Japanese investment firm SoftBank Group is in talks with two startups in Mexico in a bid to continue to search out opportunities in the Latin American market, according to a report by Reuters citing sources familiar with the matter.
The company is reportedly in talks with online used car site Kavak and FinTech Konfio, which aids small businesses in getting loans.
Kavak CEO Carlos Garcia told the news outlet that SoftBank has been meeting with a lot of startups in the Latin American region.
“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 recently announced a $5 billion Innovation Fund solely focused on Latin America, and it has been researching startups in Mexico especially. Mexico is Latin America’s second biggest economy, but its startup sector is trailing Brazil and Argentina. SoftBank is working to change that.
In May, SoftBank Investment Partner Shu Nyatta talked about Konfio as a startup that aids businesses who get shut out of traditional banking systems.
“It’s about bringing services through tech to people who could not access them before,” he said.
Earlier this year, SoftBank invested about $20 million in Mexican startup Clip. Because of Softbank’s involvement in the Mexican startup sphere, more American investment firms are giving the country a closer look.
“The market is having to play catch-up to SoftBank. … They are analyzing dozens and dozens of investments,” said Daniel Green, a partner at Silicon Valley law firm Gunderson Dettmer.
Roberto Charvel, an investor at MatterScale Ventures in San Francisco, said that it has traditionally been very hard for startups in Mexico to raise capital, but that SoftBank is changing that.
“Having someone huge like SoftBank coming in really fills the financing gap required in a healthy entrepreneurial ecosystem,” he said.