Mubadala buys minority stake in UK fibre optic firm

Hyperoptic has connected 500,000 properties across 30 UK cities

Mubadala is one of the largest investors in SoftBank’s Vision Fund – it pledged $15bn to the technology fund last May. Bloomberg

Abu Dhabi’s strategic investment firm Mubadala Investment Company, which manages $226 billion in assets, bought a minority stake in Hyperoptic, the UK’s largest fibre optic broadband provider, for an undisclosed amount.

The London company has connected 500,000 properties across 30 UK cities to its fibre optic network so far, bringing high speed broadband internet directly into homes and offices via a proprietary cable.

“We are excited to be joining the Hyperoptic team, providing substantial capital and balance sheet power as support for their clear vision for the future of the UK telecom market,” said Mounir Barakat, executive director of Mubadala ICT in a statement.

He will join the company’s board as an observer once the transaction is finalised.

Mubadala, which invests globally across 13 sectors, is central to Abu Dhabi’s efforts to diversify its economy away from oil. Mubadala is one of the largest investors in SoftBank’s Vision Fund – it pledged $15bn to the technology fund last May as part of a strategy to increase investments in high-growth sectors, such as technology.

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Founded in 2011, Hyperoptic had raised $546.6 million prior to its Mubadala announcement. Its lead investor is George Soros’s Quantum Strategic Partners fund.

The company has ambitions to reach 2 million homes by 2021, deploying about $658 million over the next three years to build the network, according to the company. Its initial deadline was 2022 but following its successful debt funding last summer, Hyperoptic said it can get the job done one year sooner. Its next goal of reaching five million homes by 2024 would be the equivalent to a fifth of households in the UK.

The initial cities in its expansion plans include Greater London, Manchester, Glasgow, Edinburgh, Liverpool and Leeds in 2019.  A further 10 cities to be covered in 2020 will be announced in the second half of 2019, it said.

In June, Mubadala announced plans to create a $400 million fund managed by Mubadala Ventures, its venture capital arm, to invest in European technology companies, with Japan's Softbank as a strategic investor in the fund.

Its other investments in information and communication technology include Al Yah Satellite Communications Company, which brings internet to several regions around the world, Injazat Data Systems, a Middle East cloud provider, and telco du.

Currently, only five per cent of UK homes have access to high-speed internet via fibre optic cable. By comparison, the UAE, which ranks first in the world, covers 94.3 per cent of homes, according to a 2018 report by the FTTH Council. The robust fibre optic network is the bedrock of the country’s digital transformation strategy, providing high-speed internet to nearly all residents.