Illustration: Tiffany Herring/Axios
Saudi Arabian oil giant Aramco is injecting $4 billion into its VC arm in an attempt to expand the kingdom's economy beyond oil.
Why it matters: The massive fund could provide much-needed financing for climate tech companies in a year that could remain challenging for fundraising.
Details: Aramco said it will more than double the fund for Aramco Ventures, from $3 billion to $7 billion.
- Another $500 million will go to Wa'ed Ventures, which will invest in Saudi Arabian startups.
- Aramco Ventures plans to focus on "new energies, chemicals and transition materials" as well as "diversified industrial businesses, and digital technologies."
Big picture: The Saudi Arabian government holds about 90% of Aramco's shares, and another 8% is held by the sovereign wealth fund. The VC fund is one lever that the kingdom can use to help diversify.
- Saudi Arabia's economy runs off of its oil exports, but in a future where global oil consumption could slow down, the kingdom needs other options.
- In 2021 Saudi Arabia pledged to reach net zero emissions of greenhouse gases by 2060.
- The kingdom has been attracting climate tech companies like electric vehicle company Lucid, Korean auto giant Hyundai, and solar company GlassPoint to the region for investment and domestic manufacturing.
