Japan’s SoftBank Contemplates Investment In Brazil

SoftBank Group is considering a gamble on Brazil and might advise high-growth firms to invest in the country, Reuters reported on Friday (Sept. 21).

“We have around 40 companies that fit in Brazil,” the group’s head in Brazil, André Maciel, told the news outlet during an event at Cubo, a technological hub funded by Itaú Unibanco, the largest private bank in Latin America.

“Brazil still has room to create more unicorns,” Maciel said, adding that SoftBank sees opportunities in Brazil in the areas of health, logistics, transportation and agribusiness.

Although he did not explain, Maciel also said that SoftBank was going to announce a large investment in Brazil.

Japan’s SoftBank is a worldwide investor and has already invested in Brazil with the U.S. office-sharing startup WeWork.

SoftBank also said in July that it was leading a $231 million funding round for the Brazilian lending startup Creditas in a bid to shake up competition in the traditional financial market. In Brazil, 82 percent of all assets are controlled by five banks. Creditas is aiming to change that. Creditas had a recent valuation of $750 million and said the capital would help it to expand to other Latin American countries.

A portion of the company’s proceeds is going to be used in other places in Latin America, like Mexico, where Creditas plans to offer asset-backed credit. There isn’t a lot of domestic credit offered in Mexico versus Brazil, with the rate being around 54.5 percent of gross domestic product. In Brazil, the rate is 114 percent.

Creditas was started in 2012 by Sergio Furio, a Spanish former consultant and now the company’s chief executive. The company has historically offered loans that have lower interest rates because they’re secured by assets like cars and homes.

“While there is a huge demand for consumer lending in Brazil, the market is inefficient,” said Akshay Naheta, managing partner of SoftBank Investment Advisers, an adviser to the Vision Fund.