Abu Dhabi's Group 42 launches $10B fund to invest in 'high-growth' tech startups

EMERGING TECH

Abu Dhabi-based artificial intelligence firm Group 42, which is backed by Mubadala Investment Co. and Silver Lake Technology Management LLC, is setting up a new, $10 billion fund focused on technology investments in emerging markets.

The G42 Expansion Fund will partner with the Abu Dhabi Growth Fund, which was set up by Abu Dhabi’s state-controlled Abu Dhabi Developmental Holding Company PJSC last year. It will be controlled by a new business unit within G42 and target late-stage growth companies building disruptive technologies, the company told Bloomberg Wednesday.

The idea is to operate as a private equity investor, and a significant portion of the $10 billion funds will be earmarked for “high-growth regions” and fields such as communications, renewables, intelligent mobility, digital infrastructure, life sciences and healthcare.

The initiative is part of Abu Dhabi’s plans to reinvest its oil wealth into the technology sector as a way of diversifying its economy, which is largely based on fossil fuels.

G42 already has significant investments that span energy, healthcare and autonomous vehicles. For instance, last year it teamed up with China’s Sinopharm Ltd. on a joint venture to manufacture COVID-19 vaccines overseas. G42 was also the first Emirati-based firm to open an office in Israel. That followed the normalization of ties between the United Arab Emirates and Israel in 2021, and led to the rollout of the first driverless car technology trials in the Middle East.

G42 Chief Executive Peng Xiao said in a statement that the company wants to “accelerate its global impact.” He added that it will do this not only by deploying capital, but also by providing access to its networks, management and the operational assets of its portfolio companies.

Mubadala, which controls a larger, $280 billion fund, is said to own a minority stake in G42. However, it has stepped away from technology-focused investments itself, as many investors now see the sector as being somewhat risky and overpriced. As for U.S.-based Silver Lake, it invested in G42 last year, and its co-CEO Egon Durban sits on the company’s board of directors.

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