Uber has managed to surprise analysts and consumers alike in a number of ways. First, Uber has had a meteoric rise that has allowed it to go from being unknown to being nearly a household name. Second and more importantly, it has managed to do what was previously considered impossible by having the single largest round of fund raising by an U.S. company ever. An astronomical amount, Uber has added 3.5 billion dollars through startup fundraising. So, how is any of this possible? What has Uber discovered that has helped the startup raise billions of dollars? Let’s take a moment to examine the secrets to how a company like Uber can raise so much money.
An Unusual Investor
Typically, fundraising comes from venture capitalists groups that are relatively small and localized. What Uber stumbled into with their fundraising was something previously unrecognized. Unlike other funding campaigns, Uber got all of its money from a single investor. Saudi Arabia’s sovereign wealth fund is responsible for all the money. The government of Saudi Arabia has many different investment vehicles as a part of the country’s financial portfolio. A fraction of that includes startups in the tech center. In fact, the only thing truly surprising about the investment by Saudi Arabia is the dawning realization among American tech startups that investments can come from overseas. You may be surprised to learn that Saudi Arabia is not alone when it comes to American investments.
An Increasingly Globalized World
Living in an era where communication can be sent in a fraction of a second from one corner of the world to the other, investments have become increasingly global processes. For example, along with Saudi Arabia, Singapore has invested billions of dollars through their government both in local and international companies. A fantastic way to hold onto money and invest it against risk, many countries (especially those like Singapore that are highly dependent on international markets) are finding fertile ground in the American tech startup world. The global markets are open to any and all, and there’s a real chance to create lasting wealth with these types of investments.
Taking Steps Towards The Future Of Investments
As it currently stands, no company has raised more money both locally and internationally than Uber. Sitting on a nest egg of 11.5 billion dollars of total investment, the second closest start up is Didi Chuxing and Ant Financial, who both have 6.3 and 4.5 billion dollars respectively. From there, the next 10 or so top-funded startups are all below 3.3 billion dollars. What this means for us is that the world of tech startup investment will continue to change. The only thing we know for sure is that like the technology that inspires innovation, a decade from now startup financing may not resemble anything that we are used to dealing with. Investors will certainly want to move forward making smart plays for today and tomorrow, but constant monitoring of the market is necessary – especially when things can change almost overnight.