Echoes of joyous high-fives reverberated around Dubai on Tuesday, when the ride-hailing industry’s worst-kept secret was finally announced formally — Uber is to take over Careem in a deal that values the Middle East company at an eye-watering $3.1 billion, in the region’s biggest-ever technology deal. The founders, employees and investors of Careem were over the moon to be getting such a big payday. Although it is hard to calculate exactly, Careem was valued somewhere just short of $2 billion in the last investor round, so the big windfall is music to the ears of all concerned. And why not? The founders had a great idea and applied it in a part of the world that was uniquely in need of greater urban mobility; the employees put a lot of hard work into implementing that plan; and investors saw a good thing and backed it with cool, hard cash. A lot of that cash came from Saudi Arabia, and even more will be going back to the shrewd investors who have supported Careem in several funding rounds. Al Tayyar Travel, the Saudi leisure conglomerate, was an early backer and has stood by Careem throughout. Saudi Telecom, directly and through related entities, will take home big profits to boost its ambitions in the technology venture capital space. Kingdom Holding, investors in two of the later rounds of financing, will also book a healthy return. Saudi Arabia’s Public Investment Fund (PIF) was not a direct investor in Careem, but, of course, it is a big backer of Uber, through thick and thin, so the deal has strategic benefits there, too. PIF has found a seat in the fastest-growing ride-hailing business in the Middle East and beyond. Both Uber and Careem were at pains to point out that the latter would continue as an independently run brand for the foreseeable future. Frank Kane The venture capital industry at large was patting itself on the back. Like the sale of souq.com to Amazon recently, the Uber-Careem transaction proves that the Middle East has the ability to start up and see an innovative project through to exit — and eventually make big-dollar returns to plow back into other entrepreneurial ventures in the region. The search will immediately begin for the next Careem-type business to back, to the advantage of SMEs and startup entrepreneurs everywhere. It seems almost churlish, amid all the euphoric self-congratulation, to point out that there must be losers, too. But, of course, there are. Some Careem customers, for example, have voiced reservations over whether the deal will benefit consumers. When two dominant market forces merge, it often bodes ill for competition, prices and service. Regulators in all the regional markets affected will look at those issues over the next year. Assuaging some of those fears, both Uber and Careem were at pains to point out that the latter would continue as an independently run brand for the foreseeable future. But the inexorable logic is that the potential synergies that made Uber part with all that cash can probably only come, long term, from greater integration. Shed a tear, too, for Abraaj, which was a big Careem investor from early on but which sold out in a recent fundraising round at a much lower profit than they would have got now. Other early investors will also be nursing “what if” regrets as they study the deal. VC investment is all about timing. Would it have been better for Careem to have seen the thing all the way through to initial public offering (IPO)? That would have been an even bigger boost to the self confidence of the regional venture capital business, of course, but there is no guarantee that capricious markets would have come up with the same valuation as Uber. What does the Uber-Careem deal tell us about the state of the market in technology assets? The big valuation could be taken as another sign that tech markets are getting frothy. Technology has been the driver of the global bull market, not least in the US, the home of Uber. We will be in a better position to judge the ongoing sustainability of the tech boom later in the year, after both Lyft, Uber’s main US rival, and the San Francisco firm itself have gone through the IPOs they are pledged to launch. One shrewd analyst of the tech scene said yesterday: “Just remember, nobody ever got poor by taking profits,” and that applies in spades to the founders, employees and investors in Careem. Frank Kane is an award-winning business journalist based in Dubai. Twitter: @frankkanedubai Disclaimer: Views expressed by writers in this section are their own and do not necessarily reflect Arab News" point-of-view