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Abu Dhabi’s Mubadala weighs investment in second SoftBank Vision Fund

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The original $100 billion Vision Fund holds stakes in Uber Technologies, which has struggled in the public markets and WeWork, the office leasing start-up that was recently forced to pull its plans for an initial public offering.

Wednesday 09, October 2019

Mubadala Investment Company, which committed $15 billion to SoftBank Group’s Vision Fund, is yet to decide whether to invest in SoftBank’s second large-scale tech investment fund, reported Bloomberg.

Ibrahim Ajami, Mubadala’s Head of Ventures, said that the Abu Dhabi sovereign wealth fund is still evaluating its options, but will continue working with SoftBank.

WeWork, which was valued at $47 billion in a funding round earlier this year but was likely to fetch only about a quarter of that in a listing, is one company of many in the $100 billion fund, said Ajami.

“We invested in a fund which is a portfolio of companies versus one company and we are very focused on the performance of Vision Fund 1, WeWork is a five per cent holding in Vision Fund 1,” said Ajami.

Industrywide, Ajami said that fears over high tech valuations are overblown, adding that the backlash to companies with the unicorn label—start-ups valued at $1 billion or more—is silly.

“All of the sudden, there is this perspective where unicorns are bad and everybody should not use the word unicorns, if you have a business with strong management and a clear strategy and you’re executing, the public markets will reward you for that,” added Ajami.

Mubadala started a $400 million European fund focusing on tech investments, adding to the billions it has spent to diversify the emirate’s wealth beyond oil.

Instead of shying away from unicorns, prospective investors should focus on a return to fundamentals, Ajami said. SoftBank managing partner Saleh Romeih agreed. A period of “immense liquidity” has lead to some companies being overvalued, and investors must have a path to profitability, Romeih said.

Saleh Romeih, SoftBank Managing Partner, said, “In the beginning, the ambitions and vision of Masayoshi Son outgrew the balance sheet of SoftBank, the fund was a better vehicle to express that vision.”

SoftBank is struggling to attract investment to a second mammoth fund, with Vision Fund portfolio company WeWork pulling its initial public offering and valuations at other key investments falling.

 

TAGS : Mubadala Investment Company, SoftBank Group, unicorns, Vision Fund 1, Masayoshi Son, Uber Technologies , WeWork

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