Claure: Valuations Are Temporary; Great Companies Are Still Being Made

Attending the inaugural event of Bloomberg’s New Economy Gateway Latin America in Panama City, Claure maintains a bullish position for tech in the region

The investor speaks virtually during the Bloomberg New Economy Gateway Latin America event.
May 18, 2022 | 01:08 PM

Bloomberg Línea — Marcelo Claure, the CEO and founder of Claure Capital and former executive of SoftBank International said that even though valuations of tech companies are decreasing, they will be temporary, as great tech companies are continued to be made.

Attending virtually the inaugural event of Bloomberg’s New Economy Gateway Latin America in Panama City, Claure said that he’s a believer in Latin America, as SoftBank LatAm Fund had amazing returns with the companies in the region.

Meanwhile, the moment is tough for tech companies, as the Federal Reserve tightens the interest rate which drove valuations to fall about 60-70%. “You cannot judge investments made in the last years, they remain the best investments we’ve been made”, said Claure.

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The investor believes entrepreneurs from venture-backed companies will now be forced to drive profitability faster. As the capital for these companies is now more scarce, Claure sees the half-full glass. He believes there will also be less need for capital as companies are now seeking profitability.

With Claure Group, his Family Office, Claure says he is focused on investing in companies that are part of three revolutions: Artificial Intelligence, Electric Vehicles, and Blockchain.

“Nothing is going to change, we are living the most exciting years. Every single industry is being digitized and you cannot go against trends that make the world more efficient”, he claimed. Also, Claure advises investors with cash can surf the wave of sell-offs to invest for a lower price. “Now is going to be the time for investors to ride another great wave”, he said, adding that great disruption companies are being made.

“There will be less capital available, but I don’t think we are ever going back [to the pace of] 2018. It will be at least [the same amount of investment that go to] southeast Asia.”

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Mexico on the spotlight for manufacturing in the Western world

Besides, he thinks there will be more capital coming to the region due to the geopolitical situation of the world, rethinking manufacturers and thinking about Latin America as a path for providing manufacturing to the Western world.

“The world can’t rely on one single supply chain, and when you do that you have more capital flowing to the Latin America economy that wasn’t there before”, he said. Mexico can take advantage of that regionalization of manufacturing, according to Claure.

Added to that, Bolivia, Chile, and Argentina can help drive the electric vehicle revolution, according to Claure, as they are part of the lithium triangle countries. “When you look at commodities, with the war in Ukraine the world price of commodity reached an all-time high,” said Claure, citing LatAm would benefit from that.

“Latin America was always behind, and about 10 years behind China. When you have so much damaged infrastructure, forget valuations for a second and think the rise of entrepreneurial community [to fix those infrastructure issues through technology]”.

Turbulence in crypto market doesn’t drive away Claure’s interest

Even though the crypto market has suffered in recent days given the collapse of a stablecoin, Claure says Bitcoin and other cryptos are just one little piece of the Blockchain revolution.

Claure endorses a decentralized world, with no intermediaries where money can flow through peer-to-peer exchanges. “The rule of thumb is, where the smartest people are going into? There is not a single day where the smartest people are not going to crypto. I love the concept behind Blockchain and I think it will dominate. No Congress or government can stop it, they didn’t stop Uber to win, the same thing will happen to crypto and AI-driven companies.”