How giving $3.5 billion to Uber got a Saudi prince into Silicon Valley - Business Insider

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How the crown prince of Saudi Arabia made his way into Silicon Valley circles with a $3.5 billion investment in Uber (by bradleyhope and ScheckWSJ)

John Micklethwait, the Oxford-educated editor in chief of Bloomberg News, went on TV on April 1, 2016, to report that Saudi Arabia was going to start a $2 trillion investment fund.

But no one could figure out how it would work in practice. Was it possible to pour that much money into global markets without inflating a giant bubble? And who would Mohammed put in charge of managing the investments? The man currently heading the sovereign fund, Yasir al-Rumayyan, was chiefly known, at home and abroad, as an easygoing luminary of the Riyadh golf community who had a taste for fine cigars and after-hours bars in Dubai frequented by long-legged, short-skirted Russian women.

Once the announcement was made, Mohammed knew he needed to show progress quickly. In the ensuing weeks he grilled Saudi officials and foreign consultants alike on how they could show their ideas were working. He'd lose patience with, say, the finance minister and turn instead to the Ministry of Economy and Planning for an urgent task. "The principals changed every week. The wheel gets reinvented every few days," a person working for BCG complained.

The investment would be the first instance of many in which Western businessmen, consultants, and bankers promised the world to the young prince but failed to deliver. Investing in Uber didn't earn him a financial return. Nor did Uber invest in Saudi Arabia in a big way. In effect, Saudi Arabia doled out $3.5 billion for the privilege of announcing it was an investor in Uber. It would likely get its money back, but without an impressive return.

"We don't need your money," one prominent VC told an emissary of Mohammed's ahead of his visit to California. "We've got plenty." Another explained that his firm already had Saudi money, irritating the prince's entourage since this money manager apparently didn't know the difference between money from some rich Saudi individual and the opportunity that Mohammed was offering to manage money for the Saudi state.

But the more established VCs' attitudes seemed to change at a dinner at the Fairmont Hotel atop San Francisco's Nob Hill. "I need a bridge between Saudi and Silicon Valley. I need you to help our reforms," Mohammed told a group that included Marc Andreessen, Peter Thiel, John Doerr, and Michael Moritz, titans of venture capital with decades of experience backing startups that turned into multi-billion-dollar corporations.

 

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bradleyhope ScheckWSJ The one who invested was the Saudi Investment Fund, and he made many investments in many major companies in the world

bradleyhope ScheckWSJ Was leaving out the lead role davidplouffe played in securing the PIF investment in uber deliberate?

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