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The Japanese conglomerate SoftBank and Mubadala, Abu Dhabi's State Investment Corporation, has a tightly knit relationship, and this is one of the relationships we are strengthening further. According to the Financial Times, SoftBank has just committed half the capital for a new $ 400 million Mubadala fund to support European startups.
Industry observers may recall that Mubadala had committed $ 15 billion to the huge SoftBank Vision Fund when it was created in 2017. Shortly after, Mubadala opened an office in San Francisco and has structured a $ 400 million fund designed to invest in start-up startups. to which SoftBank has committed capital.
The pact was understandable, not least because the Mubadala seed fund could theoretically give SoftBank a better idea of what happens in companies whose trajectory is earlier than what SoftBank usually considers. This decision was also intended to allow Mubadala to better manage the sums it has incurred in SoftBank.
The new fund, however, seems to raise questions. At least, the FT notes that the timing is "unusual", given that SoftBank is currently struggling with a gross debt of $ 154 billion. The new fund "also increases the possibility that Mubadala's influence on the Vision Fund will grow by allowing it to shape SoftBank's technology investments," as suggested by the FT sources.
SoftBank may not have much choice but to work more and more closely with Abu Dhabi. As the company's president, Masayoshi Son, said earlier this month, the Vision Fund has spent about $ 50 billion on about $ 99 billion in capital. Given the speed with which she invests (she just spent nearly $ 1 billion on a business last week), her remaining funds might not last until 2020.
At the same time, it is unclear whether SoftBank enjoys the solid relationship it once had with the largest lead investor in the Vision Fund, the Kingdom of Saudi Arabia, which provided SoftBank with a $ 45 billion commitment. dollars for its current fund, which SoftBank relied heavily on. to be his biggest supporter in a second Vision fund.
On Oct. 3 last year, Bloomberg reporters met with Saudi Crown Prince Mohammed bin Salman (or MBS). The latter had announced plans to invest an additional $ 45 billion in SoftBank. What few people knew then was that five days earlier, journalist and Saudi regime critic Jamal Khashoggi had disappeared after visiting the Saudi consulate in Istanbul. As questions and concerns began to arise over MBS's involvement in the disappearance, many business leaders canceled plans to travel to Riyadh, where Saudi Arabia organized a conference on investment in the country. mid-October. His was among them, even as he was trying to protect himself by visiting MBS in Riyadh the night before the event.
It remains to be seen whether this movement has angered MBS. It is also unclear whether the CIA's possible findings that MBS ordered the killing of Khashoggi, or the unflattering attention paid to Saudi Arabia because of the murder, have consequences for SoftBank, which is able to invest its capital.
His son, for his part, declined to say earlier this month whether he would consider taking more money from Saudi sources – which may be telling.
Meanwhile, Mubadala, which would use its new fund to trade between $ 5 million and $ 30 million, will send its European startups huge sums.
Like the San Francisco-based Mubadala team, the idea seems to be to act as a funnel for SoftBank's Soft Fund, which the Mubadala team sees as the most promising in its portfolio.
Mubadala's European venture capital fund will be managed by a new office in London, which is expected to open this spring. The Vision Fund currently has its headquarters in London, another office in San Francisco and, soon, offices in Shanghai, Beijing and Hong Kong.
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