Softbank and the World
Bank this week joined in an $500 million initiative with no lesser goal than to bring the
developing world online.
The World Bank’s International Finance Corp. (IFC) and Softbank will
incubate Net companies in 100 developing countries, using the newly formed
Softbank Emerging Markets (SBEM)
as the vehicle for investment. IFC and Softbank will invest $200 million in
the new company and divide control through a 25 percent and 75 percent
respective holding, and IFC will join Softbank’s Latin America and China
Internet funds.
SBEM will offer financing and support services to the VC recipients, and
will network the companies to local and global partners. The fund will
target companies which locally adopt previously-established business models,
similar to Softbank’s import strategy in Europe and Asia, and will front
risk capital for original concepts.
The new fund will be based in California, and intends to establish a Global
Incubation Center to support technologies and concepts from developing world
and bring the models to market. SBEM will seek out joint venture partners
among established Net names to bring local rollout in developing countries.
The joint ventures are seen as a means of positioning local partners to
build, launch and operate the local replicas.
The first incubated companies will be introduced in May, according to SBEM.
The project also aims to lift Internet penetration levels by wooing
investors to the emerging regions, which SBEM expects to set off a domino
effect that brings down access costs and increases the number of
subscribers. The fund will also work towards free and subsidized access for
schools, with the intention of promoting widespread education about the
Internet.
“The digital divide is one of the greatest impediments to development, and
it is growing exponentially,” said World Bank President James D. Wolfensohn.
“With this initiative by IFC and SOFTBANK, we are taking a lead in the
effort to close the gap. This investment will accelerate the inclusion of
the developing countries in the information revolution.
“It will transfer technology from the rich countries to the developing
world, fostering sustainable new local businesses which will promote
prosperity and reduce poverty. And it will, I hope, encourage others to
follow with their own investments and initiatives to establish technology
and information centers all around the world.”
Softbank currently holds stakes in 300 Internet companies throughout the
world.
