Careem vs. the Ride-Hailing Goliath: Abraaj Journeys Further Into the Tech-enabled Consumer Space

Careem, a Dubai-based ride-hailing company, was founded in 2012 in the United Arab Emirates (UAE) by two ex-McKinsey consultants who saw a gap in the transport market. Started as a web-based car booking service for corporate clients, Careem had evolved into a leading application-based booking service in the Middle East and North Africa (MENA) region, with a differentiated business model tailored to the tastes and preferences of Middle Eastern consumers. Fuelled by venture capital funding rounds in September 2013 and December 2014, Careem was again on the fundraising trail in 2015 for a Series C investment round to further scale its existing business and continue its roll-out across MENA. The Abraaj Group, a leading emerging markets private equity investor, was interested, but with Uber competing fiercely in the MENA region, it had to decide whether Careem could compete with its well-funded global competitor.

This case helps students understand: • The evolution of a successful start-up, from concept to funding to scaling. • The challenges faced by operators of early-stage companies and the key questions and metrics considered by investors in early-stage companies. • The convergence of traditional venture capital and private equity roles in the late-stage venture capital market. • How private equity investors add value to their portfolio companies and differentiate themselves in the market. • How global business models in the “new economy” can be modified and refined to suit consumer preferences and provide a competitive advantage in emerging markets.