Contxto – It’s said that actions speak more loudly than words. But, words tend to be more binding and less open for interpretation.
And Andre Maciel, Managing Partner at SoftBank, in a recent statement made the venture capital (VC) giant’s intentions clear.
During a conference held last Wednesday in São Paulo, the executive stated that the VC will be looking for lending startups in Latin America.
Related article: Mexico’s AlphaCredit to get investment worth US$125 million led by SoftBank
SoftBank will inject capital into loaning startups
At the event, Maciel stated: “After reviewing more than 300 companies since last year… it’s getting harder to find good deals in Latin America.” He went on to say that the VC was struggling to find startups with potential for scaling, but there are a few areas they’re still interested in.
One of these are startups that manage credit lines, as these types of fintechs consistently need funding to increase their loan portfolios.
Sources also report that while the VC will keep an eye out for healthtechs and edtechs that can scale up, as they can hit large, untapped markets. He also suggested an interest in startups working with solar energy.
Investment trends
The VC had previously contributed to Brazilian loaning startup, Creditas, in July of last year with US$231 million. Meanwhile, Mexican Konfío raised US$100 million with the Japanese firm in early December. And this week, it led a round for US$125 million for AlphaCredit.
SoftBank had hinted at its soft spot for loaning-type startups, but Maciel’s statement has removed any grounds for interpretation.
Moreover, this lines up with the Executive’s announcement last December, that in 2020 the VC would be making fewer but larger deals in Latin America. Back then he ominously added: “We haven’t made the largest transactions we have in mind yet.”
This isn’t even my final form
Now, there’s recent talk that some of SoftBank’s portfolio companies such as Uber, Rappi, and Didi are competing fiercely amongst each other for the regional market. So it’s not surprising if it slows down or ceases investments in delivery startups in the short-medium term.
It will also be interesting to observe whether its Latam loaning startups compete. Especially since both Konfío and AlphaCredit are located within the same country and share an interest in providing credit lines to small and medium enterprises (SMEs).
Let’s stay tuned, shall we?
Related articles: Tech and startups in Mexico!
-ML
