Uber’s $3.1 billion acquisition of Careem will encourage Middle East entrepreneurs to “think locally” to solve hyper-local needs that can then be replicated in other markets, according to Abdulrahman Tarabzouni, the CEO of venture capital fund STV.
STV, which is backed by Saudi Telecom Co, was an investor in Careem in its $200 million Series F investment round in 2018.
In an interview with Arabian Business, Tarabzouni said that he believes the Uber-Careem deal “reflects the kind of potential that the region has.”
“Founders and companies tend to forget that a lot of these global giants just started being super focused on tightly defined pain points that are local in nature and narrow in scope,” he said. “That’s what we love to see in companies here, someone who has global aspirations and wants to go big…but starts with a very well defined user need that they are solving.”
In the future, he said he believes that these business models – which start locally before expanding outward – are the most likely to experience success similar to Careem’s.
“They can take lessons from the Careem playbook and solve user needs,” he added. “They need to showcase that they can solve [a problem] within an X mile radius of wherever, but can easily replicate it and scale it if the model works out.”
Tarabzouni added that he believes there will be a “trickle down” effect from the deal as people as entrepreneurs and investors are inspired.
“You’re going to probably start seeing a Careem effect of people leaving and wanting to do the next big thing,” he said. “It’s the nature of the beast. You need people who have a few notches in their belt…to be able to raise money and have validation to take to investors.”
“There’s a virtuous cycle that this Careem deal will give a lot of fuel to,” he added.For all the latest business news from the UAE and Gulf countries, follow us on Twitter and Linkedin, like us on Facebook and subscribe to our YouTube page, which is updated daily.
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