Mubadala introduces two funds worth $250 million for MENA startups
Priya Wadhwa
What's the Deal

Mubadala introduces two funds worth $250 million for MENA startups

Announces first investment in Bayzat’s $16M Series B.

At the opening of Abu Dhabi FinTech festival on Monday, 21 October, Mubadala Capital — the financial investment arm of Mubadala Investment Company — announced the launch of two new funds to strengthen the startup ecosystem in the capital city.

The first is a $150 million (AED 55mn) ‘fund of funds’ that will invest in funds supporting Abu Dhabi’s Hub71 ecosystem of startups and investors. The other, a $100 million (AED 367mn) fund, has been set for direct investment in startups.

The MENA funds will drive the economic development of Abu Dhabi by stimulating tech investment activity. There’s 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.
Ibrahim Ajami, head of Ventures at Mubadala Capital

The funds will focus on tech startups in the region, especially in Hub71 Abu Dhabi.

MENA’s startup ecosystem has been increasingly gaining attention from regional as well as international investors.

Abu Dhabi’s interest in startup ecosystem

Abu Dhabi is serious about strengthening its startup ecosystem in a bid to diversify from its dependency on oil.

In 2019 alone, Abu Dhabi has made multiple advances to this effect, from the launch of Hub71 and Ghadan 21, to pledging AED 535 million to fund startups, subsidizing set-up and operating costs including health insurance, licensing and office rent. Abu Dhabi’s FinTech festival also went on an international tour to attract startups from around the world to expand to the capital and set-up regional operations.

“A core part of our offering are the incentive programs that lower the cost of doing business for them as well as, at the same time, providing them connectivity within the region,” said Mahmoud Adi, CEO of Hub71 in an interview with CNBC.

After international experience of investing in startups in more developed economies, Mubadala is leveraging its expertise in catering to Abu Dhabi’s vision to strengthen its economy.

Bayzat raised $16 mn Series B

Along with the announcement of the launch of the funds, Mubadala also revealed that the first investment of its funds had contributed to Bayzat’s $16 million Series B.

The round saw the participation of Point72 Ventures along with Mubadala Capital.

The HR and insurance technology startup was one of the first to set-up in Abu Dhabi’s Hub71. It’s total funding now stands at $31 million.

Multiple governments in the MENA region have state-backed funds to support startup ecosystems. DIFC’s $100 million fund, Bahrain’s Al Waha fund of funds, and Saudi Arabia’s SVC are just some examples.
Traditionally, Dubai has been a popular location for startups to set base. However, Abu Dhabi’s feats in strengthening its startup and investment sectors is increasingly attracting startups from across the region as well as those from other regions. This trend is likely a response to its funds, incentives and subsidies launched this year. We’re excited to see how this plays out in the coming 10 years.