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LATAM | Sep 17, 2021

Japanese conglomerate, Softbank pouring more money into Latin America

/ Our Today

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Latest funding targets tech start-ups

A SoftBank Corp store in Tokyo, Japan.. (Photo: Bloomberg)

Japanese business conglomerate, SoftBank is pouring more money into Latin America.

This time, the company has launched yet another fund to invest in the region but this latest funding targets tech start-ups exploring artificial intelligence (AI). The second fund will begin its journey with US$3 billion, SoftBank company’s officials saying that the bank will raise more money in the months to come.

The US$3 billion brings to US$8 billion the total sum of money SoftBank has earmarked for the region. SoftBank launched its first round, known as “innovation fund” in March 2019 with US$5 billion.

As of June 30, 2021, the conglomerate invested around US$3.5 billion in 48 companies in the Latin American region. The value of this investment has now increased by 85 per cent, according to a statement put out by the company.

Nearshore Americas says the investment generated a net internal rate of return (RRR) of 85 per cent in US dollar terms.

“Digital transformation will continue to accelerate – in fact, we expect that 2022 will be the biggest Initial Public Offer year in Latin America’s history.”

Marcelo Claure, the fund’s chief in the region

“There is so much innovation and disruption taking place in Latin America, and I believe the business opportunities there have never been stronger,” commented Masayoshi Son, chairman of the Japanese group.

Fifteen of the start-ups SoftBank invested in have now grown to become unicorns in the region.

“Digital transformation will continue to accelerate – in fact, we expect that 2022 will be the biggest Initial Public Offer year in Latin America’s history,” Nearshore Americas quoted  Marcelo Claure, the fund’s chief in the region, as saying.

Investment firms like SoftBank make billions of dollars in profit when the startups they own float their shares on a stock market. Some of the start-ups Softbank invested in include Colombian delivery app, Rappi; Mexico’s second-hand car broker, Kavak; Brazilian real estate technology firm, QuintoAndar and crypto exchange, Mercado Bitcoin.

According to Masayoshi Son, Latin America is a critical part of our strategy – this is why we are expanding our presence and doubling down on our commitment with Marcelo at the helm.”

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