Tesla, Magic Leap, and other Saudi tech investments in 2018

Ahead of the 2018 edition of Future Investment Initiative (FII) starting tomorrow, Argaam has compiled a list of recent tech investments by Saudi Arabia, as the country explores new venues to diversify its economy.

With global ambitions in mind, the Kingdom and its sovereign wealth fund have made several big-ticket investments in global tech companies over the past year, including electric vehicle manufacturers Tesla and Lucid Motors and augmented reality startup Magic Leap.

Here are six major investments in the tech sector by Saudi entities:

1) Magic Leap

Saudi Arabia’s Public Investment Fund (PIF) invested $461 million in Magic Leap, a US-based augmented reality startup, in March 2018. The sovereign wealth fund joined Magic Leap’s other big-name backers including Google and Alibaba.

The investment was announced when Crown Prince Mohammed bin Salman visited United States and unveiled a series of investment deals.

2) QuantCube Technology

Five Capital, an investment fund sponsored by Saudi’s Kingdom Holding Company and CDC International Capital, invested $5 million in QuantCube Technology in May this year.

The investment will help the French artificial intelligence start-up and alternative data provider to expand its presence and capabilities in key markets internationally.

3) Deezer

Kingdom Holding, owned by Saudi billionaire Prince Alwaleed Bin Talal, invested SAR 1 billion in global music streaming platform Deezer in August 2018.

The prince’s investment vehicle and his media company Rotana Group bought new shares in Deezer, according to a company statement. Deezer will also get access to Rotana’s audio and video content as part of the deal.

4) Tesla

The PIF reportedly invested $2 billion in a less than five percent stake in Elon Musk’s Tesla in August this year.

The sovereign wealth fund had acquired the shares over the previous few months as part of its wider investment strategy to diversify revenue away from oil.

5) Lucid Motors

Another American electric car manufacturer, Lucid Motors, secured an excess of $1 billion funding from the PIF last month.

The funding will allow Lucid to complete the engineering development and testing required to produce the Air – its all-electric sedan – which is due in 2020.

6) SoftBank

The Saudi wealth fund plans to invest another $45 billion in SoftBank’s second Vision Fund in October 2018.

Crown Prince Mohammed bin Salman, also the chairman of PIF, said in a Bloomberg interview that the fund wanted to be a key investor in the next $100 billion fund that SoftBank CEO Masayoshi Son plans to raise, because it had seen “a huge benefit” from the first one.

Prince Mohammed had set up the first $100 billion Vision Fund with Son. The $45 billion pledged this month will bring the Kingdom’s total investment in the two funds to $90 billion.

Write to Paromita Dey at paromita.d@argaamplus.com