Grupo Bursátil Mexicano (GBM) is a 35-year-old investment platform in the Mexican stock market. In its first three decades of life, GBM was focused on providing investment services to high net worth individuals and local and global institutions.
Over the past decade, the Mexico City-based brokerage has ramped up its digital efforts, and, in the past five years, has evolved its business model to offer services to all Mexicans with the same products and services it offers large estates.
Today, GBM is announcing it has received an investment of “up to” $150 million from SoftBank via the Japanese conglomerate’s Latin America Fund at a valuation of “over $1 billion.” The investment is being made through one of GBM’s subsidiaries and is not contingent on anything, according to the company.
Co-CEO Pedro de Garay Montero told TechCrunch that GBM has built an app, GBM+, that organizes and invests clients’ money through three different tools: Wealth Management, Trading and Smart Cash.
Last year was a “historic” one for the company, he said, and GBM went from having 38,000 investment accounts in January 2020 to more than 650,000 by year’s end. In the first quarter of 2021, that number had grown to over 1 million -- representing more than 30x growth from the beginning of 2020.
For some context, according to the National Banking and Securities Commission (CNBV), there were only 298,000 brokerage accounts in Mexico at the end of 2019, and that number climbed to 940,000 by the end of 2020 -- with GBM holding a large share of them.
Most of GBM’s clients are retail clients, but the company also caters to “most of the largest investment managers worldwide,” as well as global companies such as Netflix, Google and BlackRock. Specifically, it services 40% of the largest public corporations in Mexico and a large base of ultra high net worth individuals.
The company is planning to use its new capital in part to invest “heavily” in customer acquisition.
Montero said that half of its team of 450 are tech professionals, and that the company plans to also continue hiring as it focuses on growth in its B2C and B2B offerings and expanding into new verticals.
“We are improving our already robust financial education offering,” he added, “so that Mexicans can take control of their finances. GBM’s mission is to transform Mexico into a country of investors.”
Because Mexico is such a huge market -- with a population of over 120 million and a GDP of more than $1 trillion -- GBM is laser-focused on growing its presence in the country.
“The financial services industry is dominated by big banks and is inefficient, expensive and provides a poor client experience. This has resulted in less than 1% of individuals having an investment account," Montero told TechCrunch. “We will be targeting clients through our own platform and internal advisors, as well as growing our base of external advisors to reach as many people as possible with the best investment products and user experience.”
When it comes to institutional clients, he believes there is “enormous potential” in serving both the large corporations and the SMEs “who have received limited services from banks.”
Juan Franck, Investment lead and head of Mexico for SoftBank Latin America Fund, believes the retail investment space in Mexico is at an inflection point.
“The investing culture in Mexico has historically been low compared to the rest of the world, even when specifically compared to other countries in Latin America, like Brazil,” he added. “However, the landscape is quickly changing as, through technology, Mexicans are being provided more education around investing and more investment alternatives.”
In the midst of this shift, SoftBank was impressed by GBM's “clear vision and playbook,” Franck said.
So, despite being a decades-old company, SoftBank sees big potential in the strength of the digital platform that GBM has built out.
“GBM is the leading broker in Mexico in terms of trading activity and broker accounts,” he said. “The company combines decades of industry know-how with an entrepreneurial drive to revolutionize the wealth management space in the country.”