How Saudi Arabia financed the Silicon Valley

Ein Journalist to disappear – he was probably murdered, instead of getting married to – and the effects are everywhere in the world to feel: business leaders and politicians say Meeting in Saudi Arabia. The us Secretary of state travels to crisis talks to Riyadh. And now you are in Silicon Valley nervous.

The reason money is easy:. Saudi Arabia has directly or indirectly invested about EUR 6.2 billion translated in the Taxi Service Uber, a little more than 2 billion euros in the office rental company Wework and, most recently, nearly 900 million euros in the electric-car maker Lucid. The list of the companies in which the Saudis are involved, is a Who-is-who of the Start-up world: The Virtual Reality company Magic Leap, the Online collaboration Start-up Slack, or sports article producer Fanatics.

The largest Start-up Investor at all

Saudi Arabia is one of the largest investors in American Start-ups at all. The Wall Street Journal is even assumed that it is the largest of all. Since the year of 2016, the equivalent of at least 10 billion euros in American Start-up are gone-ups. A number of Start-ups in Silicon Valley to hang on the drip of the Saudis.

The Saudi Investments are two ways to Silicon Valley: The direct, the government-funded “Public Investment Fund” (PIF) of Saudi Arabia. The Fund is one of the programs of the Vision 2030 to diversify Saudi Arabia’s economy, so dependent on Oil to make. According to the information provided, the Fund had by the end of September of 2017, the volume of the equivalent of almost 200 billion euros. Up to the year 2020, the amount is expected to rise to about 350 billion euros.

Softbank Vision Fund holds the Saudis Loyalty

About 40 billion euros of this amount will be allocated to the Softbank Vision Fund. This is the second, indirect way, through the Saudi funds go to Silicon Valley. The Fund has a total Budget of 80 billion euros. The Saudis Finance with 49 percent is just the half of it. The Fund is considered as the biggest Private Equity funds in the world. So funds that invest outside the stock exchange in the company.

Saudi Arabia is aware of his Power in the Fund to be well aware of. The Saudi crown Prince Mohammed bin Salman recently said unequivocally that there would be without his money, no Softbank Vision Fund.

This is likely to be the reason why the boss of Softbank, the Japanese Masayoshi Son, the Kingdom holds the Faithful, and, as before, at the Future Investment Initiative would like to attend. This is a conference of the PIF, which would shape their own claim to the future of global Investments and 23. until 25. October takes place in Riyadh.

For Uber, it is delicate

The Chairman of the management Board of the Bank JP Morgan, and the Investment firms Blackstone and Blackrock, however, have cancelled their participation. German business leaders have positioned themselves as faz.net reported, yet. Siemens CEO Joe Kaeser has manoeuvred during a meeting of the American magazine Fortune, he did not want to commit just yet.

Particularly delicate is the Situation of Uber. In return for the Investments in Uber PIF demanded a seat on the Board of Uber and get him. Yasir Al Rumayyan, the General Director of the PIF, is a member of the twelve people On Board. Now two more Uber Board members, the Uber CEO Dara Khosrowshahi and Arianna Huffington, have cancelled their participation in the conference, is expected to be discussed, that is probably why. Finally, Uber is planning for the next year of its IPO. Recently it became known that American banks to rate the company now with more than 100 billion euros. In response to this rejection, some American media reported that the foreign Minister of Bahrain, Khalid bin Ahmed Al Khalifa, has joined a call for a Boycott against Uber.

The do-gooders and the money

As Elon Musk announced a few months ago, to want to Tesla from the stock exchange, he hoped to be able to a part of the more than 60 billion euros by using the PIF Fund. It is now clear that Elon Musk has strained his back with this announcement.

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Nevertheless, the affair shows the missing journalist Khashoggi also: on the one Hand, entrepreneurs from Silicon Valley, often occur with high moral standards, many of them want to improve the world is fundamentally new work E-cars or Taxi shapes, Alternatives. On the other hand, money is obviously out of a Kingdom of law, the inconvenient journalists, seems to be easy to dispose.