Uber has raised $3.5 billion from Saudi Arabia's sovereign wealth fund, the U.S. ride-hailing service said on Wednesday, gaining a crucial partner in its expansion into the Middle East.
The investment from the Saudi Arabian Public Investment Fund was part of Uber's most recent financing round that valued the company at $62.5 billion, Uber said, making it the most highly valued venture capital-backed company in the world.
In a written statement, Uber co-founder and Chief Executive Officer Travis Kalanick called the investment a "vote of confidence in our business."
As part of the investment, a managing director at the Saudi fund, Yasir Al Rumayyan, will take a seat on Uber's board, the company said. Other board members include Benchmark Capital general partner Bill Gurley and Huffington Post co-founder Arianna Huffington.
Uber said the Saudi's investment puts the company's total balance sheet, including cash and debt, at more than $11 billion.
The funding round is a departure from the startup investing climate, which has seen contraction in recent months as technology companies face greater scrutiny over their valuations. It shows that the some of the most high-profile companies with mass consumer adoption -- among them also Snapchat, which last week disclosed a $1.81 billion funding raise -- can still demand investor dollars, even as other tech firms are downsizing to weather a funding drought.
Uber has committed to investing $250 million in the Middle East and North Africa, where it has grown aggressively and is now operating in nine countries and 15 cities in the region. But, as in other regions including China and India, Uber is competing in the Middle East against local ride-hailing startups such as Careem, which operates in 20 cities across the region.
In the first quarter of the year, Uber had more than 395,000 active riders across the Middle East, a five-fold jump from the first quarter of 2015, and 19,000 active drivers, representing a four-fold increase over the same period.
Uber says it has operated in Saudi Arabia since early 2014 and about 80 percent of its more than 130,000 riders in that country are women.
Uber will use some of the new funds in growth markets including China, where the company is in fierce competition with market leader Didi Chuxing, which is backed by Internet giants Alibaba Group Holding Ltd. and Tencent Holdings Ltd.
"What we continue to be most focused on though is the growth of our businesses around the world, particularly in developing markets like China," Allen Penn, head of Asia operations at Uber, told a technology conference in Hong Kong.
Uber and Didi Chuxing have both spent heavily to subsidize fares to gain market share, betting on China's Internet-linked transport market becoming the world's biggest. Despite the increased competition, Uber is spending 75 percent to 80 percent less per trip now than last summer, putting the company on a more sustainable path, Penn added.
(Reporting by Heather Somerville; Additional reporting by Elzio Barreto in Hong Kong; Editing by Tiffany Wu, Tom Brown and Simon Cameron-Moore)
This story originally appeared on Reuters