Uber has announced that it has acquired its Dubai-based rival Careem for $3.1bn in an effort to corner the Middle Eastern market as it inches closer toward its highly-anticipated initial public offering (IPO), predicted to be one of the biggest ever, valuing the company at as much as $120bn.
Founded in 2012, Careem has more than 30 million registered users and provides car-hailing services in 120 cities in North Africa, the Middle East and South Asia.
According to Uber CEO Dara Khosrowshahi, Careem has "played a key role in shaping the future of urban mobility across the Middle East, becoming one of the most successful startups in the region".
Careem and Uber will continue to operate as two independent brands, however Khosrowshahi stated that the new deal will "deliver exceptional outcomes for riders, drivers, and cities, in this fast-moving part of the world".
Careem co-founder and CEO Mudassir Sheikha will continue to lead the Careem business.
The acquisition remains subject to regulatory approval but is expected to close in the first quarter of 2020 and consists of $1.7bn in convertible notes and $1.4bn in cash.
Uber has made several acquisitions so far in the build up toward its IPO as it tries to prove that, despite the fact it is unprofitable, booking a $1.8bn loss in 2018, it will move away from a sole focus on taxi-hailing become the global leader in transportation and logistics. Its last high-profile acquisition was of US bike-sharing company Jump.
The race to IPO has become especially tense in the last few months, with Uber's main competitor Lyft announcing plans to go public as soon as possible. Lyft claims 39% of the US market despite revealing it lost $911m on $2.2bn in revenue last year.