When you think of hot spots for tech startups, the Middle East is probably not the first place that springs to mind. The region has struggled with instability as well as high youth unemployment. But where some see challenges, others see opportunities. Careem is a Dubai-based ride-hailing company founded in 2012 and its growth has been explosive – now operating in nearly 60 cities across the region.
The idea behind Careem is simple: give users access to safe, reliable rides, either summoning them on the go or booking them in advance. Users can pay with cash, credit or loyalty points. It may not be flashy, but so far, their focus on safety, reliability and customer satisfaction has resulted in remarkable success. The company now claims close to 8 million users and recently closed a $350 million funding round, part of a $500 million package to fuel its expansion. The funding round was led by Rakuten as well as Saudi Telecom.
“We’re hoping to build a public transportation system for a region of 700 million people,” says Careem CEO Musassir Sheikha.
“The Middle East is very poor in infrastructure and didn’t build the public transportation systems that Europe and the U.S. built hundreds of years ago,” said co-founder and CEO Musassir Sheikha. “Ride hailing is basically the only alternative for many people in the Middle East. With the money that we’re raising, we’re hoping to build a public transportation system for a region of 700 million people.”
Sheikha and fellow co-founder Magnus Olsson got their idea when they were consultants at McKinsey & Company in Dubai. They often traveled the region and struggled with unreliable, inconvenient transport.
“We studied the market and understood this was a big opportunity and also something we could build a meaningful business out of, in the sense that we could impact the lives of people through this platform,” Sheikha said.
Access to talent and capital were early challenges. Highly skilled workers in the region tend to prefer to work for global brands, and much Middle Eastern investment capital is directed abroad instead of inward. Sheikha and Olsson did a lot of persuading and managed to bring in early local backers such as Saudi Telecom.
Careem soon became one of the largest indirect employers in the region and it is gradually changing lives. It already has some 200,000 drivers and recently signed an agreement to create 100,000 jobs in Pakistan by the end of 2017. Known as “captains” in company parlance, drivers often lease their cars and many establish creditworthiness for the first time through the job, according to Sheikha.
“We’ve made a big impact in terms of the ability of full-time captains to make a reliable income,” said Sheikha. “One captain told me he started with one car on loan and today he owns three cars and has people working for him. He was telling me how many families in Pakistan, where he came from, are being supported by working with Careem in Dubai.”
Women in Pakistan and Egypt are becoming captains, too, while others are benefiting from better access to mobility through the service. Instead of depending on male relatives to take them out, women in Saudi Arabia can now tap Careem.
“Now they decide when they want to go out and they’re empowered to do the things they want to do in life,” Sheikha said. “They now talk about a pre-Careem Saudi and a post-Careem Saudi.”
Careem shows no signs of slowing down. It’s been growing 20% to 30% monthly and doubles in size every three to four months. It’s now focused on bringing the service to about 140 other cities in the Middle East and possibly entering the logistics industry.
“We’re quite focused on the region and would love to figure out how to get more and more of it using the service – and benefiting from the efficiencies,” Sheikha said.
Read more reports on NEST 2017 here.