How Mubadala-backed startup AAF wins venture capital deals at some of the most sought-after startups

Nearly a decade has passed since then Omar Darwaza and Kyle Hendrick Fired Management of A.F Its first fund was $25 million in 2017.

Rather than racing to dramatically increase their assets under management as many funds have done in recent years, the partners are deliberately keeping their fund sizes small, even as their reputations and returns grow.

Their latest vehicle — a $55 million early-stage hybrid fund, called the Pivot Fund, which recently closed — brings the Washington-based venture firm’s total assets to nearly $250 million across four funds. The company raised a $39 million venture fund in 2021 and a $32 million investment vehicle in 2017 for a select group of its limited partners.

“Managing a $50 million fund is very different from managing a $500 million fund,” General Partner Darwaza said in an interview with TechCrunch. “We’ve seen that naturally large fund sizes can disrupt the GP-LP alignment because it becomes a function of generating management fees versus generating carried interest, and that’s not a game we want to play.”

Unlike typical venture capital firms that invest directly in startups, AAF adopts elements of a fund of funds model where it invests a portion of its capital in a portfolio of startup funds as well as backing startups.

Through this fourth fund, AAF plans to invest in first or second funds for emerging managers (typically less than $50 million) and their most promising portfolio companies from pre-seed to pre-IPO, the partners said.

The company allocates about 80% of its capital to startups and 20% to emerging funds, combining the two in what it calls a “one-stop capital formation partner” for founders and fund managers alike.

To date, the Axis Fund has backed 25 pre-seed and seed-stage venture funds, along with five direct bets on early- and growth-stage startups.

“We found that the richest dataset of early-stage private market companies over the past decade is only accessible through LP screenings at emerging managers,” said Hendrick, the firm’s other general partner.

This dual funding strategy has given AAF access to many promising startups. The company is considered one of the first investors in present, Wired, Flutter wave, jasperAnd welcome to the heart.

Likewise, through the funds in which it is an LP, AAF has indirect exposure to other unicorns, including Mercury, Deel, Retool, and more recently AI companies such as a movement,decagon and Eleven laboratories Through its network of seed funding LP positions at companies like Leonis Capital, Wayfinder Ventures, and Quiet Capital (the company founded by Lee Linden, who is exploring a similar two-pronged strategy with Founders Fund GP Brian Singerman) For a new box).

The eight-year-old venture firm claims to have had exposure to nearly 800 venture-backed companies launched between 2021 and 2025 through these core managers.

With this approach, AAF also focuses less on hands-on staffing or product assistance for portfolio companies and more on connecting founders with later-stage capital from its network of limited partners. This is a service that becomes especially useful when a startup starts raising growth rounds.

“I would say the place where we add the most value to the founder journey, especially at the early stage, is through our venture network,” Hendrick said. “This means we can pump you directly into 45 active investment funds where we are limited partners. It’s instant distribution into their ecosystems.”

At the same time, the AAF acts as a conduit between institutional investors – especially in the Gulf region – who often prefer exposure to diversified projects without managing dozens of direct relationships.

The company said that Mubadala in Abu Dhabi, several family offices in the United States, Europe, the Middle East and North Africa, general practitioners from major asset managers in the United States, a multi-billion-dollar American venture company, and a public joint stock company, support this fourth fund.

Darwaza and Hendrick came to the adventure from different backgrounds. Darwaza, who previously worked in corporate finance and private equity in the Middle East, has spent years connecting Gulf capital with American startups. Hendrick, a former businessman who also worked at the UAE Embassy in the US and at a family office in Abu Dhabi, brings an operator lens to AAF’s first deals.

Across its four funds, AAF has made 138 direct investments and supported 39 unique emerging managers, with 20 portfolio exits totaling approximately $2 billion.

These exits include TruOptik, MoneyLion, Even Financial, Portfolium, Prodigy, BetterView, Lightyear, Trim, HeyDoctor, and Medumo. At least six publicly traded companies have acquired their portfolio companies including TransUnion, Giant Digital, GoodRx and Affirm.

The company says all of this adds to some of its previous fund rankings that ranked in the top decile in terms of net TVPI for its own models, according to Cambridge Associates and Carta data.

“Our strategy allows us to identify signals from the noise and increase the likelihood of supporting outliers — returns from funds, 10x cash-based companies, seed investments to startups,” Darwaza said.