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Daily briefing - 17 September 2019

The VC investment model works by throwing enough mud at the wall until some sticks. Even Masa Son himself grew worried about the WeWork IPO. It's a tough market out there. One minute, you've got the hottest tech property in the world and next minute you're holding a bunch of expensive ten-year leases in the City while your fans are backing away slowly at first and then sprinting for the exit. It's the Lehman moment for slow learners. Softbank still has a dizzying array of investments, including Slack (messaging). indoor vertical farming (Plenty), online therapy, WeWork (mismatched leasing business), Airbnb (regulatory arbitrage), online auto marketplaces, self-driving cars and tons of food delivery businesses along with insurance marketplaces. Only Masa sees how these will all effortlessly knit together, and it's nothing the world's biggest investors can't handle. However, Softbank also made some big fintech bets that are actually making money, including Alibaba, SME lender Kabbage, Indian e-commerce and payments business PayTm, not to mention OakNorth.

Yes, Softbank is not shy of buying actually banks, of which it is not one itself, despite the name. And it's got a plan for Latin America, and a five billion dollar fund, much of which is going into Brazil, and tech-based lenders including Creditas and Banco Inter. "Banco Inter, which listed its shares less than two years ago, has been growing at a breakneck pace, with the number of its clients surging to 2.5 million in June, up more than 250% from a year earlier," writes Reuters. "SoftBank is making a play in Brazil's banking sector with the proceeds from its $5 billion Latin America fund, raised in March. In Brazil, the top five banks hold 82% of total assets. Besides Banco Inter, the Japanese conglomerate also invested in the lending platform Creditas, which offers loans backed by assets like homes and autos, a market nearly untouched by big banks."

Mastercard and Visa were among the businesses that invested in the Series C fundraising for digital payments business Plaid last year, the company has revealed. The API builder allows users to access their bank account information from inside other applications. "It could signal that the startup intends to move more broadly into payments, although it didn't make any specific assertion it was doing that in the announcement," writes TechCrunch. "Plaid helps developers connect to financial services in a similar way that Stripe helps them connect to payments or Trello to communications tools. By having access to a set of tools from Plaid, developers can build into their applications access to bank information and other financial data without having to have knowledge about how to connect to thousands of different banking systems. Former CTO and co-founder William Hockey explained to TechCrunch what this meant in an announcement earlier this year: 'Everybody in the U.S. can actually use this product now. And some of those connections are super quick and instant, and some of those maybe take a day to verify, but what we're doing is we're wrapping all of that in the product. And so you as a developer, you don't have to worry about all of the different authentication methods at some of these banks', Hockey explained."

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