SoftBank invests $200m in Brazil’s largest crypto exchange Mercado Bitcoin

Mercado Bitcoin, the largest bitcoin exchange in Brazil, raised $200m in a Series B round from the SoftBank Latin America Fund. 

The investment signifies the largest B round in Latin America’s history and SoftBank’s largest investment in a Latin America crypto company, 2TM Group, Mercado Bitcoin’s parent company, said. The investment round grants 2TM Group a $2.1bn valuation.

The funding comes just months after São Paulo-based Mercado Bitcoin’s Series A round in January of 2021, which was co-led by G2D/GP Investments and Parallax Ventures, with participation from HS Investimentos, Gear Ventures, Évora and Genial. JPMorgan and DealMaker. 2TM Group is the second Latin American crypto unicorn after Bitso’s $250m Series C in May with a $2.2bn valuation.

Following the investment, the company plans to expand in Latin America, Dagnoni said, saying he contemplates branches in Argentina, Chile, Colombia and Mexico. The expansion will take place either organically or through acquisitions.

Led by Roberto Dagnoni, executive chairman & CEO, and Gustavo Chamati, co-founder and board member, 2TM Group is a Brazilian holding company managing a range of digital asset services and solutions.

Mercado Bitcoin plans to expand its team to up to 700 employees by the end of the year and launch a digital wallet, MeuBank, as well as a digital custodian, Bitrust. Both projects are currently awaiting regulatory approval from Brazilian authorities.

In 2019, 2TM Group became the first company in the world to tokenize public debt assets. Then in 2020, the company issued Futecoin, the world’s first digital asset based on FIFA’s solidarity mechanism.

It also comes after an impressive first half of the year for the company. The firm has signed about 700,000 new users up between January and May 2021 and now has a client base of 2.8 million overall. Mercado Bitcoin’s trade volume also increased to $5bn, surpassing the total for its first seven years combined.

Dagnoni said, “Millions of people around the world are realizing that digital assets and cryptocurrencies are both innovative technologies and efficient stores of value – Brazil is no exception to that trend.

“This series B round will afford us to continue investing in our infrastructure, enabling us to scale up and meet the soaring demand for the blockchain-based financial market.”

Echoing a similar sentiment, Chamati added, “Mercado Bitcoin and its sister companies have demonstrated both innovation and leadership in the space. As we’ve developed a scalable market infrastructure, we have become the most trusted crypto brand in Brazil. This unique positioning has allowed us to capitalize on the surging interest in cryptocurrencies in both Brazil and Latin America more broadly, resulting in the significant expansion of our market share in the past year and paving the way for continued growth.”

SoftBank has been active in Latin America as of late. In early June, the Japanese investment conglomerate said it would invest “up to $150 million” in Grupo Bursátil Mexicano (GBM), a 35-year-old investment platform in the Mexican stock market.

Commenting on the round, SoftBank CEO Marcelo Claure said, “We’ve been impressed by 2TM Group’s understanding of the Brazilian ecosystem, as well as their contribution to the evolving regulatory framework in Brazil, all of which have positioned it at the forefront of the Latin American blockchain revolution and as a defining player in the cryptocurrency explosion in Brazil.”

The SoftBank capital raise comes at a time when investor sentiment on cryptocurrencies has soured amid regulatory crackdowns in China, Britain and Japan. That has led to outflows from crypto investment products and funds the last few weeks.

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