Sovereign Wealth Money in Latest Airbnb Round
Sovereign wealth funds are not afraid of investing in billion-dollar startups. Venture capital insiders call some of these startups unicorns – essentially when a startup has exceeded an arbitrary equity valuation amount of US$ 1 billion through capital raises. Sovereign funds have allocated to startups such as Flipkart, VANCL, Square, Spotify and – yes, taxi cab service Uber Technologies. The Qatar Investment Authority (QIA) is an investor in Uber. The wealth fund is reportedly in the works of opening a New York office.
Over the years, Asian sovereign wealth funds like GIC, Temasek and the China Investment Corporation (CIC) have built informal networks and pipelines for major venture deal flow. This is why sovereign wealth investors are spending more time in the San Francisco Bay Area, building bridges with Silicon Valley’s in-crowd. Analyzing 2003 to current 2015 data from SWFI’s Sovereign Wealth Fund Transaction Database, sovereign funds are investing in higher frequency and amounts in Silicon Valley and Asia technology startups. The last major wave of sovereign wealth-backed venture capital investment was between 1997-2001, led by Temasek Holdings and GIC.
Slosh of Money for Airbnb
San Francisco-based Airbnb Inc., an online home-rental service, raised an astonishing US$ 1.5 billion, valuing the company at US$ 25.5 billion. [ Content protected for Sovereign Wealth Fund Institute Standard subscribers only. Please subscribe to view content. ]
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