Mubadala, the Abu Dhabi sovereign wealth fund, has led a $700 million growth equity funding round into real estate and technology firm REEF to transform thousands of parking lots and garages into urban hubs for restaurants and other services.
The financial investment arm of Mubadala Investment Company was joined by other participants including SoftBank, Oaktree, UBS Asset Management, and Target Global, the startup said this week.
“The concept of transforming infrastructure to better connect the origin of production with the destination of consumption resonated with us,” Adib Mattar, head of Mubadala Capital’s private equity business, said in a statement.
Separately, REEF and alternative asset manager Oaktree established a $300 million joint infrastructure vehicle to acquire real estate assets across the US. The online services firm already has a real estate network of 4,500 parking lots and garages.
The investment is a vote of confidence in delivery services and last-mile distribution services that were already growing more popular before the pandemic. REEF, which has more than 100 “neighborhood kitchens,” offers a revenue share partnership to restaurant partners to share costs, operations, and food preparation. Built on the delivery and quick serve carry-out concept, the kitchens are set up in mobile vessels, outfitted to operate as full-functioning, take-out only kitchens. Some restaurant partners include Burger-Fi and David Chang’s Fuku chain.
While early stage investments have taken a hit, venture capital investments in proven startups are still showing strength in the coronavirus era, particularly for firms that are responding to accelerating trends, such as remote work and ecommerce.
Venture capital funding for US companies jumped to $36.5 billion in the third quarter, up 30% from the second quarter and up 22% year over year, making it the second biggest quarter of all time, according to PwC MoneyTree. Eighty-eight US companies raised rounds worth $100 million or more in the third quarter, the report said.
Among the most sizable venture capital deals in the quarter were a $1.9 billion funding round into Elon Musk’s aerospace company SpaceX and a $1.5 billion funding round into video game company Epic Games. Another large deal this year involved Google’s autonomous car company Waymo, which raised $3 billion from investors that included Mubadala in the largest deal of the second quarter.
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