Uber Receives $3.5 Billion Saudi Fund, Surpasses Rivals In Raising Capital

Uber Technologies Inc., the online transportation network company has announced on June 1 raising $3.5 billion from Saudi Arabia’s Public Investment Fund. The raised fund will help the San Francisco based car hailing service to expand its network in the Middle East. Notably mentioning, around 90% of the Uber users in Saudi Arabia are women who are restricted from driving inside the country.

The recent funding increases value of the company to $62.5 billion. Yasir al-Rumayyan, a new managing director is going to be appointed at the fund who will also enjoy a seat in the board of directors for Uber.

Saudi Public Investment Fund has been formed with revenues generated from its vast oil reserves in a bid to develop the country. The recent investment appears as a part of Uber’s ongoing global fund raising campaign. Uber is in aggressive attempt to expand its network in the Middle East Region with an investment of $250 million, reports BBC.

 No existing Uber investor is required to cash out following the new funding. Investment from the kingdom appears as a part of its planning to diversify its economy while reducing dependence on oil. It is one of the largest single investments procured by the app based ride hailer. Uber has been able to raise billions in investment over the last three years and is now acknowledged as the most valuable private business in Silicon Valley, according to a report published in The New York Times.

The authority for Saudi Arabian Public Investment Fund considers Uber as an extra ordinary company with inspiring missions and is excited in completing the important strategic investment, informs Yasir al-Rumayyan who holds the responsibility of managing director for the fund too.

As the sovereign investment arm of Saudi Arabia, the fund eyes to achieve attractive long-term financial gain from its investments. When the car hailing service will go for public, the investment is believed to generate considerable payout, forecasts VentureBeat.

Uber has been attracted to the Saudi sovereign wealth fund considering possibility for longer investment tenure than the venture capitalist. Venture capital firms usually withdraw their investments after seven to ten years.

Toyota has also made an investment in seven-year-old Uber recently. In other developments, Uber competitors have also been able to raise large sums of investment. Didi Chuxing of China has received $1 billion fund from Apple and Lyft has been able to manage $500 million from General Motors (GM). Ola of India has also managed $500 million during last year.