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Photo: Rizwan Tabassum/AFP/Getty Images

Uber's $3.1 billion acquisition of Dubai-based Careem is its largest to date, and the second tech acquisition over $500 million in the Middle East by a U.S. tech giant.

Why it matters: U.S. tech leaders are eyeing investments in the Middle Eastern startup community as a way to achieve rapid scale in a large, young and increasingly affluent market.

By the numbers: Demographic changes have made the Middle East an attractive tech market, especially for transportation delivery services.

The impact: There is rising customer demand for safe, clean, and reliable mobility and delivery. The Uber-Careem deal follows Amazon's purchase of local e-commerce rival, Souq, in 2017.

  • Careem was Uber's largest rival, with over 30 million registered users for their ridesharing, motorbikes and delivery services across 15 countries and 120 cities, from Saudi Arabia to Pakistan.
  • Other local transportation startup players include mini-buses service Swvl in Egypt, package delivery Fetchr based in Dubai, freight and truck matching platforms Trukker and Load-Me also in Dubai, and limousine booker Ousta in Egypt.

Between the lines: Careem and mobility leaders like Grab and Gojek in Southeast Asia have proven that there's value in investing in local startups that have already achieved scale and cultivated an understanding of local regulatory hurdles, market sensitive products, and last mile complexity.

  • Indeed, Uber recently decided to invest in Grab rather than compete on its own in that region.

The bottom line: For tech giants, betting on local players can be the relatively safe strategy, compared to broaching each country's market on their own, especially in a region with infrastructure challenges and political instability. With Uber's impending IPO, the Careem acquisition confirms that it is pursuing aggressive international growth, unlike Lyft’s domestic focus.

Christopher M. Schroeder is a tech investor, consultant, and author of "Startup Rising: The Entrepreneurial Revolution Remaking the Middle East."  He advised two venture capital firms who invested in Careem.

Go deeper

Texas Republicans pass new congressional maps in their favor

Photo: Matthew Busch/Bloomberg via Getty Images

The Texas House voted 84-59 late Monday to approve new congressional district maps that reduce the number of districts with Black and Hispanic majorities, per the Texas Tribune.

Why it matters: The legislation comes after recent census figures found Texas' growing diverse population doesn't bode well for Republicans, who then worked to protect incumbents with the redrawn maps.

2 hours ago - World

North Korea's military fires another ballistic missile into sea

A woman in Seoul, South Korea, walks past a television image if North Korean leader Kim Jong-un. Photo: Jung Yeon-je/AFP via Getty Images

North Korea's military fired at least one ballistic missile into the sea off its east coast on Tuesday, per multiple reports.

Why it matters: Pyongyang's latest in a series of recent missile launches happened hours after U.S. officials emphasized their commitment to restart negotiations on North Korea's nuclear weapons program, which have stalled since talks broke down during the Trump administration, AP notes.

Updated 2 hours ago - Politics & Policy

Trump sues National Archives, Jan. 6 committee to block records request

Photo: Chip Somodevilla/Getty Images

President Trump filed a lawsuit Monday seeking to block the National Archives from releasing White House records to the House select committee investigating the Jan. 6 Capitol insurrection, citing executive privilege.

Why it matters: It's the latest escalation in Trump's campaign to disrupt the committee's sweeping probe into the circumstances surrounding Jan. 6, including his actions and communications leading up to the Capitol attack.