Uber-owned ride-hailing giant Careem has announced the launch of a new spinout, named Careem Mobility Solutions (CMS), with a whopping $400 million investment from the United Arab Emirates (UAE) tech holding company, Abu Dhabi-based Crescent Enterprises.
The new entity is set to take over Careem’s mass transportation, payments, and delivery businesses, which had become integral parts of the company’s operations in the Middle East and North Africa (MENA) region. The move is seen as part of Careem’s long-term strategy to shift towards more profitable and sustainable revenue streams.
In a statement, CMS CEO Mudassir Sheikha said that the new company would “pioneer new ways of getting people and things around cities, building on the success of Careem’s ride-hailing business while adding new verticals such as mass transportation and payments.”
He added that “Crescent Enterprises’ investment will help us accelerate our growth and achieve our goal of becoming the leading mobility and payments platform in the region.”
For Crescent Enterprises, the investment represents an opportunity to tap into the rapidly growing mobility and logistics sector in the MENA region. The company’s CEO, Badr Jafar, said that the investment would “support the growth and expansion of a regional champion with a proven track record of innovation and market leadership.”
Careem’s spinout comes at a time when the company is facing increased competition from global players such as Uber and Bolt, as well as local rivals like Dubai-based ride-hailing firm, Careem’s biggest competitor in the region, and Saudi-based startup, Nejree.
However, Careem has managed to maintain its position as a dominant player in the MENA ride-hailing market, thanks to its focus on providing localized services and adapting to the unique challenges of the region’s urban environments.
With the launch of CMS, the company is looking to expand its reach beyond ride-hailing and into the wider mobility and logistics space. The new entity will incorporate Careem’s existing mass transportation and payments businesses, which have already gained significant traction in the region.
CMS will also look to leverage Careem’s extensive data and technology infrastructure to develop new products and services that cater to the evolving needs of urban commuters and businesses in the region.
The launch of the spinout is part of a wider trend in the global ride-hailing industry, where companies are looking to diversify their revenue streams and expand into adjacent markets such as food delivery and logistics.
For Careem, the move is seen as part of a broader strategy to achieve profitability and sustainable growth, following years of heavy investment in the company’s ride-hailing operations.
The company’s CEO, Mudassir Sheikha, recently stated that Careem was on track to achieve profitability by 2023, thanks to a combination of cost-cutting measures and revenue diversification.
The launch of CMS is expected to play a significant role in achieving this goal, as the new entity looks to tap into the booming mobility and logistics sector in the MENA region, which is projected to reach a market size of $60 billion by 2025.
Overall, the launch of Careem Mobility Solutions represents a major milestone for the ride-hailing giant, as it looks to establish itself as a leading player in the wider mobility and logistics space in the MENA region.
With a $400 million investment from Crescent Enterprises, the new spinout has the financial backing and strategic support needed to realize its ambitious growth plans and capitalize on the huge potential of the region’s burgeoning mobility and logistics market.