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Abu Dhabi, UAETuesday 19 June 2018

Mubadala sets up VC arm to oversee $15bn Softbank tech investment, two funds

The Abu Dhabi strategic company's new unit will be based in the US

Mubadala agreed this year to co-invest in Softbank’s $100bn technology fund, alongside the Public Investment Fund, Saudi Arabia’s sovereign wealth fund, Apple, Foxconn and Qualcomm, among others. Issei Kato / Reuters
Mubadala agreed this year to co-invest in Softbank’s $100bn technology fund, alongside the Public Investment Fund, Saudi Arabia’s sovereign wealth fund, Apple, Foxconn and Qualcomm, among others. Issei Kato / Reuters

Mubadala Investment Company, Abu Dhabi’s strategic investment firm with US$127 billion in assets, said on Wednesday it had set up a venture capital arm that will oversee its US$15bn commitment to Japan’s Softbank Vision Fund and two other funds.

Mubadala agreed this year to co-invest in Softbank’s $100bn technology fund, alongside the Public Investment Fund, Saudi Arabia’s sovereign wealth fund, Apple, Foxconn and Qualcomm, among others.

“Mubadala’s venture capital business intends to become an active member of the ventures community, leveraging Mubadala’s global scale and power,” said Ibrahim Ajami, head of the ventures unit at Mubadala.

“Our differentiators include a long-term partnership mindset, access to Mubadala’s portfolio of global assets across 13 sectors and our strategic partnership with SoftBank.”

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The company’s venture capital arm, which will be based in the US and will be the company’s first office in the country, will also oversee Mubadala Ventures Fund I, a $400 million early growth venture capital vehicle with two main investors, Mubadala and Softbank, that will aim to have a portfolio of 25 companies in North America and Europe.

The second $200m Fund of Funds will invest in established and emerging fund managers, with investments ranging between $50m to $70m a year in US and European venture capital funds.

“We are excited to partner with Mubadala and invest in their first venture capital fund,” said Rajeev Misra, chief executive of the SoftBank Vision Fund. “Mubadala is a strategic partner to SoftBank, and this initiative will be an important part of the Vision Fund’s ecosystem of companies and entrepreneurs. Mubadala’s approach to venture capital and their San Francisco office indicates a long-term commitment to the technology community.”

The venture capital unit will be part of Mubadala Capital, the company’s financial investment arm that manages more than $10bn in assets across its portfolio.

This is not Mubadala’s first foray into technology.

It began investing in the sector in 2007 with an investment in semiconductor maker Advanced Micro Devices.

Its other tech investments include GlobalFoundries, a semiconductor manufacturer, satellite company Yahsat, and a stake in Dubai telecom operator du.

“We are looking at companies that will transform major industries around the globe. In line with our company’s values and our portfolio strategy, we want to be a real partner to entrepreneurs and founders as they grow their companies globally,” said Mr Ajami. Mubadala, which has merged with strategic firm International Petroleum Investment Company (Ipic), swung to a profit in the first half of this year on the back of strong operating income, gains from financial investments and favourable currency movements.

The company, which reported its first independent interim results after the merger, said the first-half profit stood at Dh4.2bn compared with a loss of Dh4.7bn a year earlier.