The Japanese conglomerate SoftBank recently gave the green light to its Latin American fund to invest the remaining $3 billion worth of capital from the fund into the region’s tech companies and startups.
SoftBank’s fund for the region has invested money into 30 companies in Latin America. The SoftBank Innovation Fund said it will look for post-pandemic opportunities in Latin America and the Caribbean, especially when it comes to e-commerce, fintech, and insurtech startups.
“COVID-19 has had an impact across the board, but where it is most clear is in e-commerce,” SoftBank managing partner Paulo Passoni told S&P Global this week. “We can see this big-time growth across our portfolio. E-commerce is a very strong theme for the next ten years in Latin America as it catches up with the rest of the world.”
Last week, Bloomberg reported that SoftBank is slated to lead a $120 million funding round for the Brazilian e-commerce company MadeiraMadeira.
Latin America currently has one of the lowest growth rates of any region in the world, which has only gotten worse due to the pandemic. A collective recession of 8 percent of the region’s GDP is expected to follow.
Still, SoftBank has already invested billions into the region since 2019, including a $1 billion investment behind the Colombian delivery giant Rappi.
“There is an old saying from Amazon’s Jeff Bezos: “Your margin is my opportunity.” I think it is the same thing with the economic profit of Latin American banks,” Passoni said. “Return over equity against the risk-free rate in each country is still higher in Latin America than almost anywhere across the globe.”
In October, the Mexican car purchasing platform Kavak became the latest startup in the region to reach unicorn status following big investment from SoftBank.