This is the 10th investment in Brazilian startups for Softbank, which announced the establishment of a US$5B Latin American fund this May.
Softbank, Gávea Investimentos (represented by Armínio Fraga, former central bank president) and Constellation Asset Management led this investment, which will be utilized mainly in overseas expansion and R&D.
Outline of VTEX
Sales in 2018 were US$179M with a CAGR of 40% over the past five years. This year’s sales forecast is US$250M. VTEX has 15 overseas offices (US, UK, Italy, Spain, Romania, and Latin America), with 52% of sales coming from outside Brazil. The number of employees exceeds 600 and we can see the remarkable growth. VTEX planned two acquisitions by the end of the year.
Background from Starting a Business
VTEX was established in 2000 as Textile Showcase. Emphasis was on software development, and the first product was a sales force automation program. Since the business with Walmart in the mid-2000s, rapid growth has begun.
In 2011, US$7M was invested by South African Naspers Fund, and the number of customers at that time was 232. In those days, the number has grown to +2,500 in 28 countries (Major customers: Apothecary, Whirlpool, Electrolux, Sony, Walmart, L’Oréal , Coca-Cola, Nestlé, Motorola, etc.).
VTEX has grown for almost 20 years without large-scale investment from venture capital, but been looking for new funding since last year, taking into account competition with giant players such as SAP. VTEX also expects business supports from the three companies involved in this investment. Gávea and Constellation will boost VTEX’s business in terms of compliance and corporate governance, and Softbank will do so on global expansion.
Softbank’s South American Investment Strategy
Due to the WeWork problem and the deficit of “Makka-kka”, there is no denying the global anxiety about SoftBank. On the other hand, as the Softbank representative implied at the Brazil Japan Open Innovation Forum last Monday, there seems to be no noticeable policy shift on the South American investment strategy immediately” as this investment in VTEX indicated.
We will continue to disseminate information to you while watching Softbank trends in South America and Brazil.