SoftBank Invests $3 Billion in Latin American Tech

SoftBank Amplifies Investment in Latin American Technology Sector

SoftBank Group Corp. is significantly increasing its financial dedication to Latin America's burgeoning tech scene.

The Japanese investment firm has announced the establishment of the SoftBank Latin America Fund II, a second private investment fund specifically targeting technology companies within the Latin American region.

An initial commitment of $3 billion has been allocated to the new fund.

Building on Previous Success

SoftBank indicated that Fund II will actively seek opportunities to secure additional capital in the future.

This new venture expands upon the existing $5 billion Latin America Fund, initially unveiled in March 2019, previously known as the Innovation Fund with an original $2 billion commitment.

The firm reports a net Internal Rate of Return (IRR) of 85% for the initial fund.

As of June 30, SoftBank had deployed $3.5 billion across 48 companies, achieving a fair value of $6.9 billion.

Portfolio Highlights

The initial fund has fostered the growth of 15 unicorn companies, including QuintoAndar, Rappi, Mercado Bitcoin, Gympass, and MadeiraMadeira.

Recently, SoftBank participated in a $350 million Series D funding round for Ualá, an Argentine personal finance application.

Significant value increases have been observed within the portfolio, with Kavak and VTEX experiencing a 4.4x uplift, QuintoAndar a 2.6x increase, and Banco Inter a 3.5x rise in value (as of June 30).

Investments have been made throughout the region, encompassing Brazil, Mexico, Chile, Colombia, Argentina, and Ecuador.

Leadership and Team

Marcelo Claure, Executive VP and COO of SoftBank Group, spearheads the SoftBank Latin America Funds.

Shu Nyatta and Paulo Passoni serve as Managing Partners, leading the regional investment team.

Alex Szapiro, Operating Partner and head of Brazil for SoftBank, directs the fund’s operational activities.

The combined investment and operations teams comprise over 60 professionals based in Miami, São Paulo, and Mexico City.

Investment Focus

Fund II will provide capital to technology-driven companies across various stages of development – from seed funding to initial public offerings – throughout Latin America.

Key areas of interest include e-commerce, digital financial services, healthcare, education, blockchain technology, and enterprise software.

Masayoshi Son, Chairman and CEO of SoftBank, emphasized Latin America’s importance as a key economic region.

He stated that SoftBank remains dedicated to promoting technology adoption for the benefit of the region’s population.

Son believes the business landscape in Latin America presents unprecedented opportunities for innovation and disruption.

Future Outlook

Claure expressed that the performance of the SoftBank Latin America Fund has surpassed initial projections.

He anticipates that 2022 will mark a record year for IPOs in the region.

Shu Nyatta previously highlighted that technology in Latin America often prioritizes inclusion over disruption.

A substantial portion of the population remains underserved in various consumer categories, and many businesses lack access to modern software solutions.

This creates significant opportunities for entrepreneurs to build solutions for a broad range of individuals and businesses, fostering a more inclusive technological future.