LATAM Business Weekly - Issue #4

SoftBank’s new LATAM fund, tech giants looking to acquihire in LATAM, Santander’s fourth-quarter earnings lifted by Brazil, and more from Latin America...

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SoftBank’s plans for new Latin American fund

Japan’s SoftBank is reported to be setting up a new Latin American fund, under the leadership of Chief Operating Officer Marcelo Claure.

This newly established fund, estimated to reach up to $7 billion, is planned to focus on venture investments (Bloomberg).

“In 2000, the company created SoftBank Latin America Ventures to support SoftBank Group companies in the region and invest in startups. In 2017, SoftBank plowed $100 million into Brazilian ride-hailing app 99. Last year, the Vision Fund invested $100 million in delivery startup Loggi, betting on Brazil’s rapid e-commerce growth.”

Advantages for U.S. tech giants looking to acquihire in Latin America

While Silicon Valley giants continue to invest in Latin American startups, affirming their confidence in the region, acquihiring should be the next logical step for U.S. business looking to expand their LatAm presence (Venture Beat).

Acquihires, made popular by Facebook and Google around 2010, allow large companies to hire talented and experienced teams with local experience: a huge advantage for business looking to expand into new regions.

According to Venture Beat, the top 3 advantages of acquihiring in Latin America include potential gains from the undervaluation of Latin American startups, streamlining global exposure, and the abundance of high-quality tech-talent in Latin America.

Spanish bank Santander reveals fourth-quarter earnings and significant profit lifted by Latin American economies

According to a recent Reuters article, the bank’s chairman, Ana Botin, stated “Latin America has remained an important engine for growth within the group, with especially strong progress in Brazil and Mexico.”

“Net profit in the fourth quarter rose by 1.4% from the previous three-month period to 663 million euros in Brazil, which is Santander’s largest market, while net profit for the whole of 2018 jumped 22.3 percent. In Mexico, net profit rose 8% in the fourth quarter to 206 million euros.”

International investors looking to expand into Latin American infrastructure

International investors looking to expand into Latin America energy infrastructure offers greater returns than developed markets in the U.S., according to a report published by Reuters this Tuesday.

The increasing interest and participation of private equity or infrastructure funds in the Latin American energy and infrastructure fields, while institutional money is expected to play a vital role.

“In the US specifically, borrowers’ access to cheaper public sources of funding has driven opportunistic investors to Latin America where private projects or acquisitions have more limited borrowing options and are more likely to tap banks and institutional investors for funding.”

As reported by Reuters, Alex Bertram, managing director and head of infrastructure financing for the Americas at ING, stated that “If investors are willing to take the cultural leap [into Latin America] and take a punt on the currency, then there are better returns available.”

Merger of Brazilian and Mexican-based scooter companies yields $150 million in fresh capital

The recent merger of two scooter companies- Mexico City’s Grinand Sao Paulo’s Yellow- has raised $150 million in fresh capital. The newly renamed Latin American firm, Grow Mobility, will continue operations in home markets in Mexico and Brazil while expanding to Chile, Colombia, and Uruguay.

According to insiders, Grow is expected to have $200 million in annualized revenue by June 2019, as reported by The Information.

Grow CEO Sergio Romo said

“The companies have about 100,000 scooters combined, in addition to 35,000 bikes, in six countries. Many of those haven’t yet been deployed. They now have access to two large scooter manufacturers; Yellow purchases scooters from InMotion, and Grin from Segway-Ninebot.”

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