According to Reuters, the Saudi Telecom Board has agreed to buy a 10 percent stake in Middle Eastern ride-hailing app Careem for $100 million. This would value the company at $1 billion if Careem closes this funding round. 

The investment is the latest high-profile Saudi venture since Riyadh in April announced its Vision 2030 plan to diversify the oil-dependent economy and broaden its investment base.

“This move is in line with the company strategy to invest in the innovative digital world,” STC said according to the AFP, adding it would “enhance communication via mobile within the transport system.” 

Careem is a locals favorite and has been battling it out with the well-known US-based ride-hailing app.

Uber is the only ride-hailing app that is seeking to dominate globally.

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Saudi Arabia’s public investment fund, which also holds a 70% stake in STC, invested $3.5 billion in San Francisco-based Uber in June.

This fund raising round seeks to expand Careem’s war chest as it continues to on board more drivers and expand to new markets.

Uber has faced stiff competition around the world

Grab, Southeast Asia’s rival to Uber, raised $750m in equity financing, in September 2016 in an effort 

In China earlier this year Uber called it quits in a battle with the popular local app, Didi Chuxing, swapping its local operations there for a minority stake in the country’s homegrown champion, Didi Chuxing.

The battle continues

Careem raised $60 million last year from investors including buyout firm Abraaj Group to expand in the Middle East, Africa and Asia.

It remains to be seen how the Careem vs Uber battle will play out in Dubai and elsewhere across the region. We’ll be watching closely!