Business

Mexican brokerage GBM to raise up to $150 million from SoftBank Latin America Fund

According to the investment platform, the transaction values GBM’s operating stake at over US$1 billion

Photo by LABS
  • The broker said it plans to use the proceeds to accelerate growth in all the business lines where it currently operates, as well as expanding into new verticals;
  • GBM operates in Mexican stock market for over 35 years with a market share of over 16% in equity trading and more than MXN 800 billion in assets under custody.

Grupo Bursátil Mexicano (GBM), a Mexican investment platform and brokerage firm, announced on Friday that SoftBank Latin America Fund will invest up to $150 million into a GBM’s subsidiary, which could value GBM’s operating stake by more than $1 billion.

The broker said it plans to use the proceeds to accelerate growth in all the business lines where it currently operates, as well as expanding into new verticals. GBM says it will use the money for the democratization of investments in Mexico and offer financial education so that Mexicans can regain control of their finances.

“In Mexico, investing used to be for a small group of people. In 2019 there were less than 300k investing accounts in the country, today thanks to our technology, GBM alone has more than 1.3 million accounts. Through our GBM+ app we give access to an open product platform where clients can invest in stocks, ETFs, and mutual funds; Smart Cash, the best cash management solution in the country and Wealth Management, our personalized portfolio advisor for every individual,” said the company, in a statement to LABS.

The brokerage will also use the proceeds for hiring. The company currently has more than 450 employees. GBM operates in the Mexican stock market for over 35 years with a market share of over 16% in equity trading and more than MXN 800 billion in assets under custody.

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GBM serves institutions, individuals, and external advisors. Over the last decade, the company invested in digital solutions to enable Mexican’s access to investment products through its GBM+ app.

According to the Mexican National Banking and Securities Commission (CNBV), there were only 298,000 brokerage accounts in Mexico at the end of 2019, which surged to 940,000 by the end of 2020. Over that period, GBM grew its investment accounts from 38,000 to over 650,000, increasing its share of the total investment accounts in the country from 8% to 70%. At the end of March 2021, GBM said it surpassed the one million accounts mark.

“GBM’s mission is to transform Mexico into a country of investors. For over 35 years, we have been a leading player in the investment industry and today, thanks to our technology, we are now able to expand our services to everyone through our GBM+ platform. Additionally, GBM will keep investing in having the best product offering for our institutional and corporate clients. As well as building the best external advisor base in the country,” said Pedro de Garay Montero, Co-CEO of GBM, in a press statement.

“Today, we are focused on growing in Mexico since there is a huge market opportunity, we are a country of more than 120 million people and a GDP of more than U$1 trillion. The financial services industry is dominated by big banks and is inefficient, expensive and provides a poor client experience.This has resulted in less than 1% of individuals having an investment account. We will be targeting clients through our own platform and internal advisors, as well as growing our base of external advisors to reach as many people as possible with the best investment products and user experience. Regarding institutional clients, there is an enormous potential of serving both the large corporations and the SMEs who have received limited services from banks,” said GBM.

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We want to democratize investments in Mexico and provide all Mexicans with access to the financial markets. We are aware that this is a large-scale mission, but we are convinced that SoftBank will be a great ally to accomplish this task.

José Antonio Salazar Guevara, Co-CEO at gbm

Marcelo Claure, CEO of SoftBank Group International and COO of SoftBank Group Corp said that the Japanese conglomerate looks to make long-term investments in companies that will drive growth and innovation in the region.

The company will receive the funds once it has all the regulatory approvals.

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