Miami Tech & Startup News

SoftBank committed to invest $100M in Miami startups. It’s now at $250M – and counting

SoftBank committed to invest $100M in Miami startups. It’s now at $250M – and counting

At this milestone, SoftBank’s Shu Nyatta shares his thoughts on Miami as a startup, as a global city in the making, and more

In January, during a CafecitoTalk with Miami Mayor Francis Suarez, SoftBank Group International CEO Marcelo Claure announced the global technology investment giant committed to invest $100 million in tech startups already based in the Miami area or companies that are expanding to or planning to move here. They called it the Miami Initiative.

Miami is incredibly close to my heart,” said Claure, a serial entrepreneur who built and sold Brightstar in Miami before moving on to Sprint and then joining SoftBank. ”We’re proud, happy, and hopefully  contributing to making Miami in the future one of the most important tech hubs in the world.”

How’s the initiative going? Here’s the news:  Since early this year, SoftBank has blown past $100 million. SoftBank has now invested more than $250 million to date, just nine months after the original commitment.

Twelve companies have been recipients of the $250 million in funding.  Half of them are homegrown Miami-based companies or had relocated their companies here before 2021. The other half are expanding to Miami or are planning to do so. From seed stage to unicorns, the dozen companies represent sectors from fintech, blockchain and crypto to edtech, medtech, cybersecurity and sleep fitness.

More deals are in the works, and there’s no plans to slow down.

“The Miami initiative was an initial expression of our excitement about being here. This is how we work at Softbank Group International — we experiment and then we build… Where we see progress, we keep building, we keep investing, not just with capital, but also with people and infrastructure,” said SoftBank Group International Managing Partner Shu Nyatta, who recently relocated with his family to Miami from the San Francisco Bay Area and had been spending a lot of time here since 2019.

Shu Nyatta, Managing Partner, SoftBank Group International

 “We’re building our presence in Miami. It is going to be one of the biggest SoftBank presences anywhere in the world,” Nyatta said. “We’re pleased to be here, we’re very excited, and we’re here to stay.”

Indeed, while significant, the Miami Initiative is just one part of SoftBank’s growing impact. It is separate from the much larger global SoftBank Vision Fund that is a big backer of Miami-based unicorn REEF Technology, which plans to hire over 1,000 people in South Florida over the next three years. SoftBank Group International is headquartered in Miami under Claure. It includes operations for the  SoftBank Latin American Fund, which started as a $5 billion fund but SoftBank recently committed $3 billion more. Also based here under SoftBank Group International is the $100 million SoftBank Opportunity Fund, an early-stage fund that focuses on supporting founders of color.

In addition to startup investments, SoftBank Group International has also been investing in talent development for startup operations, data science and AI through its SoftBank Operator School and partnerships with groups such as Data Science 4 All / Correlation One and local colleges. What’s more, SoftBank’s team in Miami has continued to grow, and is nearing 100 employees.

“We will  find ways to keep investing in Miami,” says Nyatta. ”There is no question that what we are calling the Miami Initiative will eventually just become SoftBank’s presence in Miami supporting Miami in every possible way.”

Here are the 12 companies that were funded as part of SoftBank’s Miami Initiative, so far:

CEO Joanna Smith has been growing edtech company AllHere’s presence in Miami.

