FinTech: SoftBank Steps Up LatAm Focus With $1B Investment Plan

February 18, 2020 | FinTech, News, Venture Capital
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The amount will be carved out from its $5 billion Latin America fund launched in the first quarter of 2019.

SoftBank Group has upped the ante in its gambit to profit from financing promising startups in Latin America. Its $5 billion Softbank Innovation Fund, launched in March 2019, plans to spend $1 billion in 2020 to bankroll LatAm ventures in e-commerce, health care, and fintech. (PYMNTS.com)

SoftBank’s LatAm investments

SoftBank’s proposed 2020 investment will follow-up on the previous roughly $1.6 billion its already pumped into LatAm startups in 2019. These include:

  • Brazilian e-commerce platform VTEX
  • Argentine fintech outfit Ualá alongside Tencent
  • Brazilian fintech startup Creditas
  • Real estate tech startup QuintoAndar
  • Colombian delivery service Rappi

In addition, the fund has reportedly invested in third party venture capital firms. These are Brazilian firm Valor Capital ($100 million) and Argentina’s Kaszek Ventures ($130 million).

Though SoftBank does not have a country-wise investment quota for its LatAm fund, it has invested more than half of its cumulative outlay to date in Brazil, according to Bloomberg. “We are focused on investing in companies that could achieve long-term profitability,” said Andres Freire, a managing partner and head of SoftBank’s Southern Cone region. He gave out this information at a roundtable in Buenos Aires.

On the horizon: investing in 650 promising LatAm startups

As SoftBank has ambitious plans for Latin America, it is reportedly looking at around 650 ventures in the region.

The main thesis for the LatAm market is its size: it represents 10% of the global population and 8% of its GDP. The market presents “significant growth opportunities for rapid technology deployment at scale and disruptive innovation.”

Recent trends include a sharp increase in usage of the internet and smartphones, consumers shifting to online shopping and the rapid digitization of banking activities.

Major opportunities exist in the region’s poorly developed transportation sector, highly concentrated urbanization and fragmented healthcare services.

Related Story:    Venture Capital: SoftBank Leads a $125 Million Series in Mexican Fintech AlphaCredit      

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