Japanese capital group SoftBank has invested $20 million in Clip, a Mexican FinTech startup that offers a mobile credit card reader for smartphones. Businesses all across Mexico have adapted the technology as a simple and low-cost way to accept payment, according to Reuters.
The investment is one of the first Latin American deals by SoftBank, as it launches its $5 billion tech fund in the area.
The money was part of a $100 million funding round for Clip, and the company’s valuation rose to between $350 and $400 million. The company’s total funding amount so far is about $160 million.
Other investors include New York-based investment company General Atlantic.
Some companies in the region think SoftBank’s tech fund will help with growth in the region.
“Growth will be faster, more dramatic and more competitive,” said Fernando Gonzalez, a partner at Virginia-based QED Investors and CEO of Mexican FinTech startup Coru.
SoftBank also recently announced it will invest $1 billion in Colombian delivery startup Rappi, saying the company’s quick growth shows it has a lot of potential. SoftBank is also looking for eCommerce, mobility and healthcare companies to invest in.
Though the $20 million amount seems small for an investment firm that usually invests in the billions, the tech market in Latin America is younger and smaller, and even smaller amounts of cash can trigger large growth, the report noted. It’s rare for a Mexican startup to get $100 million in a single funding round.
The typical company SoftBank targets is one it thinks is the most promising, and it wants to help such firms scale quickly and oust competitors.
Clip’s business was founded in 2012, and its model is seen as attractive because Mexico has many people without bank accounts but who do have access to mobile phones, according to Eric Perez-Grovas, general partner at local investment firm Jaguar Ventures.
“You have the perfect elements to create FinTech giants in this country,” he said.