SoftBank Eager to Keep Investing in LatAm, But Startups Are Delaying Fundraising

Rodrigo Costa, a partner at the investment bank, says he hopes to announce new investments soon

Since the LatAm Fund’s founding in 2019, SoftBank has managed about $8 billion in the two funds, of which $7.68 billion has already been allocated.
September 24, 2022 | 10:30 AM

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Bloomberg Línea — Rodrigo Costa, a partner at Japan’s SoftBank Investment Advisers, sees 2022 as slower for new investments, but “it is not like SoftBank has no appetite to invest, but it is difficult to find a fit in this scenario,” since entrepreneurs are not looking to raise capital because of lower valuations.

“This ends up slowing the market,” Cost said during an event organized by law firm Demarest Advogados this week.

SoftBank has done some follow-ons this year, however. “Maybe we can announce some new investments in the coming weeks,” he said.

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For Costa, it is not that SoftBank is no longer making new investments, but that the pace has slowed, along with the entire market.

“We are still looking for opportunities. The cost of capital has switched very fast, investor versus company price expectations are still quite divergent,” he said.

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Under the Vision Fund umbrella, SoftBank has its own Latin American investment vehicle, LatAm Fund I and II, which in recent years has invested in unicorns such as Rappi, Creditas, Kavak, Vtex, Olist and MadeiraMadeira.

Since the LatAm Fund’s founding in 2019, SoftBank has managed about $8 billion in the two funds, of which $7.68 billion has already been allocated.

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According to SoftBank, the region still has a pool of $2 billion in reserve to hand that has not yet been touched.

Counting the almost $400 million remaining from the LatAm funds, SoftBank still has approximately $2.4 billion left to invest in the region.

SoftBank’s Latin America fund I had $5 billion to invest. When the company announced the $3 billion fund II in September last year, the former was already virtually invested.

According to SoftBank, the Vision Funds do not invest in Latin America through the LatAm funds, but are separate administrations, with a different logic, and different partners. But there are companies in the region that have received contributions from SoftBank via LatAm Funds and Vision Funds together, as was the case with Creditas.