Japanese business conglomerate Softbank has launched yet another fund to invest in Latin America, this time it will target tech startups exploring artificial intelligence (AI).
The second fund will begin its journey with US$3 billion, with the company’s officials saying that they will raise more money in the months to come.
The US$3 billion brings to US$8 billion the total sum of money Softbank has earmarked for the region.
Softbank launched its first round, known as “innovation fund” in March 2019 with US$5 billion. As of June 30, 2021, the conglomerate invested around US$3.5 billion in 48 companies in the region.
The value of this investment has now increased by 85%, according to the company’s statement. In other words, the investment generated a net internal rate of return (RRR) of 85% in US dollar terms.
“There is so much innovation and disruption taking place in Latin America, and I believe the business opportunities there have never been stronger,” commented Masayoshi Son, Chairman of the Japanese group.
Fifteen of the startups Softbank invested in have now grown to become unicorns in the region.
“Digital transformation will continue to accelerate – in fact, we expect that 2022 will be the biggest IPO year in Latin America’s history,” stated Marcelo Claure, the fund’s chief in the region.
Investment firms like Softbank make billions of dollars in profit when the startups they own float their shares on a stock market.
Some of the startups Softbank invested in include Colombian delivery app Rappi and Mexico’s second-hand car broker Kavak, Brazilian real estate technology firm QuintoAndar and crypto exchange Mercado Bitcoin.
“Latin America is a critical part of our strategy – this is why we are expanding our presence and doubling down on our commitment with Marcelo at the helm,” Masayoshi Son added.