Uber's unrelenting cash grab reached new heights today, as the world's most valuable technology startup announced that it had received a $3.5 billion investment from Saudi Arabia's main investment fund.
As part of the investment, Public Investment Fund managing director Yasir Al Rumayyan will take a seat on Uber's board. Meanwhile, Uber's balance sheet — cash and convertible debt — shoots up to $11 billion, which is sure to come in handy as the company continues to burn through capital. It should also help Uber's quest to dominate the global ride-hailing market, especially in China where it loses about $1 billion a year in competition with its rivals.
On the surface, Saudi Arabia seems like an inhospitable place for a Silicon Valley company like Uber. Women are prohibited from driving, and according to the UN, the kingdom continues to "try, convict, and imprison political dissidents and human rights activists solely on account of their peaceful activities."
However, Uber claims it is helping Saudi Arabia boost entrepreneurship, reduce its dependence on oil, and provide a way for riders, especially women, to get around more efficiently. "We appreciate the vote of confidence in our business as we continue to expand our global presence," Uber CEO Travis Kalanick said in a statement. "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 Public Investment Fund is reportedly valued at over $100 billion. Uber was most recently valued at $62.5 billion, making it the most valuable tech startup in the world.
The investment is certainly a vote of confidence in Uber by the Saudi royal family. Princess Reema Bint Bandar Al Saud recently joined the company's policy advisory board. Uber said last year that it will spend $250 million on expansion plans in the Middle East, a plan enthusiastically endorsed by the Saudi investment fund. "We’ve seen first-hand how this company has improved urban mobility around the world and we’re looking forward to being part of that progress," said Al Rumayyan in a statement.
It's doubtful, though, that the cash will bring Uber any closer to a public offering. In recent interviews, Kalanick has shrugged off calls from his company's investors to go public, arguing it was his job to "make sure it happens as late as possible." The speculation is that Kalanick is holding off an IPO to delay any meddling from shareholders, while also giving him time to turn Uber profitable.