G42 to manage $10 billion tech fund; and more Middle East AI News
Carrington Malin
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Welcome to Middle East AI News!
I hope that you're having a great summer! Here's this week's Middle East AI News, after a couple of week's break!
My top story for the week is today's G42 announcement that it is launching a $10 billion technology venture capital fund in partnership with Abu Dhabi Growth Fund. The 'G42 Expansion Fund' will be managed by a newly created business unit. However, is this a completely new fund? And what does this mean for the future of the AI and cloud computing company?
Lots of links to other news emerging tech stories from around the region, inluding last week's announcement by Ahu Dhabi's health information exchange Malaffi. If you've not caught up with this, I can definitely recommend reading up on it (see my Linkedin pos t). Malaffi has driven a digital transformation program that's taken the emirate's healthcare sector from disconnected in terms of patient data, to a unified data exchange that enables predictive healthcare!
Have a question or want to share your own perspective? Please do leave a comment or send me a message. I'd love to hear from you!
/Carrington
Middle East AI News – 18-Aug-22
G42 enters fund management with $10 billion tech fund
G42 (a.k.a Group 42) today announced the creation of a new business unit to manage a $10 billion ?????? ?????????????????? ????????, a global technology growth fund formed in strategic partnership with Abu Dhabi Growth Fund (ADG) . According to Bloomberg , the Abu Dhabi-based AI and cloud computing firm has expanded its investment team over the past year adding key employees from the country's sovereign wealth funds.
The move could mark the beginning of a new stage in the G42 group's development, if one that takes it away from its core business of developing technologies and solutions, leveraging AI and other emerging technologies. And G42 is hardly dipping its 'toe in the water' here, its creating a new division to manage a $10 billion fund!
However, there is much investment management expertise within G42's parent holding group, H.H. Sheikh Tahnoun bin Mohammed Al Nahyan's Royal Group and sister investment and holding company ADQ (which formed ADG last year). Meanwhile, as a result of global tech investment firm Silver Lake's $800 million investment in G42, arranged by Mubadala , Silver Lake co-CEO Egon Durban sits on the company board.
According to today's news, the new $10 billion fund will invest in late-stage growth companies with disruptive technologies, with a particular focus on emerging markets.?
Sound familiar?
It should. In January, Chimera Capital (also part of Royal Group) announced that it had closed a second round of funding for a new tech-focused global venture capital fund at $10 billion. Launched in September 2021 together with New York headquartered co-manager Alpha Wave Global (previously Falcon Edge Capital), the fund was called Alpha Wave Ventures II.?
As background, a $300 million Alpha Wave Incubation (AWI) fund was launched in early 2020 by then Falcon Edge Capital, funded by ADQ. The fund's mandate is to invest in early stage tech startups from India and South East Asia, on the condition that targeted ventures moved some of their operations and/or R&D to Abu Dhabi. It seems to have been highly successful so far, moving two dozen Indian startups to Abu Dhabi.
I speculated in Middle East AI News 27-Jan-22 that the new Alpha Wave Ventures II fund could have similar objectives, but instead, investing in pre-IPO tech ventures and incentivising them to set-up in Abu Dhabi and potentially list there.
This morning's press release states that the G42 Expansion Fund will operate as a private equity investor, and in "addition to providing investment support, G42 will leverage its operational assets and ecosystem of operating companies to accelerate value creation across the G42 Expansion Fund’s portfolio of investments". Which does seem to hint that the new fund could perhaps be used as a treasure chest to acquire companies and manage them under the G42 umbrella.
So, what does this mean for G42's overall strategy??
The creation of the G42 Expansion Fund could end up transforming the whole company. Its move into venture capital could present acquisition opportunites that could build the group into something bigger than anyone had previously imagined.
The group already manages an enviable portfolio of technology concerns. As part of Mubadala's investment in G42 in 2020, the company acquired Abu Dhabi technology companies Injazat and Khazna Data Centers (Khazna) . Then there is the Inception Institute of Artificial Intelligence (IIAI) , Mohamed bin Zayed University of Artificial Intelligence (MBZUAI) , the geospatial data and technology company Bayanat , plus G42 Healthcare and G42 Cloud , two businesses units that have been spun out of the G42 parent company.
Compared to the fast-growing new AI technology developer of two years ago, G42 now looks very much like a technology investment holding group.?It will be interesting to see how the company's story plays out over the next year or two.
Find our more about this story:
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Video of the week
Watch: Takeo Kanade talks to The National about the rise of robots
Carnegie Mellon University professor Takeo Kanade talks to The National's Mustafa Alrawi and Kelsey Warner on the Business Extra podcast about how advances in robotics are changing the way that we live and work.
Watch the video (26 minutes)
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2 年Full of excellent information as usual.