Uber has received a $3.5 billion investment from Saudi Arabia’s sovereign wealth fund, the company announced Wednesday. The cash will help the ride-sharing company to expand in the Middle East, where majority of the company’s users in Saudi Arabia are women.
Uber currently is operating in 460 cities in 69 countries. The company is expected to use the new capital to expand in Middle East, India and China.
Saudi Arabia Is Important Market For Uber
Saudi Arabia’s Public Investment Fund will inject $3.5 billion into Uber, valuing the company at $62.5 billion. This is the largest single investment ever made in a private company, Times reported.
The deal will see the fund’s Managing Director Yasir Al Rumayyan joining Uber’s board.
The ride-sharing company seems interested in expanding in the Middle East. The company has operations in 15 cities in across nine countries in the region, including Bahrain, Egypt, Israel, Jordan, Lebanon, Morocco, Qatar, Saudi Arabia and the United Arab Emirates.
Uber plans to invest $250 million in the region. The company reported 395,000 active drivers in the region during the first quarter, versus 19,000 riders a year ago.
Saudi Arabia looks to be an important market for the company, where 80% of its users are women. This is because women are not allowed in drive in Saudi Arabia.
The Public Investment Fund, located in Riyadh, Saudi Arabia, is set up by the kingdom to make investment in different sectors and companies. The kingdom wants to reduce its dependency on the oil industry and promote entrepreneurship.
“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.”
Ride-Sharing Business Attracting Top Players
Apple Inc. is also betting on the ride-sharing business, investing $1 billion in Didi Chuxing, a ride-hailing service similar to Uber operating in China. Alphabet Inc , mother to Google, is also looking to get a foothold in the ride-sharing business. The firm recently unveiled the pilot program of its ride-sharing app with a pilot program for folks in the San Francisco area. The new program will see several thousand workers pooling a ride to and from work using the Waze navigation app.
Recently, Uber and Toyota Motor Corp (ADR) announced a partnership to create new flexible leasing options for the ridesharing company’s drivers. The companies will offer the program on a trial basis in countries where ride-sharing is growing. The partnership will take various factors into account such as regulations, business conditions, and customer needs.
The partnership is expected to begin providing new leasing options by the second half of 2016. Drivers will be able to purchase vehicles on lease from Toyota Financial Services. For the repayment for the loan, they can use earnings generated from the Uber network. “The leasing period will be flexible and based on driver needs,” Toyota said.