  • AllHere, founded in the Boston area by Miami native Joanna Smith, is on a mission to provide K-12 school districts with personalized technology solutions to improve student outcomes. SB Opportunity Fund participated in AllHere’s $8 million Series A round in June. Since the funding, 50% of AllHere’s full-time team of 40 is based or works out of Miami, including CEO Smith and  VP of Client Success Phillip Shaver, who previously was Broward County Public Schools’ District Director of Attendance. His knowledge and expertise of the region has been a pivotal part of AllHere’s strategy to extend national reach, Smith said. In the coming months, AllHere is hoping to reach more South Florida schools and districts, as well as to expand the Miami team.
  • Atom Finance, a New York startup with an a consumer investment platform, opened a Miami office on the heels of raising a $28 million Series B funding round led by SoftBank Latin America Fund in June. The company said at the time it expects to add up to 20 employees in Miami over the next 12 months. Founder and CEO Eric Shoykhet is heading the Miami office, which makes it easier to do business with Latin America, he has said.
  • Betterfly is making it easier and more affordable for companies in Latin America to provide insurance coverage to their employees by providing a fully digital benefits subscription that gives each employee smart life insurance, which, accompanied by positive lifestyle choices, grows at no cost. “We want to democratize access to physical, mental and financial wellbeing, and empower people to become the best version of themselves while making an impact on their families and communities,” said its founder and CEO, Eduardo della Maggiora, who recently moved from Chile to Miami. The insurtech company raised a $60 million Series B from investors including the SoftBank Latin America Fund, in June.
  • Eight Sleep is the Miami-based startup that leverages technology and data to engineer sleep products that restore individuals to their peak energy levels every morning. Eight Sleep’s smart beds have drawn a large celebrity (and #MiamiTech) following. Co-founders Matteo Franceschetti and Alexandra Zatarain, who are married, were very early adopters of the Miami Movement and moved to Miami from New York City in spring of 2020 and bought a home in November. The SB Opportunity Fund participated in two fundings, including an $86 million scaleup round in August.
  • FTX, the cryptocurrency exchange, secured naming rights to the Miami Heat’s arena in a 19-year, $135 million deal earlier this year and announced plans this summer to open a Miami office. In July, FTX announced it raised $900 million at an $18 billion valuation in a funding round that included SoftBank. FTX has been part of a wave of crypto trading platforms and companies that have planted a flag in Miami.
  • Heru is a Miami-based medtech spinout from the University of Miami’s renowned Bascom Palmer Eye Institute. Led by  founder and CEO Dr. Mohamed Abou Shousha, Heru is building a next-generation cloud-based AI-powered platform for eye diagnostic and vision correction.  SB Opportunity Fund participated in the $30 million Series A announced in May that also included a number of Miami-based funds and angels. Heru wasted no time: In June, the startup took its first diagnostic product to market.
  • Kushki enables local and cross-border payments across Latin America. A year ago, co-founder and CEO Aron Schwarzkopf moved to Miami. “We’ve opened an office here and are hiring a team. We’ve been able to attract very good talent at the executive level – people who understand the multicultural, multinational challenges of Latin America. For us, it has been one of the highlights of setting up shop in Miami,” he told me.  Kushki’s API platform is available in a number of countries in South America and in Mexico; in 2022, Kushki plans to open seven new markets in Central American and the Caribbean. To say Kushki is fast growing is an understatement: The startup’s distributed team has grown from 100 to 500 people in less than a year. SoftBank participated in Kushki’s $86 million Series B round announced in June.
  • Lula, a Miami-based startup on a mission to modernize insurance, was co-founded by Miami-raised twin brothers Matthew and Michael Vega-Sanz. Lula provides everything required to build and maintain a viable insurance program for companies of all sizes to conduct driver risk assessments, manage episodic insurance policies, claims handling and more. This includes car rental companies, trucking and logistic companies, car sharing platforms, rentals for military personnel, and other organizations where insurance needs don’t fit the traditional model. The SB Opportunity Fund participated in Lula’s  $18 million Series A round announced in July.  Since then, Lula has onboarded thousands of clients on their waiting list.
  • Lumu, launched and growing in Miami, helps companies identify and measure the risk of cyber compromise in real-time. Founded by cybersecurity serial entrepreneur Ricardo Villadiego, the cybersecurity startup was one of the first two companies funded by the Miami Initiative along with QuickNode. Lumu  closed its $7.5 million Series A round, co-led by the SB Opportunity Fund, in March.
  • Ontop helps enterprises streamline their international hiring and payment processes by managing contracts, documents, taxes, regulatory compliance and payments with an easy, automated platform. SB Opportunity Fund participated in the Miami-based startup’s $20 million Series A round announced in October. All three Ontop co-founders moved with their families from Bogota to Miami and have offices at WeWork Brickell City Centre that members of its large distributed team can use during visits.
  • Picsart, a photo and video editing application platform with more than 800 employees and based in San Francisco, was valued at over $1 billion after SoftBank Vision Fund 2 led a $130 million funding round in August. Picsart plans to expand to Miami and hire a team in the Magic City, SoftBank said. 
  • QuickNode, the homegrown Miami-based startup led by four co-founders, enables developers to more easily develop and scale blockchain apps. QuickNode is one of a growing number of startups in South Florida innovating in the crypto/blockchain space. SB Opportunity Fund participated in QuickNode’s $5.3 million seed round led by Alexis Ohanian’s Seven Seven Six Fund.

QuickNode’s co-founders are Dmitry Shklovsky (co-CEO), Manuel Kreutz (co-CTO),  Auston Bunsen (co-CTO), Alex Nabutovsky (co-CEO).

