Fox Capital Partners: The company behind ride-sharing app, Uber, has won a $3.5bn investment from Saudi Arabia’s Public Investment Fund which it says will help it to expand its operations in the Middle East.
Uber says that 80% of its users in the kingdom are women as they are forbidden from driving themselves in the country. The funding round effectively values Uber, the world’s biggest unicorn (a startup company worth over $1 billion) at $62.5bn.
The Public Investment Fund was set up to develop the country by investing the revenues from the country’s huge oil reserves.
Despite a number of successful fund-raising rounds, Uber continues to face challenges and complete or partial bans in various cities around the world in which it operates. Rivals including Lyft in the US and Grab in Asia as well as opposition to its operations from long-established traditional taxi operators has caused issues for the company.
“We’re highly skeptical of the values being thrown around by analysts and commentators on Uber’s value and it’s worth remembering that many of these same voices said were saying that GoPro and King Digital Entertainment were great buys too,” said Gordon Li-Chao, chief economist at Fox Capital Partners.
Nevertheless, Uber has attracted large sums from a range of investors including automakers Toyota and Volkswagen, both of whom have struck partnerships with it.
Uber's deal with Toyota came after tech giant, Apple invested $1bn in Chinese rival service, Didi Chuxing.
“There’s a great deal of interest around these ride-hailing services but, while there is definitely a market for their use, is Uber really worth $62.5 billion? Fox Capital Partners don’t think so,” concluded Li-Chao.

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