SoftBank announced an initial US$2b commitment on a new SoftBank Innovation Fund to invest in Latin American startups, with a target of US$5b. SoftBank’s investments in the region include 99 (2017), Loggi (2018), and potentially Gympass. SoftBank COO (and chairman of Sprint) Marcelo Claude, a Bolivian, is leading the effort.
(Crunchbase) SoftBank Group Corp. (SBG) sees huge potential in Latin America. And it’s putting money behind that vision.
This morning, SBG unveiled plans for a $5 billion SoftBank Innovation Fund, or what it’s describing as “the largest-ever technology fund focused exclusively on the fast-growing Latin American market.” So far, SBG has committed $2 billion to the fund, and will serve as its general partner. It’s unclear whether it plans to raise the remaining $3 billion, and no decision has been made regarding where the fund will be headquartered.S
In addition to the new fund, SBG announced the creation of the “SoftBank Latin America Local Hub,” a new operating group that it said “will partner with SoftBank portfolio companies helping them enter Latin America, navigate the local markets and broaden their geographic reach in the region.”
The SoftBank Vision Fund will co-invest alongside the SoftBank Innovation Fund, according to the Asian investment giant. It will put money into startups all over Latin America, including in Argentina, Brazil, Chile, Colombia, and Mexico. (Brazil has historically been the largest recipient of Latin American investment dollars with Mexico coming in second). SBG said it will be particularly focused on e-commerce, digital financial services, healthcare, mobility, and insurance.
Bolivian-American Marcelo Claure has been tapped to serve as CEO of SoftBank Latin America. He will also continue to serve in his current roles as COO of SoftBank Group Corp., CEO of SoftBank Group International and executive chairman of Sprint Corp.
SBG Chairman and CEO Masayoshi Son said the fund was launched out of SBG’s belief that Latin America “is on the cusp of becoming one of the most important economic regions in the world… (with) significant growth in the decades ahead.”
“Growing up in Latin America I witnessed firsthand the creativity and passion of the people,” Claure said in a press release. “There is so much innovation and disruption taking place in the region, and I believe the business opportunities have never been stronger.”
SBG cited a number of factors that make Latin America ripe for investment, including a rapidly growing middle class, a “drastic increase” in internet and smartphone adoption, and a shift in consumer behavior that has led to more online shopping. Furthermore, banking activities in the region are increasingly being conducted online and both the healthcare and transportation infrastructure sectors are in dire need of improvement.
This is not SoftBank’s first foray into the region. It has been investing more in Latin America in recent years. Most recently, it backed Sao Paulo-based ride-hailing company 99 (which got acquired by Beijing-based Didi Chuxing in January 2018). Specifically, the SoftBank Vision Fund led 99’s $100 million Series C round in May 2017.
In general, the global appetite to invest in Latin American startups has grown significantly since 2013, according to statistics from the Latin American Venture Capital Association. Twenty-five global investors made debut investments in LatAm in 2017 alone and the total number of global investors into LatAm startups more than doubled from 2013 to 2017 (from 36 to 80).
Some of Silicon Valley’s biggest names are also active in LatAm, including Andreessen Horowitz, Accel Partners, Founders Fund, Sequoia Capital, and Y Combinator.
Of course, news of this fund isn’t a big surprise to Crunchbase News, which has been tracking a trend of increased investor interest in Latin America. In August 2017, I took a look into investment in the region, discovering that the large gap between funding in North and Latin American startups was narrowing.
