Abu Dhabi sovereign wealth fund deploying its billions defying tech rout

LONDON (BLOOMBERG) – An Abu Dhabi sovereign wealth fund is fast emerging as a white knight for tech firms seeking funds in a volatile market.

Mubadala Investment, the US$284 billion (S$399.8 billion) state-owned fund, is defying a rout in technology valuations and becoming a go-to investor in a sector where fortunes have turned overnight. The investor backed raises this week for both Klarna Bank and Wefox.

Mubadala is committing its capital at a time its owner, the Abu Dhabi government, benefits from a surge in oil prices driven mainly by the war in Ukraine. The Gulf fund is stepping in to invest in technology-focused businesses just as other investors turn away from what they see as risky and potentially overpriced assets.

“As a long-term investor, Mubadala continues to deploy capital opportunistically across a range of key sectors,” a spokesman for the fund said.

It led the latest funding round for German insurance-technology firm Wefox, which raised US$400 million at a valuation of US$4.5 billion this month. The fund also came in as a new investor in the US$800 million raise by Klarna, the buy-now-pay-later giant, that saw its valuation plunge to US$6.7 billion from the US$45.6 billion achieved last year.

Mubadala’s first major foray into technology was when it emerged as one of the key backers to SoftBank Group’s US$100 billion Vision Fund a few years back. Mubadala is now exploring whether to back Mr Rajeev Misra, the main architect of the Vision Fund, as he seeks to start his own fund, the spokesman said.

More recently, Mubadala led an US$768 million funding round for Turkish grocery delivery app Getir in March at a valuation of US$11.8 billion. The fund also participated in a US$300 million raise for payments business SpotOn, which valued the company at about US$3.6 billion. It also led a US$100 million round for Swedish fintech firm Juni last month.

Another key focus area for the Mubadala has been healthcare, where the fund has been stepping up its investments. Buyout firm EQT and Mubadala agreed to buy Swedish medical freight company Envirotainer for an enterprise value of about €2.8 billion (S$3.97 billion) last month. Mubadala teamed up with another investment firm, Warburg Pincus, on a more than US$2 billion deal for Informa’s pharma analytics unit reached in February.