SoftBank shakeup puts Vision Fund in charge of Latam team

Before leaving SoftBank in January, its Latin America fund chief, Marcelo Claure, was angling for a spinoff of the division. Now the $8 billion fund is losing two more key leaders, and instead of gaining more independence, it’s about to be folded into SoftBank’s much larger Vision Fund.

Latin America fund managing directors Shu Nyatta and Paulo Passoni have decided to leave SoftBank to start their own Latin America-focused late-stage investment firm.

Their exodus follows that of their former leader and the architect of the Latin America strategy, Claure, whose own departure came amid a dispute over compensation.

Since its launch in 2019, the Latin America fund was set up as an organization that operated separately from the rest of the company, Nyatta told PitchBook in December.

SoftBank is moving to fold the Latin America strategy into the Vision Fund operations and will report to Vision Fund CEO Rajeev Misra, according to a person familiar with the matter.
Additionally, SoftBank has revised the division’s compensation structure, removing profit-sharing commitments, Passoni told Bloomberg.

Nyatta and Passoni are launching their new fund amid a general slowdown in VC activity, including in Latin America.

This year, venture-backed companies have raised $3.3 billion in the region, according to PitchBook data. That is behind last year’s pace, with a total of $16.3 billion, but it’s significantly ahead of the $4.5 billion that Latin American startups collected during each of the previous two years.

In the meantime, SoftBank’s Latin America fund has made fewer investments in 2022. This year to date, the fund has backed only nine companies compared to 48 startups during all of 2021, according to PitchBook data.
 

The fund is currently investing out of its second vehicle, which has an initial commitment of $3 billion. SoftBank will invest an additional $2 billion in the region by way of the Latin America funds, the person familiar with the matter said.

Last week, SoftBank announced that it is spinning out its early-stage Latin America investment effort led by Rodrigo Baer and Marco Camhaji into a separate $100 million fund called Upload Ventures.

Despite the slowdown, Latin America is seen as a prime market for digital transformation opportunities in a region with a population of 650 million people. In the December interview, Nyatta spoke of Latin America’s long-term potential, adding, “These are just fundamental trends that will continue to persist for 20 to 30 years, and [they] have proven to be very resilient to economic cycles, to political cycles, to currency cycles.”
 

Related read: Why 2021 was a breakout year for Latin America’s VC ecosystem