Uber, the US-based taxi service, has raised $3.5bn from Saudi Arabia’s sovereign wealth fund, a move that will help the company’s expansion in the Middle East and North African (Mena) region.

The investment from the Public Investment Fund (PIF) is part of Uber’s most recent financing round, which values the company at $62.5bn, making it the highest-valued venture capital-backed firm in the world, UK news agency Reuters cited an Uber statement as saying.

Uber said Riyadh’s investment puts its total balance sheet, including cash and debt, at more than $11bn.

The firm has aggressive expansion plans in the Middle East and North Africa (Mena) region, where it is investing $250m. It now operates in nine countries and 15 cities, but, as in other regions including China and India, Uber is competing against Middle Eastern taxi start-ups such as Careem, which operates in 20 cities across the region.

In the first quarter of the year, Uber had more than 395,000 active riders across the Mena region, a five-fold jump from the first quarter of 2015, and 19,000 active drivers, representing a four-fold increase over the same period.

The firm says it has operated in Saudi Arabia since early 2014 and about 80 per cent of its more than 130,000 riders in that country are women.

The company’s co-founder and CEO Travis Kalanick said the PIF investment was a “vote of confidence’’ in Uber’s business model.

Yasir al-Rumayyan, managing director at the PIF, will take a seat on Uber’s board, as part of the investment agreement. He will join other members, who include US venture capital firm Benchmark Capital’s general partner Bill Gurley and US online news agency Huffington Post’s co-founder Arianna Huffington.

The PIF is at the heart of the economic transformation plans of Saudi Arabia, the biggest regional economy and the world’s top oil exporter. The kingdom plans to inflate the size of the sovereign fund to about $2 trillion by floating less than 5 per cent of state oil giant Saudi Aramco on the stock market and transferring the rest to the PIF. The fund will invest at home and abroad and will help the government diversify its income streams away from oil to proceeds from investments.

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