Jan. 21, 2019– Mary Greeley News – London (CNN Business)Saudi Arabia has spent the past few years pumping its oil riches into Silicon Valley.
Tech companies have been among the major beneficiaries of Saudi Arabia’s bid to diversify its economy, receiving billions of dollars via direct investments from the country’s sovereign wealth fund, or indirectly through a massive fund established with Japan’s SoftBank (SFTBF).
Other sectors have also received Saudi cash, including infrastructure, steel and hotels.
Public Investment Fund
Saudi Arabia’s sovereign wealth fund, known as the Public Investment Fund (PIF), has beefed up its investments around the world since Crown Prince Mohammed bin Salman took charge of the fund in March 2015.
It has pumped $45 billion into the SoftBank Vision Fund, accounting for nearly 50% of the capital committed.
Separately, PIF has invested $3.5 billion in Uber in 2016, and its managing director Yasir Al Rumayyan sits on the company’s board.
The fund has also built up a stake of roughly 5% in Tesla (TSLA), according to the company’s CEO Elon Musk.
The PIF announced it would invest $1 billion in Tesla rival Lucid Motors.
Earlier 2018, the fund pumped nearly half a billion dollars into Magic Leap, a startup working on augmented reality products.
But it’s not just about tech.
The PIF has also committed $20 billion to a Blackstone infrastructure investment fund, which was set up to invest in more than $100 billion of infrastructure projects, mostly in the United States.
It also holds stakes in steelmakers ArcelorMittal (MT) and POSCO (PKX), as well as AccorInvest, the owner of Accor hotels.
Vision Fund investments
SoftBank’s $93 billion Vision Fund is largely funded by Saudi Arabia.
Data from Dealogic shows the fund has pumped billions into tech startups around the world.
In 2017, it invested $4.4 billion in WeWork, the startup that has set up popular co-working spaces in cities across the globe.
A $2.25 billion investment into GM’s (GM) driverless car subsidiary, GM Cruise Holdings, followed in 2018.
Slack, DoorDash and Improbable Worlds are among other companies that have received Vision Fund cash.
The fund also holds a 25% stake in Arm Holdings, a UK semiconductor and software company that SoftBank bought for $32 billion in 2016.
A large chunk of Saudi investments abroad is held by private investors. Most prominent among them is the billionaire Prince Alwaleed Bin Talal.
He is a long-time investor on Twitter and acquired a 2.3% stake in Snapchatin 2018, having invested $ 250 million in the company in May.
His Kingdom Holding Company also owns stakes in Lyft and the French music company Deezer, according to data from Refinitiv.
His Kingdom Holding Company also owns stakes in Lyft and the French music streaming company Deezer, according to data from Refinitiv.
After the apparent killing (paywall) and gruesome dismemberment of critic and Washington Post columnist Jamal Khashoggi at a Saudi Consulate in Turkey, the boycott of the country has spread to business leaders, especially in Silicon Valley. Uber CEO Dara Khosrowshahi and other prominent figures including executives at Ford, Google, and JPMorgan Chase (paywall) have pulled out of the country’s annual “Davos in the Desert” event this month.
Saudi Arabia’s massive $45 billion check to SoftBank’s Vision Fund, the largest venture fund of all time, means Saudi money will likely be part of the biggest pool of venture money for years to come. The Vision Fund has made at least 26 investments including into Slack, WeWork, GM Cruise, and other brand names.