Saudi wealth fund takes $3.5bn Uber stake


Saudi wealth fund takes $3.5bn Uber stake 


Leslie Hook in San Francisco


Saudi Arabia’s sovereign wealth fund is investing $3.5bn in Uber, marking the largest single investment ever made in a private company.


The deal solidifies Uber’s place as the most-funded start-up in the world and brings its war chest to more than $11bn, at a time when the company is aggressively expanding in nearly 70 countries worldwide


The investment also marks a bold step for Saudi Arabia’s sovereign Public Investment Fund. It has come under new management as part of a broader reshuffle that put in place the team handpicked by Mohammed bin Salman, deputy crown prince, as he implements an ambitious economic reform programme.


The PIF will own approximately 5 per cent of Uber and Yasir Al Rumayyan, its managing director, will join Uber’s board.

The huge sums raised by Uber and its rivals, including China’s Didi Chuxing, Lyft and Gett, underscore a tectonic shift in the markets for private capital, as companies are able to raise more from investors than ever without have to join the public markets. To put Uber’s fundraising in perspective, Google raised $2bn during its initial public offering in 2004, after raising $25m from investors while it was a private company.


The deal marks the closing of Uber’s Series G fundraising round, which began last year and has brought in more than $5bn from investors including Russia’s LetterOne and China’s Baidu, at a valuation of $62.5bn.


In total Uber has raised about $10.7bn from outside investors, excluding a $2.3bn convertible debt facility.

The news comes just two weeks after Uber’s Chinese rival Didi Chuxing announced a $1bn investment from Apple, 

raising the stakes in the expensive ride-hailing wars in China. Uber has been pouring money into subsidies in China and India, where local company Ola dominates, in an attempt to gain market share.


Uber’s aggressive approach has ruffled feathers in many countries, particularly in Europe, where its low-end Uber Pop service is banned in several markets. However in the Middle East, the company has been largely embraced, with Cairo one of its fastest growing cities.


Princess Reema Bandar al-Saud


Uber said the funding was not tied to any specific agreement to expand its services further in Saudi Arabia, where it operates in five cities.


Ride-hailing services have been particularly popular among women in Saudi Arabia, where they are not allowed to drive by themselves.


Mr Al Rumayyan said in a statement that “we’ve seen first-hand how this company has improved urban mobility around the world and we’re looking forward to being part of the process”.


In April, Saudi Arabia unveiled Vision 2030, a plan to radically transform its economy and end its dependence on oil, as well as to spur entrepreneurship and bolster the private sector.


“I think it is an indicative investment of where we are moving for the country, putting our money in a visionary business,” said Princess Reema Bandar al-Saud, who is a member of Uber’s global policy advisory board.

“A lot of people were originally quite sceptical of Uber in our region, and the fact that PIF is investing is quite an indicator of how things are changing.”

Uber began talks with the Public Investment Fund in early March.

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