SoftBank Invests in GBM: $150M Boost for Mexico City Platform

GBM Secures Investment from SoftBank

Grupo Bursátil Mexicano (GBM), a Mexican stock market investment platform established 35 years ago, initially concentrated on delivering investment services to high-net-worth individuals and both domestic and international institutions.

Throughout the last ten years, the Mexico City-based brokerage has significantly increased its digital capabilities. Furthermore, over the past five years, its business model has been adapted to extend services to all Mexican citizens, offering the same products available to substantial estates.

Investment Details

GBM has announced a funding round of “up to” $150 million from SoftBank, channeled through the Japanese conglomerate’s Latin America Fund, resulting in a valuation “exceeding $1 billion.” This investment is being executed via a subsidiary of GBM and is not subject to any contingencies, as stated by the company.

According to Co-CEO Pedro de Garay Montero, GBM has developed an application, GBM+, which manages and invests client funds through three distinct tools: Wealth Management, Trading, and Smart Cash.

Rapid Growth and Market Position

The previous year was described as “historic” for the company. GBM experienced substantial growth, increasing from 38,000 investment accounts in January 2020 to over 650,000 by the end of that year.

This expansion continued into the first quarter of 2021, reaching over 1 million accounts – a more than 30-fold increase since the beginning of 2020.

For perspective, the National Banking and Securities Commission (CNBV) reported only 298,000 brokerage accounts in Mexico at the close of 2019. This figure rose to 940,000 by the end of 2020, with GBM controlling a significant portion of these.

Client Base and Future Plans

While the majority of GBM’s clientele are individual investors, the company also serves “most of the largest investment managers globally,” including prominent corporations like Netflix, Google, and BlackRock.

Specifically, GBM provides services to 40% of Mexico’s largest publicly traded companies and a substantial number of ultra-high-net-worth individuals.

The newly acquired capital will be partially allocated to “heavily” investing in customer acquisition strategies.

Montero indicated that half of the 450-person team are technology professionals, and the company intends to continue expanding its workforce as it concentrates on growth within its B2C and B2B sectors and explores new areas of business.

“We are enhancing our already comprehensive financial education resources,” he added, “empowering Mexicans to manage their finances effectively. GBM’s core mission is to transform Mexico into a nation of investors.”

Focus on the Mexican Market

Given Mexico’s large population – exceeding 120 million – and a GDP surpassing $1 trillion, GBM is strategically focused on strengthening its presence within the country.

“The financial services sector is largely dominated by major banks, often proving inefficient, costly, and delivering a subpar client experience,” Montero explained to TechCrunch. “This has resulted in fewer than 1% of individuals possessing an investment account.”

GBM plans to reach clients through its own platform, internal advisors, and an expanding network of external advisors, offering the best investment products and user experience.

Regarding institutional clients, Montero believes there is “enormous potential” in serving both large corporations and SMEs “who have historically received limited services from banks.”

SoftBank’s Perspective

Juan Franck, Investment Lead and Head of Mexico for SoftBank Latin America Fund, asserts that the retail investment landscape in Mexico is reaching a pivotal moment.

“Investment culture in Mexico has traditionally been lower compared to global standards, even when contrasted with other Latin American nations like Brazil,” he noted. “However, this is rapidly changing as technology provides Mexicans with increased financial education and a wider range of investment options.”

Franck stated that SoftBank was particularly impressed by GBM’s “clear vision and strategic approach.”

Despite its long-standing history, SoftBank recognizes the significant potential in the robust digital platform that GBM has developed.

“GBM is the leading brokerage in Mexico based on trading volume and the number of broker accounts,” he concluded. “The company successfully combines extensive industry expertise with an entrepreneurial spirit to revolutionize wealth management in the country.”