Didi Chuxing expands in Middle East, North Africa through pact with ride-hailing partner Careem
Alliance and technology cooperation expected to support economic development initiatives across the oil-rich region
Didi Chuxing, operator of the world’s largest ride-hailing services platform, is accelerating its global expansion with an ambitious foray into the Middle East and North Africa region.
That development is being made possible by a strategic partnership between Didi Chuxing and Dubai-based ride-hailing start-up Careem Networks.
The mainland Chinese company also invested an undisclosed amount in privately held Careem, which had a valuation of more than US$1 billion as of June this year.
“Growing urban population, and economic and social diversity in the Middle East and North Africa region present enormous opportunities for the ride-hailing economy,” Didi Chuxing chief executive Cheng Wei said in a joint statement on Tuesday.
The Middle East and North Africa region, which comprise about 21 countries and accounts for 60 per cent of the world’s oil reserves, is forecast to record a 3.1 per cent growth this year after slowing to 2.7 per cent last year, according to the World Bank.
Founded in July 2012, Careem currently caters to more than 12 million customers in about 80 cities across that region. Users can book a car on the Careem app and website, or by calling its call centre.
“Didi Chuxing brings leading edge artificial intelligence capabilities, insight and expertise to our organisation as we enter our next phase of growth,” said Mudassir Sheikha, the co-founder and chief executive of Careem.
Sheikha said the investment made by Didi Chuxing in Careem shows “the significant regional opportunity to leapfrog traditional infrastructure and improve the lives of people in our communities”.
The Middle East and North Africa region is brimming with potential amid political uncertainty, according to the International Finance Corp (IFC), the private sector arm of the World Bank Group.
The IFC pointed out that longstanding problems like power shortages, youth unemployment and a lack of access to finance have conspired to hold back economic growth in the region of about 350 million people.
Under their alliance, Didi Chuxing and Careem aim to collaborate on intelligent transportation technology, product development and operations.
“Careem is the region’s technology and market leader [in ride-hailing services],” Cheng said. “We look to support continued growth and transformation of the region’s transportation industry, tap into the significant potential of the local internet economy and foster more innovative services.”
Didi Chuxing, which acquired Uber’s China business last year, serves more than 400 million users on the Chinese mainland. The company has widened its international reach through strategic alliances and investments in other major ride-hailing service operators.
Last month, Didi Chuxing teamed up with Japanese conglomerate SoftBank Group Corp to invest up to US$2 billion in Southeast Asian transport provider Grab, which raised a total of US$2.5 billion in its latest financing round.
Headquartered in Beijing, Didi closed a massive funding round worth more than US$5.5 billion in April that raised its valuation to about US$50 billion, up from US$34 billion when it bought Uber’s mainland business. The company now ranks as the world’s most valuable start-up behind Uber.