e& Buys Majority Stake in Uber's Careem Spinout, Boosting Super App Growth

Dubai-based ride-hailing service Careem, a subsidiary of Uber, announced the creation of Careem Technologies, a spinout focused on expanding its super app offering. Abu Dhabi-based tech holding company e& will acquire a 50.03% majority stake in Careem Technologies with a $400 million investment. Uber will continue to have a shareholding in the spinout, while fully owning Careem's ride-hailing business.

Careem Technologies will concentrate on growing the company's super app, which currently offers a multitude of services beyond ride-hailing, such as quick grocery delivery, food delivery, PCR test booking, digital payments and remittances transfers, bicycle rentals, laundry and cleaning services, and event ticket booking. Services owned and operated by Careem will transition to Careem Technologies, while third-party services like laundry service Washmen or events marketplace Tikety will remain under the operation of their respective partners.

The deal allows Careem to raise funds for its super app expansion across the Middle East, North Africa, and South Asia, while also bolstering e&'s consumer digital services in the region. Careem co-founders Mudassir Sheikha, Magnus Olsson, and Abdullah Elyas will join e& and Uber as shareholders in the new entity.

e&, formerly known as Etisalat, is shifting its focus from being a telecommunications company to a global technology investor. The majority state-owned telco company rebranded as e& in June last year and embarked on a new strategy to position itself as a global technology and investment conglomerate. e& CEO Hatem Dowidar emphasized the need for telcos like Etisalat to move beyond the traditional telco model and progress up the value chain.

The investment in Careem Technologies aligns with e&'s ambition to scale its consumer digital offerings. Careem expects to benefit significantly from synergies with e& and anticipates leveraging e&'s vast customer base and experience in scaling tech businesses across the shared geographic area.

Uber CEO Dara Khosrowshahi expressed excitement over the partnership with Careem and e& in growing the Careem super app to provide more services to millions of people in the fast-paced region. With nearly half a billion dollar investment from e& and ongoing support from Uber, Careem is optimistic about the future growth of its super app objectives.

The transaction, which will be financed from e&'s existing cash balance, is subject to regulatory approvals, customary closing conditions, and administrative procedures.