BBG: SoftBank-backed Greensill buys Colombia fintech to grow in LatAm

BLOOMBERG reports:

Greensill Capital, a firm backed by SoftBank Group Corp. that helps businesses fund their operations, is acquiring Colombia-based Omni Latam to speed up growth in Latin America.

The closely held fintech companies didn’t disclose a price for the all-stock deal, which is aimed at helping London-based Greensill expand into Latin America, including Brazil and Mexico, according to Greensill. Omni provides working capital to small and midsize businesses in Colombia and Chile, and Greensill offers supply-chain finance globally, making loans companies use to pay their suppliers.

“We realized Latin America requires very special skills, and yet at the same time the region has a very significant working-capital gap that we estimate to be on the order of $750 billion,” Greensill founder and Chief Executive Officer Lex Greensill said in an interview. “So we found a company, a team, a technology that is a perfect fit considering the values and the approach of the Greensill organisation.”

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You may also want to read this by the FT: “SoftBank invests in Credit Suisse funds that finance its technology bets” (sub may be required). An excerpt here:

SoftBank has quietly poured more than $500m into Credit Suisse investment funds that in turn made big bets on the debt of struggling start-ups backed by the Japanese technology conglomerate’s Vision Fund.

SoftBank made the investment into the Swiss bank’s $7.5bn range of supply-chain finance funds, said three people familiar with the matter. Credit Suisse touts these funds to professional investors, such as corporate treasurers, as a safe place to park their cash in the short-term debts of seemingly diversified companies.

Marketing documents sent to investors show that these funds have ramped up their exposure to several start-ups in the Japanese group’s $100bn Vision Fund over the past year. This has coincided with a disastrous stretch in which $18bn was wiped off the equity value of these technology bets.

At the centre of the circular flow of funding is Greensill Capital, a Vision Fund-backed company that says it is “making finance fairer”. The London-based firm, which employs former British prime minister David Cameron as an adviser, selects all of the assets that go into the Credit Suisse funds under an agreement dating back to 2017. 

The arrangement has allowed SoftBank effectively to provide financial assistance to other Vision Fund companies by paying their suppliers upfront but through a fund commingled with other investors and financing other companies. 

This means external investors also bear the risk of these companies failing to pay their debts, which one person familiar with the arrangement said could prove problematic if they were unaware of SoftBank’s substantial interest. 

To read the full FT post, please click here.