Mubadala Capital, the asset management arm of Abu Dhabi’s sovereign fund Mubadala Investment Co., is capitalizing on the downturn in biotech valuations to make strategic investments in the fast-growing sector. In 2024 alone, the firm has made early-stage investments in three U.S. biotech startups, taking advantage of favorable market conditions.
These investments include stakes in Seattle-based cell therapy specialists Outpace Bio, New York’s Metsera, and California’s Capstan Therapeutics, as revealed by data from PitchBook. Collectively, these deals, which also involved other investors, were valued at an estimated $617 million.
Biotechnology, which leverages living organisms to create products—often pharmaceuticals—represents a sector poised for substantial growth. According to the Biotechnology Innovation Organization, nearly 7,600 biotech-based drugs are currently in development in the U.S. The broader U.S. biotech market is projected to expand at a compound annual growth rate of 12.5%, reaching a value of $1.8 trillion by 2033, up from $552 billion in 2023, according to Vision Research Reports.
Despite these promising prospects, early-stage biotech valuations remain below their 2021 peaks, presenting opportunities for investors like Mubadala Capital. While these biotech investments are relatively small compared to the larger deals typically undertaken by Mubadala Investment Co., they align with Mubadala Capital’s mandate to “address smaller or riskier opportunities,” says Diego López, managing director at consultancy Global SWF.
Mubadala Capital’s portfolio has been diverse this year, with 15 investments spanning sectors such as healthcare, fintech, edtech, and business software. Of these, 11 were venture capital agreements, and four were buyouts or acquisitions. Eight of the companies are based in the United States, six in Europe, and one in the UAE.
Mubadala Capital, which launched in 2011, initially focused on private equity and public markets in North America and Europe. In 2017, it became one of the first sovereign wealth funds to manage third-party capital, significantly evolving its strategy and positioning itself as a pioneer within the industry.
As of March 2024, Mubadala Capital manages $24 billion in assets, $18 billion of which is from external investors, including other sovereign funds, foundations, public pension funds, insurance companies, wealthy individuals, and asset managers. The company has launched multiple funds over the past decade, including a $400 million U.S. ventures fund and a Europe-focused fund that closed in 2021 with €450 million ($496 million) in commitments.
To date, Mubadala Capital has made 138 investments across 94 companies, with the median size of funding rounds at $70 million and the median company valuation at $374 million, according to PitchBook data.
Mubadala Capital’s commitment to biotechnology, coupled with its expanding global investment footprint, underscores its strategic approach to navigating the complexities of the current economic landscape while continuing to pioneer within the sovereign wealth fund sector.
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