The Kumpulan Wang Persaraan (Diperbadankan), Malaysia’s public-sector pension fund has made an investment in Uber. Coming out of the blue, the undisclosed investment marks the pension fund’s first direct investment in a foreign company.
The Kumpulan Wang Persaraan (Diperbadankan) or the Retirement Fund (Incorporated) was established on the 1st of March 2007 under the Retirement Fund Act 2007, by the Malaysian government. It is responsible for assisting the Federal Government in financing its pension liability, and does so by aiming to achieve optimum returns on its investments.
The KWAP is known for investing the fund in equity, fixed income securities, money market instruments etc. However, this time, it is attempting to go global and has chosen Uber to make its debut.
Speaking on the topic, Dato’ Wan Kamaruzaman Bin Wan Ahmad, CEO, KWAP, said
We are excited to make Uber our first direct investment in a foreign company. This is part of our efforts to become a diversified global investor. Uber is an exciting company that is changing the way the world moves, and we believe ride-sharing has huge potential to transform the future of mobility.
Uber launched its service in Malaysia in 2014. Since then, the company has expanded its presence to Kuala Lumpur, Johor Bahru, Penang, Ipoh, Kota Kinabalu and Kuching.
Speaking on the investment, Uber CEO and Co-Founder Travis Kalanick said,
Malaysia has demonstrated its forward-looking position in embracing new technology to help solve transportation challenges and create more economic opportunities.
The investment is important for Uber. Recently, its biggest rival in Southeast Asia, Grab, managed to raise a serie F round of funding. The company was estimated to have picked up somewhere around $750 million. And you can bet that a significant portion Grab’s strategy involves countering Uber’s influence in the region.
That said though, getting an investment from a body like the KWAP is good in a lot of ways. First off, the vote of confidence from a public body is good for the company image and secondly, there is a lot more where the first investment came from.
Meanwhile, KWAP has done something pretty radical too. While, pension funds in the US are known to invest in startups from time to time, those in the Southeast Asia region have usually refrained from doing so. There are a lot of variables involved with putting money into a startup and pension funds usually aren’t risk takers. The fact that KWAP has decided to invest in Uber, is also a representation of the fund’s firm belief in the cab aggregator.