Careem is in early talks to raise another $500 million in funds, Reuters citing three sources reported yesterday. Earlier this year Bloomberg had reported that the company is in talks with banks for a potential IPO.
Careem’s CEO Muddassir Sheikha, however, denied those rumors, , “IPO is a natural milestone for a rapidly growing business like Careem. However, at this stage, we are fully focused on growing the platform to cover more cities, segments, and use-cases across the region.”
If Careem does go ahead and raise this investment, it would take company’s total investment to over a billion dollar. The company had raised $150 million from different investors last year including Alwaleed bin Talal’s Kingdom Holding and Daimler. It was reportedly valued at $1.2 billion at the time.
The Reuters report citing a source, said, that the “new money raised could go towards new business lines” and the “company may be looking to diversify” before they go public.
Careem has been making some attempts lately at diversifying their business which includes expansion into delivery business across its different markets, and recent acquisition of a restaurant listing platform RoundMenu to expand into food delivery space. Not sure if it counts but they’ve also launched, Dukkan Careem to step into fashion retail.
But it continues to lose money on its core business, ride-hailing. They have been saying that they are targeting profitability for 2018 but with the crazy amount of money it continues to lose, that may not be the case.
They’re paying huge sums of money to its captain for staying online and taking rides during the peak hours to meet the demand in different markets, we have confirmed with different reliable sources.
The fierce competition from their American rival Uber is obviously causing a lot of trouble. They may have announced their exit from Southeast Asia but have no such plans for Middle East, which is obviously not a good news for Careem.
We have reached out to Careem for a comment and will update this story if we hear from them.