Former SoftBank exec sees big opportunity in LatAm as others pull back

Bicycle Capital, a new growth equity firm co-led by former SoftBank Group COO Marcelo Claure, has raised $440 million for a debut fund focused on Latin America, a region that has seen a significant retreat from other venture firms.

Bicycle I is anchored by Mubadala Investment Company – the $284 billion Abu Dhabi sovereign investor – and Claure’s family office, Claure Group. Other LPs include global tech investors and founders. The target for the debut fund is $500 million.

“Bicycle Capital represents a significant bet on Latin America, in particular Brazil and Mexico,” the firm said in a statement. “These two countries have large, young populations with meaningful purchasing power, and are experiencing attractive geopolitical and macroeconomic tailwinds… The new firm is founded on the conviction that Latin America is home to exceptional founders who are addressing large and attractive markets yet lack the reliable capital needed to achieve durable scale.”

Bicycle Capital is entering the market as many other investors are pulling back. Venture investment in Latin America soared to a record $19.5 billion in 2021, but plummeted 58 percent to $8.3 billion in 2022, according to market researcher Crunchbase.

The pullback continued in Q1. In an April 14 report, Crunchbase wrote: “SoftBank Latin America Ventures, which participated in 34 rounds in 2021 and 2022, has joined just two this year. Tiger Global Management, another formerly busy dealmaker, has done no deals in the region this year. And Kaszek, the Brazilian firm that ranked as the most active 2021 investor, has also dramatically slowed its investment pace.”

Bicycle Capital sees an opportunity to fill the void. “As capital has dried up after the 2021 peak, many start-ups have been left stranded, especially at Series B and beyond,” the firm said. “Bicycle’s strategy is to partner with a select number of these growth-stage companies, at fair prices, and help them scale into resilient, world-class businesses.”

Claure, who served as both CEO of SoftBank Group International and COO of Softbank Group from 2018 to 2022, wrote on LinkedIn in February: “I’ve made an exciting decision to focus the next phase of my life on Latin America, a region I’m deeply passionate about. I will dedicate most of my time and very meaningful portion of my capital to supporting companies and founders in Latin America as they scale their businesses… I’m ready to make a big impact.”

Mubadala is also bullish about the region. “The start-up ecosystem in Latin America is rapidly evolving, and we believe there is significant potential to create value by supporting exceptional companies and founders in scaling their businesses,” said Faris Sohail Al Mazrui, head of ventures and growth at the sovereign investor. “Mubadala has been investing in Brazil for more than a decade, and we look forward to broadening our exposure across the region through this partnership.”

Bicycle Capital is co-led by Claure, the firm’s executive chairman and managing partner, and managing partner Mwashuma “Shu” Nyatta. Nyatta was previously a managing partner at SoftBank, where he was a co-founder of SoftBank’s Latin America funds and its SB Opportunity Fund for under-represented founders in the US.