Profitability must come before any offering considered, says Careem CEO

The Dubai ride-sharing company Careem is not actively considering an initial public offering as the company is not profitable yet, its chief executive officer Mudassir Sheikha said.

“It’s nowhere on the horizon, we are not actively thinking of it, we are not actively planning for it,” Mr Sheikha said.

“But we are at a scale already where bankers think we should consider it, so once in a while they approach us and say: ‘Hey what are you guys thinking?’

“We take these meetings, but we are not actively pursuing it, we just take the meetings because they want to meet us and we listen to them.”

The company is in early stage talks with banks about listing, Bloomberg reported last week.

Careem, which was founded six years ago, serves 12 million customers in 80 cities ranging from Pakistan to Turkey, Lebanon, Saudi Arabia, Jordan, Egypt and Morocco.

The company raised US$350 million in December 2016 from investors including Japanese e-commerce leader Rakuten and Saudi Telecom, giving it a US$1 billion valuation.

Careem subsequently attracted a $62 million investment from Kingdom Holding, the Saudi publicly listed investment firm of billionaire businessman Prince Alwaleed bin Talal, which took a 7.1 per cent stake in June last year.

In August, Careem struck a strategic partnership with China’s Didi Chuxing, with the Asian giant investing in the Dubai company, which will have access to Didi’s artificial intelligence expertise.

“Our aspiration is to build an independent tech company from the Middle East and if you want to remain independent and you want to pursue the vision that we have, the IPO is a natural milestone, it will happen at some point,” Mr Sheikha said.

He declined to specify how big a stake the company would sell to the public if it makes the decision to list at some stage in the future.

“It’s too early,” he said. “We just raised a large chunk of money so most of the cash is still on hand, we are still in the investment phase.

“We do not make money yet but the business is growing quite handsomely. We are on the business plan that will make money in a couple of years.”

The detention of Prince Alwaleed almost three months ago, amid an investigation launched by Saudi Arabia’s newly established anti-corruption committee, has had no material impact on Careem, Mr Sheikha said.

“It doesn’t change anything on the ground. We are trekking along as we were,” he said.