Uber has garnered $3.5 billion from Saudi Arabia’s investment arm, known as the Public Investment Fund, according to The Wall Street Journal. The $3.5 billion tally remains part of a $5 billion investment from the Saudis and others, representing the largest single investment in a venture-backed outfit. And now, Uber is valued at $68 billion.
The latest round eclipses the $4.5 billion record set not long ago by Ant Financial.
The six-year-old Uber saga has been one where large capital raises are hardly anathema. The round before the one just reported came in at $2.8 billion for Uber. The Saudis join recent investments from Toyota, among others. The Uber capital raises have had the impact of building up the balance sheets, to the tune of $11 billion, because of swelling cash reserves.
The firm, said WSJ, is in the midst of building out its relationship with Saudi Arabia, even as the country wants to lessen its oil dependency and diversify its investments. At least part of the funding comes through the sale of up to 5 percent of state-owned oil company Saudi Arabian Oil Co. That sale was transferred to Saudi Arabia’s sovereign wealth fund.
As part of the Uber investment deal, the managing director of the Saudi fund, Yasir Al Rumayyan, is getting a seat on Uber’s board of directors.
Strategically speaking, the capital raise gives Uber the advantage of having dry tinder to expand internationally, especially through subsidizing new drivers. Subsidies have proven to be a conduit to new business.