Mubadala, Abu Dhabi's State Investor, Follows Strategy of Restructurings, Leadership Changes, and Mergers to Recover Billions Invested in European Start-Ups. This Occurs Against the Backdrop of Sharply Decreased Valuations of These Start-Ups, Four Years After the Fund Increased Its Investments in the Region. Individuals Familiar with the Strategy Report That These Measures Have Unsettled the Close-Knit European Start-Up Community.
Here is the translated heading:
"Ibrahim Ajami, Mubadala's venture chief, put pressure on the German insurance start-up Wefox, leading to its CEO Julian Teicke stepping down in March, two years after the fund led a financing round with a valuation of $4.5 billion. 'Prepare yourself,' Ajami allegedly told Teicke at the time, adding that Teicke 'would feel the power of a sovereign wealth fund' after accepting money from Mubadala, according to two informed persons.
A Mubadala Capital manager stated that the fund "remains committed to working constructively with management and other shareholders to ensure that our portfolio companies are sustainably positioned," despite the challenges in the venture capital sector. Teicke declined to comment.
In recent weeks, Mubadala has considered a sale of Wefox and led a restructuring of the Turkish food delivery platform Getir. The fund has invested around 80 million dollars in Wefox and almost a billion dollars in Getir. “They are really trying to be a respected investor in Europe,” said a person who has worked with Mubadala. “But their approach is very reckless.”
Certainly! Here is the translated heading in English:
"Ajami, who oversaw Mubadala's European push, is now under pressure himself and has relinquished at least one of his board positions. Mubadala Investment Company was formed in 2017 through the merger of two Emirati state groups. The subsidiary Mubadala Capital, which includes the Venture Capital unit, manages assets of approximately 20 billion dollars.
Europe is the most active region for venture deals by Mubadala Capital after North America. According to PitchBook data, the investor has participated in 28 European deals over the last five years, which accounts for more than one-fifth of its global transactions. However, the US constitutes a much larger portion of the fund's overseas investments.
Mubadala increased its venture investments in the years leading up to the pandemic, reaching a peak of 32 deals in 2021. However, faced with rising interest rates and decreasing startup valuations, the fund pulled back and concluded only nine deals last year. Mubadala is not alone in facing the challenges of rising interest rates and volatile markets, which have led to a general decline in venture capital investments. However, the scale of Mubadala's problems is larger than most others.
The biggest challenge for Mubadala will be saving its investment in Getir. The company, a pioneer in the fast grocery delivery sector, reached a valuation of nearly $12 billion two years ago. However, last year the valuation dropped by nearly 80 percent to $2.5 billion, as investors became nervous and the company had to scale back its activities.
The restructuring of Getir, which was agreed upon in June, included a capital injection of 250 million dollars led by Mubadala. As part of the deal, the Abu Dhabi fund took control of Getir's grocery business in Turkey, the start-up's only remaining delivery market. Getir CEO and founder Nazim Salur resigned from his leadership role but remains on the board of the Turkish business. Ajami will exit the board due to tensions with the company founders.
Mubadala has also sought to salvage its investment in Wefox, in which the fund first invested in 2019. The fund holds about 5 percent of the startup, having led a $450 million funding round in 2022. However, earlier this year, proposals were made to sell Wefox's core business for just 550 million euros to a competitor backed by the Abu Dhabi Investment Authority.
Sure, here is the translation of the heading:
"Wefox founder and other investors have since secured a rescue financing that prevents the sale of the core business and enables an independent strategy. A Wefox representative did not immediately respond to a request for comment.
Mubadala has also invested in other challenging start-ups, including the European bicycle and scooter rental company Tier, which merged with a competitor earlier this year. Some successes in the fund's portfolio include a stake in the Swedish 'Buy Now, Pay Later' company Klarna, which was invested in at a valuation of $6.7 billion in 2022.
Ajami is planning a move to California, where he will continue to work for the fund.
