A look at Mubadala’s “tough but constructive” approach with its European investments

Mubadala’s focus on restructuring its European startup portfolio got plenty of ink in the Financial Times and Bloomberg, as the sovereign fund reacts to a sharp drop in the startups’ valuations since it ramped up its investment in the region, in an effort to salvage “bns of USD” invested in European startups. At least four of its portfolio companies have undergone either major structural change, refinancing, or a replacement of leadership this year, Bloomberg said.

The CEO of one of the startups it backs called Mubadala “tough but constructive,” while a Mubadala spokesperson said it is often the only investor willing to continue to support these companies financially through difficult times.

Mubadala is in the same boat as other investors grappling with the crashing valuations of European startups as “interest rates and choppy markets have led to a broad slowdown in venture capital investments,” the paper wrote.

Background: The sovereign wealth fund has already exerted pressure to restructure and shake up the management of two European startups it has invested in. The wealth fund invested USD 250 mn in Turkish food delivery startup Getir but split the business into two, and took over its Turkish grocery unit. It also attempted — to no avail — to split German ins. tech startup Wefox and offload its core business to UK ins. broker Ardonagh Group, a rival backed by Abu Dhabi Investment Authority (Adia). Mubadala had led a USD 450 mn funding round that valued the company at USD 4.5 bn in 2022.