WheelsOn, a Dubai-based digital car rental platform, has raised US$12.5 million in a new funding round to expand its fleet and enhance its technology.

The company plans to use the funds to increase its fleet size, develop AI-powered pricing tools, and introduce features such as digital car keys for contactless rentals.

The company secured US$2.2 million in equity from MENA-focused private investors, US$6.5 million for fleet expansion, and US$4 million in local bank financing.

WheelsOn was founded in 2023 and operates a mobile-first car rental service in the UAE.

WheelsOn directly operates its vehicle fleet and offers rentals via its app and website.

The firm provides multi-language support and serves both local and international customers.

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🔗 Source: WheelsOn

🧠 Food for thought

1️⃣ Traditional car rental faces massive digital disruption by decade’s end

WheelsOn’s timing aligns with a fundamental shift in how customers book car rentals in the UAE.

The projection that 87% of UAE car rental revenue will come from online bookings by 2030 represents a dramatic transformation from the traditional counter-based model that has dominated the industry for decades1.

This digital shift is already visible across the market, with established players like Thrifty UAE launching self-service kiosks and flexible rental options to meet changing consumer expectations2.

The acceleration toward contactless transactions and mobile-first experiences suggests that companies still relying heavily on physical locations and manual processes face significant competitive pressure.

For context, traditional rental giants like Budget and Europcar have operated in Dubai since 1958 and 1977 respectively, building their businesses around airport counters and physical paperwork34.

WheelsOn’s deposit-free, app-based model directly challenges this established infrastructure, potentially forcing industry-wide operational changes within the next few years.

2️⃣ Intense competition drives innovation in fragmented rental market

WheelsOn enters one of the world’s most competitive car rental markets, where differentiation becomes critical for survival.

The UAE operates over 400 car rental companies competing for a $2.46 billion market, creating an average revenue opportunity of roughly $6 million per company5.

This fragmentation explains why WheelsOn emphasizes unique features like eliminating security deposits and owning its entire fleet rather than operating as an aggregator platform.

The competitive pressure is evident in how established players are responding. Companies like OneClickDrive report steady growth by focusing specifically on luxury vehicles, while others like Al Dhile and eZhire differentiate through tech-enabled services and specialized offerings67.

With the market projected to grow at 13.1% annually through 2030, companies that can establish clear competitive advantages early may capture disproportionate market share as the industry consolidates5.

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