Mubadala Investment Company invests $1.5B in digital health

Laura

While the World Cup takes center stage in Qatar, another Middle Eastern country is trying to build a different kind of legacy that will persist long after the final whistle is blown.

Over the past decade, the United Arab Emirates has attracted a Cleveland Clinic hospital expansion, a Mayo Clinic partnership, millions into digital and healthcare investments, and most recently, a partnership with San Francisco-based Innovaccer, a software-as-a-service data aggregation company.

The series of strategic partnerships and investments represent a growing, and increasingly international, medical infrastructure in the UAE. Experts credit this interest with two diverging trends.

“The mix of the population and demand that they’re creating is number one,” said Ali Ustun, a partner at global consultancy, McKinsey’s Middle East office. By this, Ustun means there is a lot of Western expats in the country’s health system.

“I think number two is from an availability of financing perspective. I would say across the board, we see more tech focused sort of investments in startups picking up in UAE,” Ustun said.

Many of the country’s digital health investments derive from Mubadala, an Abu Dhabi-based, state-owned firm that acts as a sovereign wealth fund and consists of two funding entities. According to Digital Health Business & Technology’s database of investors, Mubadala’s two funding entities have invested more than $1.5 billion total into digital health companies since 2018.

Mubadala Investment Company is a state-owned, sovereign investor managing portfolio assets in the UAE and abroad. The company’s website says it manages $284 billion in U.S. assets across several platforms, which include healthcare and technology. Investments are typically made to support projects in the UAE.

For instance, Mubadala Investment Company was behind Cleveland Clinic’s expansion in the country.

Mubadala Capital is the investment company’s wholly-owned asset management arm and oversees approximately $16 billion in assets. According to Mubadala Capital’s website, approximately $11 billion of that total is third-party capital from institutional investors. It has multiple international offices, including two in the United States.

Mubadala Capital led Innovaccer’s $150 million Series E round last year and participated in value-based primary care services and technology company UpStream’s, $140 million Series B funding round earlier this month.

“We are in the business of investing in generational companies. That is what we want to find,” said Alaa Halawa, Mubadala Capital’s executive director and head of U.S. ventures.

Halawa drew a distinction between capital deployments from Mubadala Capital’s venture efforts and those made by its parent investment company.  

“It really is not a [key performance indicator] for us to go bring these companies to the UAE. That’s not what we’re doing,” Halawa said his team at Mubadala Capital focuses on returns. “If we see moving these companies abroad is going to be negative for these companies, then we wouldn’t do it because at the end of the day, I want to have a successful investment.”

However, there are times when the investments pay dividends for all parties. In these cases, Mubadala can offer something U.S.-based funds usually cannot: Access to the Middle Eastern market.

“Since 2019, we have been kind of dabbling in that market at a very, very high level. So, it’s not something that we have just done,” said Sandeep Gupta, Innovaccer’s co-founder and COO. “The primary reason around that was one of the investors that came into our Series C was Mubadala and it gave us an exposure to the market in general.”

Looking at the entire Middle East

The Innovaccer partnership in Abu Dhabi, which was first announced earlier this fall, allows the digital health unicorn to deploy its algorithms in the country’s health system, which combines a government-funded health system with a rapidly increasing private market.

This combination of public and private providers has created a collaborative environment not typically seen in the United States, said Dr. Rakesh Suri, who was involved with starting Cleveland Clinic’s presence in the country in 2013. 

“For instance, in Abu Dhabi, we worked with the Department of Health and other hospitals and clinics to join a health care exchange, where medical records are shared across all of the providers,” said Suri, who left Cleveland Clinic in September to work at a platform startup. “Regardless of which clinic or hospital a patient entered, we’d be immediately able to ascertain their past medical history [and] current medical condition.”

While Gupta declined to elaborate on the specifics of Innovaccer’s partnership with UAE, he said the company will use it as a base for additional growth in the Middle East. Innovaccer plans to hire around 30 employees to its budding operation there. The company working in partnership with the Abu Dhabi Investment Office.

Next Post

Alabama man convicted on discredited dental evidence denied appeal

Judges on the Alabama Court of Criminal Appeals denied the appeal of Charles McCrory last week in his 1985 conviction for murder in a case that hung in part on recanted testimony about teeth marks. A jury decades ago convicted McCrory for the murder of his wife, Julie Bonds, in […]