Japanese SoftBank invests close to US $ 20 million in Mexican fintech Clip
The cash injection of the technology conglomerate was part of a round that raised approximately US $ 100 million. After the transaction, Clip's valuation increased to between US $ 350 and US $ 400 million. The total funding of Clip to date is approximately US $ 160 million.
SoftBank closed the agreement shortly before announcing in March that it would launch the US $ 5 billion Innovation Fund that will focus on Latin America. Mexican investors hope that the fund can mean a big change for young companies struggling to raise funds locally.
SoftBank announced a US $ 1 billion investment in the Colombian Rappi delivery application last week, citing the rapid growth of the startup as a sign of opportunity in the region.
The US $ 20 million investment in Mexican fintech Clip is unusually small for a company that normally runs funding rounds and writes checks at least four times that size. SoftBank is also famous for managing the largest technology fund in the world, with US $ 100,000 million in the capital.
But, unlike Asia and the United States, Latin America is a nascent technology market where new companies typically have lower valuations and face less competition, which means that even small injections of cash drive growth. In Mexico, new companies rarely raise US $ 100 million at one time.
Typically, SoftBank pours cash into the most promising companies in each sector within each region it targets, with the goal of helping companies scale rapidly.
Mexican fintech Clip, founded in 2012, offers a mobile credit and debit card reader that adapts to smartphones. Companies throughout Mexico, such as cafes, wineries and street vendors, have adopted the service as a simple and inexpensive way to accept cards instead of cash.
Investors see Mexico as an attractive market for fintech because many people do not have bank accounts but do have access to mobile phones.