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Japanese internet firm seeks agreements with Mexican companies

Japan’s SoftBank Group is in advanced talks to invest in the Mexican used car platform Kavak and the financial technology firm Konfío, said several people with knowledge of the talks, which underlines the interest of the group in Mexico within its investment plan in Latin America.

SoftBank Group Corp – a telecommunications and internet company – is discussing an investment in Kavak, an online platform to buy and sell used cars, said three people, who spoke on condition of anonymity because the talks are not public.

SoftBanks is quiet

Negotiations have also progressed with Konfío, which helps small businesses obtain loans, two of the people said.

SoftBank declined to comment on this, Konfío did not respond and Kavak CEO Carlos García responded in an email that SoftBank has met with the founders of several companies in Latin America.

“We are always meeting with potential investors and building relationships for when the time is right. However, on our side to date we have no investment news to share”, Garcia wrote.

Exploring startups

Since announcing in March a five billion dollar innovation fund focused on Latin America, SoftBank has extensively explored new Mexican startups or startups.

SoftBank’s proposals reflect a greater interest of investors in technology companies in Mexico, the second largest economy in Latin America, whose ventures have lagged behind Brazil and Argentina.

The Japanese group, which has said that financial technology is an area of priority in its investment, had already indicated that it had an interest in Konfío, based in Mexico City, which was founded in 2014.

At a conference in the capital in May, Shu Nyatta, an investment partner at SoftBank, described Konfío as a new company that helps small businesses stay out of traditional banking.

SoftBank and the investments in Mexico

SoftBank made its first known investment in Mexico earlier this year in the Clip payments firm, which represented a disbursement of approximately $ 20 million.

Many American venture capital firms, such as Andreessen Horowitz, are looking more seriously at Mexico, said Daniel Green, a partner at Silicon Valley law firm Gunderson Dettmer who advises new businesses in the region.

“The market is having to catch up with Softbank … They are analyzing dozens and dozens of investments”, Green said.

Mexican new companies have long struggled to raise capital, but the arrival of SoftBank is starting to change that, said Roberto Charvel, an investor in MatterScale Ventures in San Francisco.

“Having someone huge like SoftBank really enters the financial gap required in a healthy business ecosystem”, he said.

Similar companies for Softbank

SoftBank is known for investing in similar new companies in different regions to facilitate partnerships and acquisitions and the group seems to be following that manual in Mexico.

Kavak, which was founded in 2016, could complement other SoftBank investments.

The conglomerate led a financing round of approximately $ 17.6 million on the Brazilian used car platform Volanty earlier this week with Kaszek Ventures of Argentina, which is also an investor in Kavak.

SoftBank also allocated $ 1.5 billion in the Chehaoduo Group of China, which has a leading used car site.

Also published on Medium.

Published inStartups

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