SoftBank Axes 18% of Vision Fund Staff in Latin America

Junior investors and staff from the operations team are being affected by the Japanese conglomerate’s cost-cutting policy in Latin America

Masayoshi Son, chairman and CEO of SoftBank Group Corp., had announced layoffs at its last results meeting, after a record loss of $23 billion.
September 29, 2022 | 09:45 AM

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Bloomberg Línea — SoftBank has laid off 10 people from its Latin America team, around 18% of the total, a source familiar with the matter but who preferred not to be identified because the discussions are private, told Bloomberg Línea.

Globally there were about 150 people affected at Vision Fund, a little below 30% of the total team, according to the source, following what the Japanese conglomerate’s founder, Masayoshi Son, had already announced at its last results meeting, after a record loss of $23 billion.

Softbank has not responded to Bloomberg Línea’s requests for comment.

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According to the source, the situation for the investment bank in the region is different from the down cycle SoftBank has been suffering in the other markets where it operates.

SoftBank’s Latin America operation was launched in 2019 and this year its investment vehicles in the region (LatAm Fund I and II) began to be managed under the Vision Fund umbrella.

“As it’s a recent fund, with an upward bias and it’s having great returns, the minimum possible was done to continue but without affecting the operation,” the source said, stating that the more junior team on the investment and operations side was impacted by the cuts. SoftBank’s leadership for Latin America, however, continues.

In an interview with Bloomberg Línea, Humberto Zesati, managing partner of Mexican private equity firm LIV Capital, said SoftBank was the great catalyst for positioning Latin America in the focus of large international funds.

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“Before SoftBank, the venture capital industry would take time to take off in Latin America in terms of funding, but that has changed in the last five years,” he said.

Today, SoftBank has just over 80 companies in its portfolio in Latin America, such as unicorns Rappi, Creditas, Kavak, Vtex, Olist, and MadeiraMadeira, and is expected to announce new investments soon, as Rodrigo Costa, a partner at SoftBank Investment Advisers, said during an event hosted by Demarest Advogados last week.

“We continue to look for opportunities,” he said. “The cost of capital has changed very quickly and investor vs. company price expectations are still quite divergent.”

Since the launch of the LatAm Fund in 2019, SoftBank has managed about $8 billion in the two funds, of which $7.68 billion has already been allocated. SoftBank’s Latin America fund I had $5 billion to invest. When the company announced the US$3 billion fund II in September last year, the former was already practically invested.

According to SoftBank, the region still has at its disposal a pool of $2 billion in reserve that has not yet been invested. Counting the almost $400 million left over from the LatAm funds, SoftBank still has approximately $2.4 billion to invest in the region.

SoftBank says the Vision Funds do not invest in Latin America through the LatAm funds. They are different administrations, with different logics and partners. But there are companies in the region that have received investments from SoftBank both through LatAm Funds and Vision Funds, as was the case with Creditas.