The San Francisco based startup received $3.5 billion on the 1st of June 2016. This wasn’t just a lot of money transferred to them but now a record. The most substantial single investment from a foreign government to a venture-based startup ever-and it still is.
In 2016 Yasir Al Rumayyan, managing director of kingdom’s sovereign wealth fund joined Uber’s board of directors. The investment helped Uber settle its war with Didi chuxing in China, and fortify its position against rival Lyft Inc. The Saudi government owns more than 10% of Uber’s shares. The financial opportunity in Saudi Arabia first occured on kalanik’s radar when Uber’s executive David was on tour.
David Pluoffe had a three-city tour to Cairo, Dubai and Riyadh where he met Saudi Officials including the public investment fund manager. Apple invested $1 billion in Didi in May 2016 as for Uber well they panicked, although Uber was making money at the time it was under the use of unprofitable businesses all over the world.
The deal with the Government that has implicated in a Journalist’s murder
The primary requirement the public investment fund wanted was a board seat, the CEO made that possible and the board was expanded, a new seat for the Public investment fund as well as three other board seats that the CEO would be able to fill. Time came for the announcement to take place, it wasn’t until then that there was hesitation inside Uber’s policy and communications team about the deal with this government.
From gender discrimination in the country and in particular the ban on woman driving. Uber’s policy team added Princess Reema bint Bander Al Saud. A royal family member and a woman’s voice rights advocate in the region to its policy advisory board.
In 2017 things didn’t look so good, allegations were made that Uber violated bribery laws in its businesses around the world. The results of the investigations are still unclear. A group of financial investors turned against Kalanick that summer, kicking off another power struggle. Facing an intervention that did not include Al-Rumayyan, Kalanick announced a sabbatical, a week after that he resigned. In the aftermath, former Uber investor Benchmark filed a lawsuit aginst the company, in a claim that he had been misled about the stability of the business when it agreed to give Kalanick control three plus board seats. Benchmark ultimately dropped the case as part of a truce with Kalanick. By then, he had already filled the seats. Dara Khrosrowshahi the new Uber CEO didn’t make himself present on the Investment Initiative conference in Riyadh that took place in October due to the reports about Jamal Kashoggi. Turkish authorities have informed reporters they believe a team of Saudi security agents killed and dismembered Kashoggi in Turkish embassy. Saudi Arabia has denied being involved in the disappearance of Khashoggi. Saudi Arabia has since allowed women to drive, and both Uber and local competitor named Careem said they would hire women drivers in the country.
By Manuel Silva.
