Softbank is reinvesting $3 billion in Latin America

Softbank Group Corp unveiled a $3 billion fund to invest in Latin American technology businesses on Tuesday, hoping to expand on the success of its first fund for the area, which has already spent most of its money. The Japanese giant said in a statement that it aims to invest in both public and private digital companies, and that the fund may raise additional funds in the future.

SoftBank’s increased commitment on Latin America comes at a time when venture capital is expanding in nations like Brazil and Mexico, and it comes on the heels of a decision to halt new investments in China. “There is so much innovation and disruption taking place in Latin America, and I believe the business opportunities there have never been stronger,” SoftBank Group’s chairman Masayoshi Son said in the statement. “Latin America is a critical part of our strategy.”

SoftBank’s first $5 billion Latin American fund was formed in 2019 by executive vice-president and Chief Operations Officer Marcelo Claure, at a period when no deep-pocketed investor was handing out large sums to entrepreneurs in the region. It has made $3.5 billion in investments in 48 firms spanning from education to banking and logistics, with a total market value of $6.9 billion. The majority of the enterprises in its portfolio are still privately held. Nonetheless, companies such as Banco Inter SA, which SoftBank purchased when it was already publicly traded, and e-commerce software platform VTEX, which went public in July, aided the fund’s performance in the fourth quarter. The initial fund’s results exceeded SoftBank’s projections, according to COO Claure, who will supervise the new fund.