Saudi Wealth Fund Invests $3.5bn in Uber


There are few companies anywhere in the world that can boast of the kind of growth rate that Uber has been able to deliver in recent years.

But then there are few investors who can boast of having deeper pockets than those associated with Saudi Arabia’s sovereign wealth fund.

Perhaps it should come as a little surprise then that the two should team up and agree upon what is the largest single investment ever made by any institution into a private company.

The Saudi fund has backed the American app-based ride-hailing business to the tune of a remarkable $3.5 billion, which swells Uber’s coffers to almost $11 billion.

Aggressive expansion

Perhaps unsurprisingly, given the level of investment which it has succeeded in attracting in recent months and years, Uber’s bosses have their sights set firmly on major expansion of their global operations.

The Californian company has made clear its intentions to spread into as many new markets as possible and to grow the scope of its presence in those new countries very swiftly.

In fact, there are as many as 70 countries around the world in which Uber is currently looking to grow its presence.

Enormous investments

Without having yet become a publicly traded company, Uber has succeeded in attracting investments on an unprecedented scale.

Amazingly, deals are now being done on the basis of valuations that put the business in a bracket above $60 billion.

For its part, Saudi Arabia’s sovereign Public Investment Fund (PIF) has seen fit to invest as much as $3.5 billion in the US company, with hopes clearly very high indeed for the future of the Uber business model.

The PIF’s investment will give it a 5 per cent stake in Uber going forward and its managing director will also now take a seat on the company’s board of directors.

Stiff competition

Meanwhile, there are moves being made elsewhere in the world with the aim of seeing Uber’s ambitions thwarted, with major investments also being made in its biggest rivals.

Only a few weeks ago it was announced that Didi Chuxing had secured an investment worth a cool $1 billion from Apple.

Didi Chuxing is a large-scale provider of taxis for hire via mobile phone apps in China, with the company having already established a very strong presence in the country.

As well as in China, Uber is set to face a stiff challenge for a share of the ride-hailing app market in India.

But this fact is clearly not lost on Uber’s leadership: Uber has been investing on a grand scale into their services in both of these two vitally important markets.

Meeting demand

The investment made in Uber by the PIF is not understood to be linked in any way to the potential of seeing the ride-sharing app made more widely available in Saudi Arabia.

However, the Uber service has become highly popular and very widely used in the five Saudi cities in which it is now offered, as it has in most other parts of the world where it is available.

There has been some resistance to the arrival and availability of Uber in a number of European countries, principally among taxi drivers who fear for their livelihoods but for the most part consumers have been quick to start using the smartphone-based ride-hailing apps.

Quite where the aggressive expansion of Uber will take the company in the coming years remains to be seen but its apps certainly look set to be with us for a long while to come and an extra $3.5 billion worth of investment funds will no doubt help it fight whatever competitive battles it faces along the way.

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