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SoftBank launches new $3 billion fund to invest in Latin America

SoftBank's renewed bet on Latin America comes as venture capital is booming in countries such as Brazil and Mexico

SoftBank's big bets in 2021: retail & consumer and fintechs
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SoftBank Group Corp on Tuesday (14) launched a $3 billion fund to invest in technology companies in Latin America in a bid to build on the success of its initial fund for the region, which has spent most of its capital.

In a statement, the Japanese conglomerate said it plans to invest in listed and private tech companies, adding the fund may raise additional capital in the future.

SoftBank’s renewed bet on Latin America comes as venture capital is booming in countries such as Brazil and Mexico, and follows a decision to pause new investments in China after a regulatory crackdown on tech companies.

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The Japanese group is now considered the second-largest investor of unicorns in the world. In Latin America, there are at least ten unicorns invested by SoftBank: Mexico’s Kavak, Colombia’s Rappi, and Brazil’s Mercado BitcoinLoftLoggiCreditasVTEXMadeira MadeiraGympass and unico.

“There is so much innovation and disruption taking place in Latin America, and I believe the business opportunities there have never been stronger,” SoftBank Group’s chairman Masayoshi Son said in the statement. “Latin America is a critical part of our strategy.”

SoftBank‘s first $5 billion Latin American fund was launched in 2019 by executive vice-president and Chief Operations Officer Marcelo Claure at a time when no deep-pocketed investor had signed big checks for startups in the region.

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It has invested $3.5 billion in 48 companies from sectors ranging from education to finance and logistics, which are now valued at $6.9 billion. Most of its portfolio companies remain private.

Still, companies such as Banco Inter SA, which SoftBank bought into when it was already listed, and e-commerce software platform VTEX, which went public in July, helped the fund post gains in the last quarter.

COO Claure, who will oversee the new fund, said returns from the initial fund have exceeded SoftBank‘s expectations.

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A report from CB Insights shows SoftBank has already broken the record in the number of investments made in 2021: there are already 117 deals, compared to 63 done in 2020 and 66 in 2019. In addition, the group is said to have deals already in the pipeline that could bring the number of deals to 197 by the end of this year.

CB Insights gathered the Japanese group’s investments made in 2021 so far. The top two sectors were Retail & Consumer and Fintechs, but there were also investments in Enterprise (24 companies), Healthcare (16), Mobility (3), and Logistics (3), among others.

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