Business

Softbank will add $1 billion to its Latin American Innovation Fund

The Japanese conglomerate plans to invest between $100 million to $150 million in 17 companies and two venture capital firms

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28.Feb.2020 11:30 BRT
UPDATED 17:34 BRT

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SoftBank already backs more than 650 companies in the region, including Rappi, Gympass, Ayenda and Uala;
More than half of SoftBank’s investments in Latin America have been into Brazil.

After adding $1.6 billion to its Latin American Innovation Fund in 2019, SoftBank will reportedly put another $1 billion on it to support startups across the region this year. SoftBank’s investments in Latin America, where its fund holds $5 billion, aim to focus on digital commerce, healthcare projects and fintech, among other sectors.

The Japanese conglomerate already oversees more than 650 companies in the region and intends to allocate anywhere between $100 million to $150 million to finance 17 firms and two venture capital companies. To date, over 50% of SoftBank’s investments have been into Brazil, most of which exist in the fintech sector.

The firm is increasing its bets in Latin America while facing challenges to attract investors to a second global Vision Fund, initially planned to raise another $100 billion.

Andres Freite, managing partner and head of SoftBank’s Southern Cone region, says that Argentina, Brazil, Chile, Colombia and Mexico “are in the spotlight,” and that there is no particular amount that SoftBank is planning to invest in each country’s economy.

We are focused on investing in companies that could achieve long-term profitability.
Andres Freite, managing partner and head of SoftBank’s Southern Cone region

SoftBank has already made investments into Rappi, a Colombia-based delivery services provider, Brazil’s fitness firm Gympass, and Argentina-based fintech company Uala. Another of its early investments in the region, Colombia’s Ayenda Rooms, recently raised $8.7 million in a recent round of funding. Ayenda is a hospitality firm that operates 150 hotels under its flag in Colombia and has recently expanded to Peru.

Softbank’s expansion into Latin American markets will also focus on investing in artificial intelligence (AI) companies that use the technology to improve standard processes involved in food-related businesses.

The conglomerate says it will be directing additional investments into venture capital companies. Last year, Softbank invested $130 million in Argentina’s Kaszek Ventures, which in turn was recently the main backer of Ayenda, and secured a $100 million stake in Brazilian Valor Capital Group.

Venture capital

Latin America’s AlphaCredit aims to raise $125 million via an investment round, which will reportedly be led by SoftBank’s local fund. The capital injection from the Japanese conglomerate will allow Mexico-based AlphaCredit to “consolidate its place as one of the leading financial technology platforms” in the area, according to a press release published last month.