Mubadala launches $400m European tech fund with Japan’s SoftBank

The fund will enable early stage UK and European startups to grow in Abu Dhabi and the Middle East

The fund will be managed by the Abu Dhabi fund’s venture capital arm, Mubadala Ventures, with SoftBank participating via its investment subsidiary SIMI US Holdings. AP Photo/Shizuo Kambayashi

Abu Dhabi's strategic firm Mubadala Investment Company is partnering with Japan's SoftBank Group to launch a $400 million (Dh1.47 billion) fund that will target investment in European technology companies.

“We believe the UK is a very strong market for future technology innovation and entrepreneurship,” Waleed Al Muhairi, deputy group chief executive and chief executive of alternative investments and infrastructure at Mubadala, said in an emailed statement on Wednesday.

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

The fund will be managed by the Abu Dhabi fund’s venture capital arm, Mubadala Ventures, with SoftBank participating via its investment subsidiary SIMI US Holdings.

In October, Mubadala, which manages more than $200 billion in assets, announced the launch of a venture capital arm to oversee its $15bn commitment to Softbank’s Vision Fund, as well as two other funds.

Mubadala joined Saudi Arabia’s sovereign wealth fund, the Public Investment Fund in co-investing in the $100bn Softbank fund, along with Apple, Foxonn and others global players.

Mubadala's newly set up tech fund will work closely with "early stage UK and other European funds," the company said. The VC arm will also expand its "fund of funds programme" to invest in both established and emerging asset managers across Europe, it added.

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“We see strong potential in the European tech ecosystem with an array of dynamic, founder-led companies seeking funding and support from a committed partner,” said Mubadala Ventures head Ibrahim Ajami.

“Mubadala has the global network of large assets and relationships and a partner mindset to accelerate the development of Europe’s high-growth tech companies,” he added.

The new "fund of funds" will allow for European tech companies to establish base in Abu Dhabi with a view to expand operations in the wider Gulf and Middle East markets.

SoftBank, which recently announced ex-Deutsche Bank executive Faisal Rahman as its new Middle East and North Africa head, sees possible synergies with companies in Europe.

“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.

Mubadala's VC arm, which is based in San Francisco, is part of Mubadala Capital, the company's financial investment unit that manages more than $10bn in assets across its portfolio.

Mubadala has made earlier forays into tech, with an investment in 2007 in US semiconductor maker Advanced Micro Devices. Its other tech investments include GlobalFoundries, another semiconductor manufacturer, satellite company Yahsat and a stake in Dubai telecom operator du.