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Japan's Softbank Aiming For Investments In More Mexican Startups

Japan's Softbank Aiming For Investments In More Mexican Startups
The Mexican used car platform Kavak and financial technology firm Konfio are the two latest startups that Japan's SoftBank Group Corp is interested in investing and negotiations to that end is ongoing currently, according to reports.
Analysts said that the move highlights the growing interest of the Japanese investment company in Mexico and it is investing in companies in Latin America.
Kavak is an online platform for buying and selling secondhand cars. The other company called Konfio is one that helps small businesses in securing loans.
No comments on the issue from SoftBank were available in the reports. Media reports quoted Kavak Chief Executive Carlos Garcia saying the SoftBank has been holding meeting with a number of founders of Mexican and Latin American startups.
"We are always meeting potential investors and building up relationships for when the time is right. However, on our side, as of today we do not have any investment news to share," Garcia said.
SoftBank has widely scouted Mexican startups ever since the company announced in March the launch of its $5 billion Innovation Fund that is focused on Latin America. The increased interest among investors in technology companies in Mexico is highlighted by the activities there of SoftBank. Mexico is the second largest economy of Latin American and its startup ecosystem has not grown as rapidly as those in Brazil and Argentina.
Financial technology is a priority investment area for the Japanese company and it had already said that the 2014 founded Mexico City-based Konfio was on its watch list.
Konfio was described as a startup helping small companies shut out of traditional banking, by SoftBank Investment Partner Shu Nyatta while speaking at a conference in the capital in May. "It's about bringing services through tech to people who could not access them before," he said.
The first investment iof SoftBank in Mexico was that a $20 million investment i payments firm Clip made earlier this year.
According to Daniel Green, a partner at Silicon Valley law firm Gunderson Dettmer who advises startups in Latin America, a more serious look at Mexico is being taken by a number of United States based venture capital firms, such as Andreessen Horowitz. "The market is having to play catch-up to SoftBank. ... They are analyzing dozens and dozens of investments," Green said.
Roberto Charvel, an investor at MatterScale Ventures in San Francisco said that raising capital has been an issue for Mexican startups and that is fast getting changed with the arrival of SoftBank in the scene. "Having someone huge like SoftBank coming in really fills the financing gap required in a healthy entrepreneurial ecosystem," he said.
The investment strategy that is typically followed by SoftBank is to take up stakes in similar startups across different regions so that the companies are helped in partnerships and acquisitions. It is following the same strategy in Mexico as well.
SoftBank's other investments could be complemented by the 2016 founded Kavak.

Christopher J. Mitchell

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