Softbank Investment Advisers says “number one goal” of new office is to bring portfolio companies to the region
The head of investment giant Softbank’s new Middle Eastern offices has said that its new regional bases in Abu Dhabi and Riyadh will be used to bring some of the portfolio companies within its $100 billion Softbank Vision Fund to the region.
“We’re working very closely with Mubadala in Abu Dhabi and also with the PIF [Public Investment Fund] in Saudi Arabia to bring our portfolio companies, where relevant, to the region so that they can actually set up local and regional businesses here,” Faisal Rehman, the new Middle Eastern regional office head for Softbank Investment Advisers said at the Fintech Abu Dhabi conference on Monday.
“There are a number of our companies that have globally scalable models that are being evaluated by both Mubadala and the PIF for regional set-ups. Our offices are here to facilitate that transition for those companies and set them up here. That’s goal number one for us,” Rehman said.
Abu Dhabi’s Mubadala made a $15 billion commitment to the $100 billion Softbank Vision Fund run by Japanese technology company Softbank in May last year, while Saudi Arabia’s PIF was the fund’s biggest investor, with a $45 billion commitment. Other investors include technology companies Apple, Foxconn, Qualcomm and Sharp Corporation.
The Softbank Vision Fund holds investments in ride hailing firms Uber and Didi Chuxing, as well as in General Motors’ autonomous vehicle unit, Cruise, and in the technology-driven offsite construction company Kanterra, which bought a majority stake in the KEF Infra business owned by Dubai-based KEF Holdings in June this year.
Rehman said that as well as bringing portfolio companies to the region, another aim was to “create awareness amongst our own ecosystem about what investment propositions are available in this region”.
He said that the region has “a young population, and entrepreneurship is in the DNA, so we’ve got the basic ingredients over here of a very vibrant start-up industry”.
However, he also acknowledged that “I think there needs to be far more investible opportunities coming out of this region that can be scaled globally”.
Munish Varma, a partner with Softbank Investment Advisors, said that what it was seeking from investee firms were “fast-growing companies, that are run by management teams that have all the strategic visions and that are fundamentally using tech to alter how industries are run”.
He added that it also sought management teams with a long-term vision of transforming an industry, “because we tend to be partners for a long period of time”.
Bringing it all back home
Speaking on a later panel at the same event, Mubadala Capital’s head of venture capital, Ibrahim Ajami, said that it had been investing in technology firms globally (it opened a San Francisco arm in October last year and announced a $400 million European technology fund in June).
He said that the mandate for all of these outbound activities, including its investment in the Softbank Vision Fund, was to earn a financial return but “as we look at all of these outbound activities, the question that we were asked around a year ago was, ‘how do we leverage all of these connections, all these networks, all of these ideas, the relationships with the founders?’”
He added that “in the next six months you will see Mubadala come out with a series of announcements” about creating an infrastructure to help bring some of the 250 start-ups it has invested in through various platforms to the region.
“Not just because we want to bring great companies here. We want to do that, because when you bring founders, you bring ideas, you bring talent, it starts feeding the ecosystem,” Ajami said. “What we need is more talent here.”