Site icon Next Business 24

How rising Mubadala-backed AAF is successful VC offers in among the hottest startups

How rising Mubadala-backed AAF is successful VC offers in among the hottest startups


It’s been virtually a decade since Omar Darwazah and Kyle Hendrick launched AAF Administration and its first fund of $25 million in 2017. 

Quite than racing to dramatically enhance their property underneath administration like many funds have lately, the companions have deliberately saved their fund sizes small, at the same time as their repute and returns have grown. 

Their newest automobile — a $55 million early-stage hybrid fund, dubbed the Axis Fund, that lately closed — brings the Washington-based enterprise agency’s complete property to roughly $250 million throughout 4 funds. The agency raised a $39 million Fund II in 2021 and a $32 million fund-of-funds funding automobile in 2017 for a choose group of its restricted companions.

“Working a $50 million fund could be very totally different from operating a $500 million fund,” common accomplice Darwazah stated in an interview with TechCrunch. “We’ve seen that naturally giant fund sizes can disrupt GP-LP alignment because it turns into a perform of management-fee era versus carried-interest era, and that’s not a recreation we wish to play.”

Not like typical VC corporations that make investments immediately into startups, AAF is adopting components of a fund-of-funds mannequin the place it invests a part of its capital right into a portfolio of rising funds along with backing startups.

With this fourth fund, AAF plans to spend money on rising managers’ first or second funds (usually underneath $50 million) and their most promising portfolio firms from pre-seed to pre-IPO, the companions stated.

The agency is allocating about 80% of its capital to startups and 20% to rising funds, mixing the 2 into what it calls a “one-stop capital-formation accomplice” for founders and fund managers alike.

Techcrunch occasion

San Francisco
|
October 27-29, 2025

Up to now, the Axis Fund has backed 25 pre-seed and seed-stage enterprise funds, together with 5 direct bets on early-stage and development startups.

“We’ve discovered that the richest dataset of private-market firms on the earliest phases of their formation over the previous decade is accessed solely by LP checks in rising managers,” stated Hendrick, the agency’s different common accomplice.

This twin fund-type technique has granted AAF entry to many promising startups. The agency is an early investor in Present, Drata, Flutterwave, Jasper, and Good day Coronary heart.

Equally, by the funds the place it’s an LP, AAF holds oblique publicity to different unicorns, together with Mercury, Deel, Retool, and extra lately AI corporations comparable to Movement, Decagon, and ElevenLabs by its community of seed-fund LP positions in corporations like Leonis Capital, Wayfinder Ventures, and Quiet Capital (the agency based by Lee Linden, who’s exploring an analogous two-pronged technique with former Founders Fund GP Brian Singerman for a brand new fund).

The eight-year-old enterprise agency claims to have publicity to roughly 800 venture-backed firms launched between 2021 and 2025 by these underlying managers.

L-R: Kyle Hendrick and Omar Darwazah, common companions and managing administrators.Picture Credit:AAF Administration

With this strategy, AAF additionally focuses much less on hands-on assist with hiring or product for portfolio firms and extra on connecting founders with later-stage capital from its community of restricted companions. That’s a service that turns into particularly useful as soon as a startup begins elevating development rounds.

“I’d say the place we usually add probably the most worth to a founder’s journey, particularly within the early part, is thru our enterprise community,” stated Hendrick. “Which means we will inject you immediately into 45 energetic enterprise funds the place we’re LPs. It’s on the spot distribution into their ecosystems.”

On the similar time, AAF serves as a conduit between institutional buyers — particularly within the Gulf — who usually choose diversified enterprise publicity with out managing dozens of direct relationships.

Abu Dhabi’s Mubadala; a number of U.S., European, and MENA household places of work; GPs from main U.S. asset managers; a multibillion-dollar U.S. enterprise agency; and a publicly traded firm are backing this fourth fund, the agency stated.

Darwazah and Hendrick got here to enterprise from totally different backgrounds. Darwazah, who beforehand labored in company finance and personal fairness within the Center East, has spent years bridging Gulf capital with U.S. startups. Hendrick, a former entrepreneur who additionally labored on the UAE Embassy within the U.S. and at a household workplace in Abu Dhabi, brings an operator’s lens to AAF’s earliest offers.

Throughout its 4 funds, AAF has made 138 direct investments and backed 39 distinctive rising managers, with 20 portfolio exits totaling practically $2 billion in mixture worth.

These exits embody Tru Optik, MoneyLion, Even Monetary, Portfolium, Prodigy, Betterview, Lightyear, Trim, HeyDoctor, and Medumo. At the very least six publicly traded firms have acquired its portfolio firms, together with TransUnion, Large Digital, GoodRx, and Affirm.

The agency says this all provides as much as a few of its earlier fund vintages rating within the high decile when it comes to internet TVPI for his or her respective vintages, in line with Cambridge Associates and Carta information.

“Our technique permits us to establish sign from noise and enhance our likelihood of backing outliers — fund returners, 10x cash-on-cash firms, and seed-to-unicorn investments,” stated Darwazah.

Keep forward of the curve with NextBusiness 24. Discover extra tales, subscribe to our e-newsletter, and be part of our rising group at nextbusiness24.com

Exit mobile version