Abu Dhabi sovereign fund Mubadala Investment Company is likely to invest up to $15 billion in Japanese internet and telecoms powerhouse SoftBank’s $100 billion Vision Fund.
The fund would be wrapped up in three weeks with commitments worth about $95 billion, Bloomberg reported quoting Ibrahim Ajami, head of venture capital at Mubadala Capital.
This is a significant opportunity for good financial returns, Ajami said, pointing to SoftBank CEO Masayoshi Son’s track record over the past 30 years, and what he has been able to achieve in technology.
Mubadala also plans to start two venture capital funds to build its technology holdings with investments in companies in the $1 million to $10 million revenue range, Ajami said.
In March, SoftBank sold a stake in UK chip design firm, Arm Holdings, to fund its investment in the $100 billion technology investment fund with Saudi Arabia.
The sale of 25% of SoftBank’s stake is expected to get the firm $8 billion. The entire $8 billion will make up part of its $25 billion commitment to the SoftBank Vision Fund.
The possible investment from Mubadala would help the Japanese company get closer to its stated $100 billion target for the SoftBank Vision Fund.
It was in October last year that the Saudi Arabian government and Japan’s SoftBank Group joined hands to create a $100 billion technology investment fund.
The Public Investment Fund (PIF), Saudi Arabia’s top sovereign wealth fund, will invest up to $45 billion over the next five years while SoftBank will invest at least $25 billion.
The tech fund is expected to be one of the world’s largest private equity funds.
Softbank has been betting heavily on the technology sector.
Also, SoftBank’s chief Masayoshi Son—who has led the Japanese telecommunication firm’s growth to a $68 billion communications and tech investment giant from a $50,000 startup—has been looking out for new areas for expansion.
The fund would be managed in Britain by a subsidiary of SoftBank.