Saudi wealth fund takes $3.5bn Uber stake

Jeffrey E.

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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

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The investment also marks a bold step for Saudi Arabia's sovereign Public Investment Fund, which 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 reform programme.

After its investment, the PIF will own approximately 5 per cent of Uber, and its managing director, Yasir Al Rumayyan, will join Uber's board.

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

In total Uber has raised around $10.7bn from outside investors, excluding a $2.3bn convertible debt facility, making it the best funded start-up in the world.

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 in a bid to gain market share from local rivals.

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

"I think it is an indicative investment of where we are moving for the country, putting our money in a visionary business"

Princess Reema Bandar al-Saud, Uber global policty advisory board member

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

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Ride-hailing services have been particularly popular among women in Saudi Arabia, where women are not allowed to drive 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 its Vision 2030, a plan to radically transform its economy and end its addiction to 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," she added.

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

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