Mubadala and Abu Dhabi Catalyst Partners invest $150 million in Telegram

Mubadala Investment Company, the Abu Dhabi-based sovereign investor, has invested $75 million in 5-year pre-IPO convertible bonds of Telegram, an operator of the self-named security-focused social media platform, with Abu Dhabi Catalyst Partners investing a further $75 million.

The strategic partnership between the companies is also expected to create new collaboration opportunities and thereby further advance Abu Dhabi’s ecosystem of innovative and tech-enabled companies.

Launched in 2013 by brothers Pavel and Nikolai Durov as a secure messaging app utilising end-to-end encryption, Telegram evolved into a fully-fledged social media platform and has its global headquarters in the UAE. It has become one of the 10 most downloaded apps in the world with over 500 million monthly active users.

Faris Sohail Faris Al Mazrui, Head of Mubadala’s Russia and CIS Investment programme, said: “We recognise and admire Pavel’s vision for the company and the team’s execution in building an exceptional product and company. His unwavering focus on user experience and privacy, and how it is central to every business decision he makes, is one of the keys to Telegram’s popularity and success. Telegram’s user base has reached a critical mass that places it amongst global tech giants.”

He added, “We believe that Telegram is well-positioned for an inflection point that will transform it into a leading global technology company. The company represents a very promising investment opportunity for Mubadala and will sit well within our wider portfolio of pioneering companies looking to transform their respective industries. Our investment in Telegram establishes a strategic partnership for us to further strengthen Abu Dhabi’s technology ecosystem as well as bring new levels of tech skills and talent to the capital.”

Pavel Durov, Founder and CEO of Telegram, added: “We are honoured by the $150 million investment into Telegram from Mubadala and Abu Dubai Catalyst Partners. We look forward to developing this strategic partnership to continue our growth in the Mena region and globally.”

James Munce, CFO and COO of Abu Dhabi Catalyst Partners, said: “Over the past 7 years, Telegram usage has grown from zero to 500 million monthly active users. This demonstrates the management team’s unshakeable dedication to building a platform centered around privacy and user experience. We believe this creates a strong value proposition and will be a focal point for social media platforms and a new era of messaging.”

He concluded, “ADCP strives to partner with businesses that demonstrate strong growth trajectories globally, and that can bolster an evolving technology ecosystem in Abu Dhabi and the ADGM. We aim to use our resources to work hand-in-hand with management teams towards catalyzing leading platforms in different industries at the cutting edge. We see a very attractive opportunity to do this with Telegram.”

In recent years, Mubadala has been expanding its focus on the technology sector through a strategy of direct and fund-of-fund investing from early-stage venture capital to growth. Over the past 12 months, it has made a number of global technology investments in category leaders including the autonomous driving technology company Waymo, AliExpress and Jio Platforms, to name just a few.

Reliance Industries Limited and Jio Platforms Limited, India’s leading digital services platform, announced in June last year that Mubadala Investment Company will invest $1.2 billion in Jio Platforms at an equity value of $65 billion and an enterprise value of $68 billion. Mubadala’s investment will translate into a 1.85% equity stake in Jio Platforms on a fully diluted basis.

With this investment, Jio Platforms has raised $11.6 billion from leading global technology and growth investors including Facebook, Silver Lake, Vista Equity Partners, General Atlantic, KKR and Mubadala in less than six weeks.

Jio Platforms, a wholly-owned subsidiary of Reliance Industries, is a next-generation technology platform focused on providing high-quality and affordable digital services across India, with more than 388 million subscribers. Jio Platforms has made significant investments across its digital ecosystem, powered by leading technologies spanning broadband connectivity, smart devices, cloud and edge computing, big data analytics, artificial intelligence, Internet of Things, augmented and mixed reality and blockchain.

Mubadala invests and partners to advance Abu Dhabi’s diversified, globally integrated economy across sectors that are driving global growth and addressing critical challenges. A significant aspect of this mandate is transformative information and communications technology investments which include cognitive computing, ICT infrastructure, telecoms, and satellite operations. To further its commitment to innovation and technology, Mubadala established its Ventures arm in 2017 to partner early with visionary founders and support innovative businesses. Mubadala’s Ventures business currently manages a number of venture funds in the US, Europe and Middle East.

Today, Mubadala’s portfolio spans advanced manufacturing, semiconductors, metals & mining, pharmaceutical and medical technology, renewable energy and utilities, and the management of diverse financial holdings.

Separately, Mubadala and Italy’s Snam, one of the world’s leading energy infrastructure operators, have signed on Monday a Memorandum of Understanding to collaborate on joint investment and development initiatives on hydrogen. As part of the agreement, the two companies will carry out a number of assessment activities, including technical and economic feasibility studies to explore potential projects and solutions to foster and promote hydrogen development in the UAE, and elsewhere globally.

Mubadala Investment Company is a sovereign investor managing a global portfolio, aimed at generating sustainable financial returns for the Government of Abu Dhabi.

Mubadala’s $232 billion (Dhs 853 billion) portfolio spans six continents with interests in multiple sectors and asset classes.

Abu Dhabi Catalyst Partners was launched in April 2019 as a $1 billion fund to partner with top-tier investment firms and industry-leading businesses to realise commercial returns while building a sustainable business presence at ADGM. Abu Dhabi Catalyst Partners is a joint venture between Mubadala Investment Company and Falcon Edge Capital, a New York-based investment company.