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Management Series: expert-comment

Uber acquires Careem: a milestone deal for the entrepreneurial ecosystem in the Middle East

By Vangelis Souitaris, Professor of Entrepreneurship at Cass Business School.

by Nahda Abdalla (Senior Communications Officer (Dubai))

The deal between Uber and Middle East ride-sharing start-up Careem, marks a milestone moment for the entrepreneurial ecosystem in the Middle East. It shows that the region has both entrepreneurial and technical talent to scale up operations.

Selling to a global player is not a bad path to take for a high-growth, regional start-up such as Careem. It is, in fact, a huge success. The deal will create monetary value for its shareholders which can be reinvested regionally.

As part of this acquisition, Uber is trying to have the founders of Careem involved and give them autonomy. In theory, this strategy gives the highest chances of eventual success.

The key challenges now are:

  • to keep the founders of Careem happy and engaged. In the event they get frustrated, they will exit from management, thus leading to a huge loss for the San Francisco-based firm.
  • however, Uber also needs to take control of what is going on locally – this is a balancing act. At the very least, I would expect that managers at Uber work together with the co-founders of Careem to achieve cultural integration.
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