider regarding the Bloomberg report. However, Careem CEO Mudassir Sheikha seemed to rule out an acquisition in an interview last week.
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"We've only addressed 1 to 2% of our addressable market," the founder said by phone from Dubai. "We're still very early in the opportunity.
"We are continuing to fundraise," he continued. "We have enough cash on hand to fund our business plan, but our ambition keeps on getting bigger so we are getting into more things than initially anticipated."
Sheikha also said that it would be hard for a global competitor like Uber to successfully compete in such a unique market, like the Middle East. In that view, at least, the purchase could make sense for Uber.
"For a global competitor to come in and start providing a service to the top 2-3 percent of the population is not difficult — they're used to the convenience," said Sheikha. "But as soon as you start going down the masses, you require a lot of tailoring"
You can read his full interview with Business Insider here.
