Mubadala expands venture capital business to Europe

Mubadala Ventures was founded in October 2017, and is based out of San Francisco. (Courtesy of Mubadala)
Updated 13 June 2018
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Mubadala expands venture capital business to Europe

  • SoftBank to be key investor in $400 million fund targeting fast-growing tech firms in UK and Europe
  • European fund is first expansion of newly-founded Mubadala Ventures

LONDON: Mubadala Investment Company is expanding its tech investment strategy to Europe, with the launch of a new $400 million fund to invest in the continent’s “high growth technology companies with global scale and impact.”

The new initiative, announced on Wednesday at London Tech Week, is the first significant expansion of the Abu Dhabi sovereign wealth fund’s venture capital arm, Mubadala Ventures, and deepens its collaboration with Japan’s SoftBank.

The $400 million fund will work closely with early-stage UK and other European funds to invest in “both established and emerging fund managers across the continent,” Mubadala said in a statement.

Mubadala Ventures will also facilitate the process for European tech companies to establish operations in Abu Dhabi to target the Gulf and Middle East markets, via a European fund of funds and a direct funding strategy.

SoftBank, a key investor in a US-focussed $400 million fund established last year, will participate in the new European fund via its SIMI US Holdings I, Inc. investment subsidiary.

“Mubadala’s investment approach is based on partnership and this is exemplified through the strong working relationship we have established with the SoftBank Group,” said Waleed Al-Muhairi, CEO of alternative investments and infrastructure at Mubadala.

“The launch of a $400 million fund to support the growth of pioneering entrepreneurs complements Mubadala’s global portfolio of investments across the full spectrum of the tech sector.”

Mubadala established Mubadala Ventures — based in San Francisco — last October, creating a vehicle to oversee its $15 billion commitment to SoftBank’s Vision Fund, alongside the $400 million Mubadala Ventures Fund I and a $200 million fund of funds.

“The UK and Europe has some of the world’s most exciting startups and we would like to see more companies accelerate through the startup stage to achieve sustained growth at a global level,” said Ron Fisher, director and vice chairman of SoftBank Group.

The UAE and Saudi Arabia have targeted investments in fast-growing international technology companies as part of their economic diversification strategies in a bid to lessen their economies’ reliance on oil revenues.

Mubadala and Saudi Arabia’s Public Investment Fund are among the largest contributors to SoftBank’s Vision Fund, the world’s largest private equity investment vehicle. The fund’s recent investments include a $2.25 billion injection into GM Cruise, the car giant’s autonomous driving unit, and a $5 billion stake in US chipmaker Nvidia.

Mubadala’s own tech invesmtents include stakes in semiconductor-makers AMD and Globalfoundrues, Abu Dhabi-based YahSat, and UAE-based telco du.

The fund’s deepening involvement in the venture capital sector will provide a boon to international startups, according to Dany Farha, co-founder and CEO at Dubai-based BECO Capital.

“Deep and patient capital is required as the lifeblood at all levels of the innovation lifecycle for there to be the appropriate incentives in place to mobilize innovators and entrepreneurs,” Farha told Arab News.


OPEC oil ministers gather to discuss production increase

Updated 19 June 2018
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OPEC oil ministers gather to discuss production increase

  • Analysts expect the group to discuss an increase in production of about 1 million barrels a day
  • The officials were arriving in Vienna ahead of the official meeting Friday

VIENNA: The oil ministers of the OPEC cartel were gathering Tuesday to discuss this week whether to increase production of crude and help limit a rise in global energy prices.
The officials were arriving in Vienna ahead of the official meeting Friday, when they will also confer with Russia, a non-OPEC country that since late 2016 has cooperated with the cartel to limit production.
Analysts expect the group to discuss an increase in production of about 1 million barrels a day, ending the output cut agreed on in 2016.
The cut has since then pushed up the price of crude oil by about 50 percent. The US benchmark in May hit its highest level in three and half years, at $72.35 a barrel.
Upon arriving, the energy minister of the United Arab Emirates, Suhail Al Mazrouei, said: “It’s going to be hopefully a good meeting. We look forward to having this gathering with OPEC and non-OPEC.”
The 14 countries in the Organization of the Petroleum Exporting Countries make more money with higher prices, but are mindful of the fact that more expensive crude can encourage a shift to renewable resources and hurt demand.
“Consumers as well as businesses will be hoping that this week’s OPEC meeting succeeds in keeping a lid on prices, and in so doing calling a halt to a period which has seen a steady rise in fuel costs,” said Michael Hewson, chief market analyst at CMC Markets UK
The rise in the cost of oil has been a key factor in driving up consumer price inflation in major economies like the US and Europe in recent months.
Already US President Donald Trump has called on OPEC to cut production, tweeting in April and again this month that “OPEC is at it again” by allowing oil prices to rise.
Within OPEC, an increase in output will not affect all countries equally. While Saudi Arabia, the cartel’s biggest producer, is seen to be open to a rise in production, other countries cannot afford to do so. Those include Iran and Venezuela, whose industries are stymied either by international sanctions or domestic turmoil. Iran is a fierce regional rival to Saudi Arabia, meaning the OPEC deal could also influence the geopolitics in the Middle East.