Elon Musk has secured $7bn from new investors for his $44bn takeover of Twitter.
The 19 contributors supporting the billionaire’s deal include Larry Ellison, co-founder of Oracle and Tesla board member, who is pledging $1bn.
The Qatar state investment fund is putting up $375m, while Binance, the world’s biggest cryptocurrency exchange, is pitching in $500bn, according to a regulatory filing.
There has previously been some uncertainty about how Musk, the chief executive of electric car maker Tesla and rocket company SpaceX, would finance the planned buyout.
Although he is the world’s richest person, much of his wealth is tied to the value of Tesla.
He has said he will pay for the deal with a mix of loans, investments and cash.
Musk is expected to use about $8bn from his recent sale of Tesla shares, as well as $13bn in bank loans.
He is also borrowing against his Tesla holdings.
Thanks to the new $7bn commitment, he will be able to reduce his debt from $12.5bn to $6.25bn, according to a regulatory filing.
He later said he would not sell any more Tesla shares, which have seen their value drop 15% in the past month.
What changes do the new investors want to see?
Musk will also become Twitter’s temporary chief executive after the deal closes, according to a source familiar with the matter.
He is in talks with others for extra funding, including former Twitter chief executive Jack Dorsey.
Mr Dorsey is the tech giant’s second-largest individual stakeholder, after Musk.
The Saudi Arabian investor Prince Alwaleed bin Talal has agreed to put his $1.77bn stake in Twitter into the deal rather than cash out, the filing showed.
He said Musk would be an “excellent leader” for the site despite having previously been against the buyout.
Sequoia Capital, a Silicon Valley venture capital giant, will provide $800m, while another $700m is coming from VyCapital, a Dubai-based investment group.
Binance chief executive Changpeng Zhao framed his investment as a move towards “Crypto Twitter” and said it was a “small contribution to the cause”.
“We hope to be able to play a role in bringing social media and web3 together and broadening the use and adoption of crypto and blockchain technology,” he said.
Technology venture capitalist Ben Horowitz said his firm, known as Andreessen Horowitz or a16z, is putting in $400m because it believes in Musk’s “brilliance to finally make it what it was meant to be”.
“While Twitter has great promise as a public square, it suffers from a myriad of difficult issues ranging from bots to abuse to censorship,” he said.
“Being a public company solely reliant on an advertising business model exacerbates all of these.”
There has been a lot of speculation about how Musk could change the platform.
He has said a “slight cost” could be imposed for governments and commercial entities.
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Why is Elon Musk buying Twitter?
In tweets that were subsequently deleted, Musk suggested changes to the Twitter Blue premium subscription service, including slashing its price, banning advertising and giving an option to pay in the cryptocurrency dogecoin.
In addition to railing against Twitter’s alleged curbs on free speech, he has spoken of a desire for new features to enhance the user experience while also boosting trust by authenticating all users as humans as part of a bid to crack down on spam bots.
Wedbush analyst Dan Ives said Musk’s deal had a 75% chance of closing before the new funding but is now 90% to 95% likely to succeed.
He said the new backers are a “who’s who” list of Wall Street and Silicon Valley investors and show “that it’s not Musk single-handedly trying to turn around Twitter”.
If Musk were forced to walk away from the deal he would be hit with a $1bn termination fee.
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