To mark this SoftBank milestone, I took the opportunity to ask Nyatta a few broader questions about Miami and SoftBank’s role to play. (Answers edited slightly for brevity).

Why Miami?

There are tactical reasons for SoftBank to be here, but also strategic ones. “What we like to do at SoftBank Group International is to find the pockets that are underexplored and underexploited,” Nyatta explained. “Latin America was one such pocket, a region that was undercapitalized, and we saw an opportunity, went in with a big flag, and now 2 1/2 years later it seems that we were right. The only thing missing was capital – the talent was there, the opportunities were there,” said Nyatta.

Similarly, SoftBank launched the early-stage Opportunity Fund in 2020 because founders of color “were  not paid attention to in the right way, and we saw that as a missed opportunity,” Nyatta said.

Miami, he said, “has never been at the core of tech but has this deep entrepreneurial culture, a great dynamic and welcoming progressive leadership – the thesis is all it needs is capital and focused attention.”

How’s Miami progressing and what is the potential?

Nyatta has been traveling here since 2019 and “it’s a different world” today — more founders, investors and activity — than 2019, he said.

“You used to  see the same people at all the events. It’s nice to be small, it is also cute to be small, Miami doesn’t need to be cute anymore, it needs to be significant.”

Miami is a startup, he said. “It’s not a seed stage company, it’s a growth stage company but it behaves and looks like a startup. I compare it to other city-state startups. – Hong Kong, Dubai, Singapore, New York City – they were all startups and Miami is in that  tradition. I think it is finding itself now for the 21st century and leaning into the opportunity to become one of the world’s great megapolises. I think the next 50 years could be completely transformative for Miami.”

“If you look at Dubai in 1990 and Dubai today, it is dramatically different, I can’t overstate that. Miami in the next two or three decades really has a shot to  become one of the greatest cities in the world because it combines diversity, energy, a progressive leadership and government structure, a good tax structure. It combines airport and port access. It is very uniquely positioned to be one of those cities. So when you say Hong Kong, Dubai, Singapore, Miami should be on that list.”

“Miami is itself as a startup that could be coming into its own over the next few decades.”

Do you see any sectors rising up in this region or that could rise up?

“I think it is too early to say but there  are some obvious green shoots,” he said.

Crypto: “If there is going to be a headquarters of crypto, it is up for grabs, and Miami is already in a very interesting position. There’s the FTX Arena, Mayor Suarez is very pro crypto, there are a bunch of crypto founders here. It is the kind of place that crypto seems to thrive in – it’s a little rebellious, a little fun, a little anarchist, all those things, plus there’s some layer of capital. If I were to make a bet, I’d say crypto is going to be a really big part of Miami s renaissance.”

Healthcare: “Healthcare is also going to be a part of Miami’s renaissance. There is an aging population in Miami and that is an immense opportunity to experiment and build things that help us as we all get older. There are world class institutions here already that are innovating in healthcare … so I think healthcare is a really interesting theme Miami can lean into.”

Climate tech: “Inevitably Miami needs to become a place where people think carefully about climate chance and sustainability because it is on the frontlines. I would imagine Miami would be a natural place – driven by self interest first – where people think about solutions to climate change, mitigating global warming, protecting cities as water levels rise, all those types of things.”

So what does Miami need to do to capitalize on the opportunity in tech?

There’s a much bigger story here than people moving to Miami because of Covid and the Latin America connection, Nyatta said.

“Nation-states are becoming less relevant. Cities have always been important drivers as change. Miami now has a shot of putting itself on the list of  the global cities. Berlin, Paris, Dubai, Miami  is the discussion that is happening now and that is a very different thing than what’s happened in the past,” he said.

“Momentum is wonderful, buzz is wonderful, hype is wonderful, they are very hard things to create – but they must be sustained now. And the way you sustain that is investing in things that last —  that outlast political cycles, that outlast economic cycles, Miami has to build for the future. That is what Dubai did brilliantly, that is what Singapore has always done. So to be relevant in 40 or 50 years, Miami has to construct the infrastructure – physical, and social and policy infrastructure – that creates this context  for a global mega city. That  takes some time – but it is bigger than just the Twitter hype. That is the challenge for the city of Miami and the leadership – I think  they are aware of that  and it is their opportunity to lose – but Miami has to invest. You have to take those seeds and put them in the ground.”

Follow @ndahlberg on Twitter and email her at [email protected]

READ MORE RECENT SOFTBANK NEWS ON REFRESH:

See the latest #MiamiTech capital raises and exits in one place here

Follow me