Mexican payment company Clip received a $20m investment from Softbank

Softbank has invested $20 million in Clip, a payments company based in Mexico, and set up a $5 billion technology fund there, according to Reuters.

It was one of softbank’s first investments after setting up a $5bn innovation fund in Latin America in March.

After softbank’s investment, Clip has been valued at $350 million to $400 million, people familiar with the matter said. This information has also been confirmed by Clip, but neither side has disclosed the specific details of the transaction.

It is understood that while the amount of this investment is smaller than other SoftBank investments, because Latin America is an emerging technology market, startups are usually undervalued and less competitive, which means that even small cash injections can drive a lot of growth. In Mexico, startups rarely raise 100 million of dollars in one lump sum.

In fact, the more than 60% people in Latin America are currently not covered by mainstream financial services, who do not have credit cards, debit cards, or even bank accounts.

Despite the efforts of ngos and governments, the number of people in Latin America without a bank has fallen by little, by an average of only about 2% a year since the early 2000s. But at the same time, smartphone users have been growing at about 12 percent a year in recent years.

The huge gap in traditional financial services and the rapid growth of smartphone penetration have encouraged more mobile payment options, with a wide variety of start-ups being born.

Some version of Stripe,Square,Paypal or VENMO can now be found in every major Latin American innovation city. So far, however, the Latin American Online and mobile payment services market has not seen the dominant players, there is a larger layout space.

In Latin America, SoftBank is stepping up its layout, and in addition to Clip, SoftBank announced in Tuesday that it had invested 1 billion of dollars in support of Colombia’s Express app, Rappi. SoftBank has revealed that it sees opportunities in Latin America, including fintech, e-commerce, healthcare and mobile applications.

Founded in 2012, Clip mainly offers credit card readers on the smartphone side, including cafes, corner shops and street vendors.