In the last 10 years, startups’ and VCs’ doors were flung open to accept their money. The Chinese government and state-owned entities back more than 20 Silicon Valley venture capital firms, Reuters reports. Russian oligarchs have seeded multiple investment funds. Yet no one has been embraced by the US technology industry like Saudi Arabia. Saudi investors have directly participated in investment rounds totaling at least $6.2 billion over the last five years with big bets on Lyft, Uber, and Magic Leap, among others. A $45 billion investment (with one more on the way) in SoftBank’s venture funds makes Saudi Arabia the largest single investor in US startups (paywall). That doesn’t even account for private investments, potentially worth billions of dollars, by the Saudi royal family and its inner circle. Just the top known investment rounds with Saudi participation are included in the table below.[...]
So the Saudis are personae non gratae for the moment in the tech world. Executives from Uber to Google bailed on Saudi Arabia’s “Davos in the Desert,” and abandoned advisory roles on Saudi projects. A few entrepreneurs are putting their money where their mouth is. Richard Branson, who suspended a $1 billion Saudi investment in Virgin’s space ambitions, said ”the disappearance of journalist Jamal Khashoggi, if proved true….would clearly change the ability of any of us in the West to do business with the Saudi government.”[...]
Is this the beginning of a trend? So far, the only investors to make explicit statements rejecting Saudi money are not major players in Silicon Valley’s ecosystem, or already get their cash from elsewhere. Most would not respond to inquiries. Andreessen Horowitz, Khosla Ventures, Sequoia Capital, True Ventures, 500 Startups, Y Combinator, along with other firms and industry associations in venture capital and limited partnership investors all declined to comment on the record.
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