Uber, the on-demand Taxi-hailing company has raised $3.5 billion in funding from Saudi Arabia’s Public Investment Fund. The massive cash infusion is the largest investment the ride-hailing start-up has received to date from a single investor, and holds the company’s valuation steady at $62.5 billion.
Funding for new tech companies has been slowing down in recent months amid concerns that many startups have been over-valued. But Uber has been able to raise billions of dollars as it pursues ambitious plans to expand around the world.
As a part of this round, a managing director at the Public Investment Fund, Yasir Al Rumayyan, will take a seat on Uber’s board, joining Uber’s chief executive, Travis Kalanick, and other directors. None of Uber’s current investors have been given an exit.
The fundraising, while of course gets Uber loads of money to further up the ante against its regional competitors globally, also gives it a unique strategic edge of entering the Middle East market. Uber already has plans to invest a massive $250 Million in the Middle East – -a region where it already servers in 9 countries and 15 cities.
In Saudi to be specific, the company has grown to a decent 19,000 drivers offering over 385,000 active riders, rides in Uber cabs. Talking about the importance of this round and the middle-eastern region as a whole, CEO Travis Kalanick said,
“We appreciate the vote of confidence in our business as we continue to expand our global presence. Our experience in Saudi Arabia is a great example of how Uber can benefit riders, drivers and cities and we look forward to partnering to support their economic and social reforms.”
The investment from the Saudi Arabian company is no doubt part of Uber’s plan to gain traction in the relatively untapped Middle Eastern market. Prior to the round, the startup announced plans to inject $250 million in the region.
Though Uber remains the dominant player in the U.S. ride-hailing market, the company has faced greater challenges abroad. Globally, Didi Chuxing is arguably Uber’s single biggest rival due to the company’s stronghold in China. In December, Lyft joined forces with Didi Chuxing, India’s Ola, and Singapore’s GrabTaxi to take on Kalanick and friends.
The rivalry and allegations in the transportation segment going beyond just healthy business competition. In April, Uber had sued Ola for $7.5 million (about Rs 50 Crore) alleging that Ola created fake accounts to make bookings on Uber only to cancel it once the drivers accepted.
Early this year, Uber raised a sum of $200 million from Russian billionaire Mikhail Fridman’s investment company LetterOne. Uber China subdivision raised almost $2 billion from a number of Chinese firms. Last year, Uber, raised $2.1 billion in a round of funding. The round was led by Tiger Global Management and T. Rowe Price. The startup has raised more than $10 billion in equity and debt.
Uber previously said it had earmarked at least $1 billion in a previous fund-raising to grow throughout Asia, and it will use the additional financing to continue in the same vein. In September it raised $1.2 billion in venture capital from Chinese investors.
Uber is the most-valued tech company in the world, where cab booking platforms are considered, Uber surely is ruling the roost. It recently broke Facebook’s record to become the youngest privately-held company to cross the $50 Billion valuation mark.