Alpha Venture Partners to make 3x on Careem

Alpha Venture Partners is tripling its investment in Careem, a source said.

Uber said March 26 it was buying Careem, the biggest ride-hailing app in the Middle East, for $3.1 billion. The deal includes $1.7 billion in convertible notes and $1.4 billion in cash. The transaction is expected to close in first quarter 2020.

Founded in 2012, Careem, of Dubai, has 33 million users in 120 cities spread across 15 countries. Careem has been in on-and-off talks with Uber for more than nine months, Reuters said. The sale comes as Uber is expected to kick off its IPO next month and is seen receiving a valuation of at least $100 billion, the story said.

Careem has raised $774 million in funding, PitchBook said. Investors include Rakuten, Saudi Technology Ventures, Didi Chuxing, Beco Capital, Wanda Capital and DCM Ventures, PitchBook said.

Alpha Venture Partners, of New York, invested in Careem in December 2016, the source said. The VC is making 3x its money with the sale to Uber, the person said. Alpha Venture typically invests in growth or expansion stage rounds; companies usually have north of $20 million in revenue, the firm’s website said. Current investments include Lime, Doctor on Demand, wish and Getaround.

Careem — which means kindness in Arabic — enabled parity for women’s transportation in the Middle East, said Brian Smiga, Alpha Venture’s co-founding partner. Careem is the largest trainer of female drivers in the Middle East and North Africa, he said.

“Our exit in Careem is a solid win for Beco Capital, a 2015 investor, with whom we sourced the 2016 opportunity, and Alpha Venture Partners, which provides growth opportunity capital as a co-investor to early stage, expert funds like Beco,” Smiga said.

Careem’s sale to Uber is the largest tech sector transaction in the Middle East so far, eclipsing Amazon’s $580 million buy of Souq in 2017, according to press reports.

Careem declined comment.

Action Item: For more information, read Careem CEO Mudassir Sheikha’s letter to employees about the sale to Uber here.