$250 million boost for regional start-ups as Mubadala announces funding programme
▶ Abu Dhabi’s strategic investment company says it is time to apply global experience to the home market
Mubadala Capital launched $250 million (Dh918m) in funds to back regional startups yesterday.
The company said its Mena tech funds include a $150m “fund of funds” programme that will invest in 15 venture funds committed to backing companies supporting Abu Dhabi’s Hub71 ecosystem and $100m that will make direct investments into 15 early stage technology companies. The company already has investments in the US via $600m of commitments made in 2017 and in Europe via a $400m tech fund launched last year. It also has investments in China.
“After 10 years of investing in tech companies around the world, the time has come to leverage the experience and expertise we’ve gained for the benefit of our home market,” said Ibrahim Ajami, head of ventures at Mubadala Capital.
“The Mena funds will drive the economic development of Abu Dhabi by stimulating tech investment activity. There is a huge amount of untapped potential in the UAE and the wider region and we are on the right path to foster more home-grown innovations, attract exceptional talent and accelerate the evolution of a flourishing tech industry in the emirate.”
The first investment from the Mena tech fund was in Bayzat, one of the first companies to set up in Hub71. It helps small and medium-sized companies automate key business functions. It has just raised $16m in Series B funding from regional and global investors including Mubadala Capital and Point72 Ventures.
Mahmoud Adi, chief executive of Hub71, said the fund’s launch would have a huge effect on the region’s start-up scene.
“It is a historical moment for the entire industry and the impact will be seen in the short, medium and long term where we will see a lot more founders, a lot more deals happening and also companies going global from the region.”
Eighteen companies operate from Hub71, a number expected to grow to about 25 by the end of the year.
Mubadala Capital unveiled $250 million (Dh918.29m) in tech funds yesterday to invest in the region’s growing startup scene and enhance the UAE capital’s status as a tech and innovation hub.
The Mubadala Mena tech funds include a $150m “fund of funds” programme that will invest in 15 ventures committed to supporting Abu Dhabi’s Hub71 ecosystem. Another $100m fund was set aside for direct investments in early stage tech companies in either enterprise or consumer sectors.
“After 10 years of investing in tech companies around the world, the time has come to leverage the experience and expertise we’ve gained for the benefit of our home market,” Ibrahim Ajami, head of ventures at Mubadala Capital, said yesterday.
“The Mena funds will drive the economic development of Abu Dhabi by stimulating tech investment activity. There is a huge amount of untapped potential in the UAE and the wider region and we are on the right path to foster more homegrown innovations, attract exceptional talent and accelerate the evolution of a flourishing tech industry in the emirate.”
Mubadala Capital is the financial investment unit of Abu Dhabi’s strategic investment arm, Mubadala Investment Company.
It invests in venture capital, as well as private and public equities. Its fund of funds will commit to three ventures as part of its first endowments cohort – Data Collective Venture Capital in San Francisco, Middle East Ventures Partners and Global Ventures.
Mubadala Ventures is already investing in the US, using capital from three existing money pool including a $400m direct fund and a $200m fund of funds programme. It has also committed $15bn to SoftBank’s first iteration of its Vision Fund.
Last year, the company launched a $400m fund to invest in European tech companies and started Hub71 in Abu Dhabi Global Market, the emirate’s international financial centre, to encourage early stage start-ups to set up shop in the capital.
At the FinTech Abu Dhabi Investor Forum yesterday, Mr Ajami said Mubadala has invested in 20 tech companies and 16 venture capital funds via its US commitments and in two companies and three funds in Europe.
It has also made investments directly and via funds into Chinese ventures. “We are not looking for a company that is just going to build product that serves Abu Dhabi or the region, we are looking for companies that have potential to grow globally,” he said.
The first investment from Mubadala Capital’s new direct fund is in Bayzat, a Dubai start-up that helps small and medium-sized companies automate key business functions such as HR administration, payroll processing and health insurance.
Bayzat, one of the first companies to set up in Hub71, raised $16m in Series B funding from regional and global investors including Mubadala Capital and Point72 Ventures. The company has raised a total of $31m and plans to use the capital to invest in its technology and customer experience.
Mahmoud Adi, chief executive of Hub 71, said the funds’ launch would have a “massive” impact on the start-up segment in the region.
“It is a historical moment for the entire industry and the impact will be seen in the short, medium and long term where we will see lot more founders, a lot more deals happening and also companies going global from the region.”
There are currently 18 startups operating from Hub 71 and by the end of the year, 20 to 25 companies are expected to be based at the facility, Mr Adi said.
He added that WeWork, which announced plans to open its first UAE facility in Hub71 earlier this year, “will be up and running and operational in January”.
A $150m ‘fund of funds’ programme will invest in 15 ventures committed to supporting Abu Dhabi’s Hub71 ecosystem