MAGNiTT Founder & CEO Philip Bahoshy shares thoughts on Careem's acquisition by Uber
Read the full press release HERE
Philip Bahoshy, CEO and founder of MAGNiTT, shares his thoughts on the recent unicorn exit of Careem, which sold to US-based Uber for $3.1 billion – the first unicorn exit in the Arab region:
“So, it has finally been confirmed – the worst kept secret across the start-up ecosystem, that Careem was going to be acquired by Uber. This is a momentous occasion and one that I think everyone should take stock from. Having founded MAGNiTT over 4 years ago, Careem, along with Souq, has been a role model and reference of success in the region. This yardstick completes the journey with many positives for the ecosystem, which we all should applaud. Below are a few thoughts I wanted to share:
Founders
First and foremost, I want to congratulate Careem’s founders, Mudassir and Magnus. If you haven’t read the book Startup Arabia by Amir Heghazi, you should. Through the book, you will learn about the origins of their journey, and like any startup journey, it wasn’t an easy one. Their continued pursuit of growth and scale ultimately provided them the platform for acquisition. Sometimes people forget how much of a hustle it is to be a founder, so I would like to credit the founders for achieving this momentous goal!
Investors
Below, we chart the progression of the financial journey of Careem and their investors. The acquisition is a big success for regional investors, who invested early in Careem’s journey, seeing the potential the start-up had. This is vindication of their conviction in Careem, but, most importantly, provides a return to their funds and LPs. Moreover, it provides a much-needed success story and liquidity to the regional start-up ecosystem.
LPs
At all the conferences where we have been present, there has been a lot of talk around exits. In some cases, it was almost an obsession, but it shows that the region is still waiting to see how this particular asset class will create returns.
Well, now you have it. As family offices, VCs, CVCs, financial institutions and angel investors start looking at start-ups and ventures as an asset class, we are seeing the fruits of previous pioneering investors’ hard work.
Not only that, we expect there to be an acceleration of exits as the ecosystem matures. Looking back historically, I believe that the acquisition of Careem can be categorised as the 3rd wave of exits.
1. Yahoo’s acquisition of Maktoob in 2009 and Thomson Reuters’ acquistion of Zawya for in 2012
2. Amazon’s acquisition of Souq for $580 million in 2017
3. Uber’s acquisition of Careem for $3.1 billion in 2019
This makes you wonder, who is next?
Employees
Not to forget, congratulations to everyone working at Careem!
We finally have a PayPal Mafia phenomenon that can create trickle-down effects. You have early employees who get a pay-off from the shares that they earned, in addition to having an exit on their CV that can justify higher valuations when speaking to investors, given their own success. Some might even set up funds to give back, a phenomenon that we see all across the world. However, most importantly, they can give back with their know-how by lobbying governments for change and educating future investors on what to look for. You all deserve a huge round of applause. (edited)
Governments
Lastly, but certainly not least, congratulations to all regional governments as well. This is a success for the region. One of the key characteristics of Careem’s success has been its regional expansion, which would not have been possible without the scalability. While the road was rocky, Careem worked hard with regulators to provide the opportunity of choice to consumers, which has been game-changing across the region. I, an ex-consultant who used to struggle to get taxis when travelling the region (the original pain point Careem solved for), have now been provided access to a service that solves this exact problem. Most importantly, you can highlight Careem’s success story for future investors to come to the region, larger start-ups to gain access to the market and employment opportunities for growing companies.
It has been fascinating covering the Careem journey. I have personally found conversations with the founders inspiring and wish them all the best in the post-acquisition era. But first, I hope they enjoy a well-earned break!”
Read the full press release HERE