Uber raises $3.5 bn from Saudi Arabia's Public Investment Fund
02 June 2016
As it looks to further expand globally, Uber has turned to the Middle East for the biggest cash infusion from a single investor.
Uber yesterday said that it had raised $3.5 billion from Saudi Arabia's Public Investment Fund, the kingdom's main investment fund. The money which came as a part of the company's most recent financing round, Uber said. The company continued to be valued at $62.5 billion.
A managing director at the Public Investment Fund, Yasir Al Rumayyan, would take a seat on Uber's board, joining Uber's chief executive, Travis Kalanick, and other directors, including Arianna Huffington.
"We appreciate the vote of confidence in our business as we continue to expand our global presence," Kalanick said in a statement. "Our experience in Saudi Arabia is a great example of how Uber can benefit riders, drivers and cities and we look forward to partnering to support their economic and social reforms."
According to Uber, which had viewed the Middle East as an important area in its expansion, the investment further aligned the company with Saudi Arabia as the kingdom planned to transform its economy, cutting its dependence on oil and improving employment.
The investment from Saudi Arabia was among the biggest single investments garnered by the technology world's top privately held companies. Uber, one of Silicon Valley's most valuable private businesses, due to its valuation had garnered billions of dollars at a rapid pace over the last three years.
According to commentators, while some of Uber's new $3.5 billion would likely go towards expanding its presence in the Middle East - where it was already active in 15 cities, much of it could go towards financing its expansion in China and India.
Ola is already a strong contender in India's fast expanding ride-sharing market, but it was in China where Uber was being forced to expand its presence fast or else lose out to Didi, which already dominates there, they add.
Uber confirmed in February that it was losing $1 billion a year in China and had also invested at least $1 billion in India since last summer.
Uber claims it was already profitable in the US and Canada, but the aggressive expansion into large, emerging markets where it faced fierce local competition demanded an aggressive funding strategy.