The incursion of SoftBank Group in Latin America, a wave of multi-million dollar agreements linked to a wave of “unicorns” that changed the landscape of startups in the region, is just beginning.
The Japanese tech giant still has about $ 4,000 million left in the $ 5,000 million fund it launched in March for new technology companies in the region and has its sights set on some 300 targets, according to André Maciel, managing partner of SoftBank Group International . About 200 of them are in Brazil, he said.
The feeling of an oportunity
“We already feel that the opportunity in the region is greater than we originally thought”, said Maciel, head of SoftBank in Brazil and structured transactions, in an interview at the company’s offices in Sao Paulo. “There are many things outside Brazil that we have not yet been able to see”.
For the next round, Maciel said he sees companies in the health and real estate industries, in addition to the option of raising bets in financial and mobility companies.
SoftBank investments make up a large part of the total market. According to data from PitchBook, investors invested US $ 2.220 million in startups in Latin America last year, more than double that in 2017. So far in 2019, the agreements total US $ 2.1 billion and SoftBank-backed transactions represent the largest part of the total.
“This is the kind of capital that has never been seen before in Latin America”, said Maciel.
About SoftBanks and its operations
SoftBank is not the only venture capital firm that invests money in startups in the region. Nu Pagamentos, the six-year-old fintech known as Nubank, announced a $ 400 million round of financing led by the venture capital company TCV, one of Netflix and Spotify’s first sponsors, in its first major investment in Latin America. Tencent Holdings and Sequoia Capital, two existing Nubank investors, added money to the fund.
Beyond injecting cash into Latin American companies, in some cases more than tripling their valuations, SoftBank also invests in local venture capital funds. In June, SoftBank announced a partnership with Valor Capital Group, a fund with about US $ 300 million invested in 37 Brazilian companies and US companies seeking to expand in Brazil.
The power of an investment
“In some cases we have more than doubled the investment firepower available for those funds”, Maciel explained. “We don’t have the scope and structure to analyze smaller transactions, but those funds do”.
Maciel, a 17-year veteran of JPMorgan Chase, is one of Marcelo Claure’s three lieutenants in the region and the only one based in Sao Paulo. The other two are Shu Nyatta, who travels between the Miami and Silicon Valley offices, and Paulo Passoni, who worked at Third Point for seven years and lives in Miami. The trio is accountable to Claure, Bolivian-American executive director of SoftBank Group International who oversees the expansion in Latin America.
Also published on Medium.