Abu Dhabi state investor Mubadala sets up venture capital arm

Abu Dhabi’s state fund Mubadala Investment Company said it has launched a venture capital arm that will oversee an early growth fund set up with Japan’s SoftBank, and a fund of funds focusing on emerging fund managers.

A ventures investment team will be based in San Francisco, the first Mubadala office in the United States, it said in a statement on Wednesday.

The team will also oversee and manage Mubadala’s $15bn commitment to the SoftBank Vision Fund, working in close partnership with SoftBank executives in California.

Earlier this year, Japan’s SoftBank, Saudi Arabia’s main sovereign fund, and Mubadala became investors in a private equity fund that had raised over $93bn. Other partners in the fund were Apple Inc, Qualcomm, Taiwan’s Foxconn Technology and Japan’s Sharp Corp.

“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.

Mubadala Ventures Fund I, a $400m early growth venture capital fund, has been setup jointly by Mubadala and SoftBank with a major focus on the technology sector.

The fund plans to invest in founder-led companies, focusing on series A and beyond, with the goal of building a portfolio of 25 companies in North America and Europe.

Mubadala is also setting up a $200m ventures fund of funds that will invest in both established and emerging fund managers.

Under this programme, Mubadala intends to invest $50m to $70m per year in US and European-based venture capital funds, it said.

“Mubadala’s approach to venture capital and their San Francisco office indicates a long-term commitment to the technology community,” Rajeev Misra, CEO of the SoftBank Vision Fund, said in a statement.

The venture capital initiative builds on a decade of investments Mubadala has made in the technology sector, beginning in 2007 with a significant stake in Advanced Micro Devices.

Mubadala, which had assets of Dhs465.5bn ($126.8bn) at the end of June, said earlier this year the firm was lining up new overseas investments in 2017.