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Strange story of Uber's massive fund raising deal from Saudi govt

Two years ago, the money helped Uber settle its war with Didi Chuxing in China, fortified its position against rival Lyft Inc

Bloomberg  |  Bloomberg 


Even as Uber’s lawyers finalised the details of the deal, they still couldn’t quite believe it would really happen. The Arabian government was set to give the San Francisco-based startup

$3.5 billion, an astronomical amount. The company’s legal team had to double-check that it was even possible to send that much money in a single wire transfer.

But on June 1, 2016, the Public Investment Fund sent Technologies Inc. the cash in one lump sum. It was the largest single investment from a foreign government to a venture-backed startup ever—and still is.

The sprawling consequences of that mega-deal have yet to fully unfold. Two years ago, the money helped settle its war with Didi Chuxing in China, fortified its position against rival Lyft Inc. and empowered then Chief Executive Officer ahead of a long, pitched battle with investors who ultimately pushed him out. Now, the deal is drawing into a global reckoning over the business world’s relationship with Arabia.

ALSO READ: Drivers' woes with Uber, Ola continue even as cos claim to resolve issue

Bloomberg has learned that through direct and indirect holdings, the Saudi government owns more than 10 per cent of the ride-hailing company. Its board also includes Saudi official Yasir Othman Al-Rumayyan, the managing director of the kingdom’s sovereign wealth fund, and an ally of Saudi Crown Prince Mohammed bin Salman, the fund’s chairman.

As the fallout from the murder of Washington Post columnist at the hands of Saudi agents roils Silicon Valley, there is arguably no company more deeply intertwined with Saudi Arabia than Uber.

First Published: Tue, November 06 2018. 01:08 IST