Saudi oil money to fuel Uber expansion into the Middle east and Asia
The Uber juggernaut is showing no signs of a slowdown despite numerous highly publicised wrangles with regulators in many markets around the world. Investor interest remains strong in what is now the highest valued private company in the Silicon Valley. Under the leadership of CEO and co-founder Travis Kalanick, the company’s value has skyrocketed in the past few years thanks to a series of highly successful funding rounds. The latest to buy into Uber’s plan for global domination are the Saudis, with their sovereign fund looking to pump over $3.5 billion into the company.
The deal, which involves the largest investment by a single entity into the startup ever, will also see Yasir Al Rumayyan, MD of the Saudi Arabia Public Investment Fund joining the likes of Arianna Huffington and Paul Garrett on the Uber Board of Directors. According to Bloomberg reports, the Saudis are considering loan options to fund their investment and are holding preliminary discussions with domestic as well as international banks for the purpose.
The Saudi connection will surely provide a shot in the arm for Uber’s nascent Middle-Eastern operations. But really, the alliance will prove to be a mixed bag in terms of PR for Uber elsewhere, thanks to the ultraconservative Kingdom’s poor record when it comes human rights and especially women’s rights and liberties. The company has been quick to start making the right noises to mitigate any damages though, declaring their intent to support pro-women initiatives within Saudi Arabia.
Elsewhere in the global ride hailing market though, things are far from rosy for the San Francisco based company. They largely dominate the US market, but their sheer size and perceived threat has forced the dominant players from several major emerging Asian markets to join forces. And that is always a bad sign, especially when two of those markets are India and China. This anti-Uber alliance includes Didi Chuxing from China, Ola Cabs from India, Grab Taxi in Singapore as well as Lyft, Uber’s homegrown foe. And they also have their own coterie of major investors, with the likes of Tiger Global, Softbank and Coatue Management all willing to bet their cash against Uber in the battle for the Asian markets. .