Uber has become the biggest funded startup.
Who are the Key Players:
- Uber recently added $3.5bn in funding from Saudi Arabia's Public Investment Fund (PIF), lifting it's balance sheet to $11bn. This cements Uber's position as the most well-funded startup company, and the largest single investment in a private firm ever.
- Saudi Arabia's PIF will own (approx) 5% of Uber, with it's managing director on Uber's board. PIF's investment is a leap forward for Saudi Arabia, a country where economic reforms move at glacial speeds. Now that's changing, with the bold announcement of Vision 2030 by it's new leadership (under Prince Mohammed bin Salman), who is set to to reform the economy.
What it means for Tech Startups and Venture Capital:
Raising $3.5bn in a single funding round is a new global watermark. In an age where seed capital for tech startups is shrinking, the mass consumer appeal of tech startups like Uber and Snapchat is catalyzing their series-investment. Snapchat raised $1.8m in funding last week. The secret sauce is inevitably their viral apps and the phenomenon called 'Uberification'.
What it means to Uber:
- At 6 years old and expanding in 70 countries - Uber has already made it's mark. It is shaking up the traditional taxi industry. It's success has never been short of media attention. Be it cab drivers protesting on roads, in parliaments, or jamming highways - it is working well in Uber's global popularity. The latest drama was in Indonesia, in March 2016. Consumers love anti-establishment appeals. The growth of Uber underscores the fundamental need for urban-mobility.
- Moving on, with a loaded war-chest of $11bn, Uber can now open to new markets, like Middle East. Uber is largely welcomed in Middle East, unlike Europe. Uber is growing fastest in Cairo (Egypt) and operating in 5 cities in Saudi Arabia. In Saudi Arabia it is particularly popular among women riders, who are not allowed to drive themselves. 80% of Uber's customers in Saudi Arabia are women.
- Standing on the shoulders of it's biggest investors PIF (at $3.5bn), Google (at $258m), and LetterOne (at $200m) - Uber has ample ammo for zooming in on competition like Didi Chuxing and Grab.
The interesting part is, Uber has always maintained it's stand as a technology company rather than a transport company. As Ryan Kavanaugh once said, "The key is to embrace disruption and change early. Don't react to it decades later. You cannot fight innovation.".