Uber, which has viewed the Middle East as an important area in its expansion, said the investment further aligned the company with Saudi Arabia as the kingdom planned to transform its economy, reducing its dependence on oil and improving employment. Until now, Saudi Arabia has not been known for venture capital investing, though some members of its royal family have made some deals. Prince Alwaleed bin Talal, for instance, has invested in Lyft, a competitor of Uber. The investment came together after David Plouffe, an Uber board member, traveled to the Middle East in March and was invited to the Saudi fund for a briefing.
The discussions heated up thereafter, culminating in the deal. The company has redefined private fund-raising, drawing hundreds of millions in new cash at a rapid pace of once every six months or so, to fuel its operations globally. Uber has drawn capital from a wide variety of investors, including traditional venture capital firms, mutual fund giants like BlackRock and wealthy clients of firms like Goldman Sachs and Morgan Stanley.
Other sovereign wealth funds, like that of Qatar, have also invested. Other tech darlings have been busy raising money from private investors as well, pushing back any need to join the public stock markets. Rowe Price and Lone Pine Capital. Other tech start-ups have not fared as well in raising money over the last several months. Uber has been spending not only to expand but also to defend its territory β which covers cities in more than 69 countries β against incumbents in regions like Southeast Asia and Europe.
China, in particular, is a difficult battleground, as Uber is spending millions in a subsidy war with Didi Chuxing, the dominant ride-hailing start-up in the country. Uber has rolled out its service in 15 cities and nine countries in the region, including Saudi Arabia. The start-up said that it now has over , active riders in the Middle East, up fivefold from a year ago, and 19, drivers.
Uber said expanding its service may be a boon for Saudi Arabia, a country where women are not allowed to drive because of fatwas, or religious edicts, issued by conservative Muslim clerics that uphold a distinct segregation between the sexes.
