SoftBank Deepens Mexico Bet With $100 Million for Lender Konfio

kaszekeditor web-pick
9 December 2019

Source: https://www-bloomberg-com.cdn.ampproject.org/c/s/www.bloomberg.com/amp/news/articles/2019-12-03/softbank-deepens-mexico-bet-with-100-million-for-lender-konfio

SoftBank Group Corp. is leading $100 million in funding for a Mexican small-business lender, its third investment in the country since the Japanese technology giant announced a multibillion-dollar foray into Latin America.

The Mexican company, called Konfio, will use the funds to expand working-capital loans and introduce new products, said investor-relations director Gregorio Tomassi. Founded in 2013, Konfio lends money to small and medium-sized companies, which are often underserved by traditional banks.

Konfio’s loans average $12,000, significantly below banks’ average business loan of $40,000, Tomassi said. Users can fill out an application in as little as eight minutes and can have the money in their pocket in the following 24 hours without any collateral, he said.

“We consider ourselves a tech company that’s focused on resolving one of the biggest problems for small and medium-sized businesses, which is access to credit,” Tomassi said. “We grant quick loans based on technology, alternative data sources, artificial intelligence and data science.”

SoftBank launched a $5 billion fund in March aimed at new technology companies in Latin America, and has its sights on roughly 300 targets. SoftBank’s expansion in the region is being overseen by SoftBank Group International’s chief executive officer, Marcelo Claure, who was also recently appointed WeWork’s new executive chairman.

The Japanese firm has already doled out more than $1 billion of its fund, with several investments in Brazil, including MadeiraMadeira Comercio Eletronico SA, Loggi Tecnologia Ltd. and Banco Inter SA, and Rappi SAS in Colombia. The fund’s first investments in Mexico were in used-car sales platform Kavak and payments firm Clip.

Early Investors

The company’s investment in Konfio will be used to expand working capital loans and introduce new products, Tomassi said. Other investors in the fourth-stage funding include QED Investors, Kaszek Ventures and Vostok Emerging Finance Ltd., who were all early backers in the Mexico City-based startup. Konfio previously raised around $300 million in capital and credit lines, counting the World Bank Group’s International Finance Corp. as a backer.

New products that Konfio is considering include providing businesses analysis of customers’ credit reports and expanding an online marketplace named Konsiento, where businesses can find legal services, website designers and office supplies at a discount. On average, Konfio’s clients grew sales by 28% in the six months after receiving a loan, compared to the year-earlier period, Tomassi said.

Last month SoftBank reported its first operating loss in 14 years of 704.4 billion yen ($6.5 billion) after writing down the value of a string of marquee investments. It reported 537.9 billion yen of unrealized losses in investments including Uber and WeWork. Its signature Vision Fund — the world’s single largest pool of startup investments — reported a 970.3 billion yen loss in the quarter.

Source: https://www-bloomberg-com.cdn.ampproject.org/c/s/www.bloomberg.com/amp/news/articles/2019-12-03/softbank-deepens-mexico-bet-with-100-million-for-lender-konfio