By Peter Frontini
SAO PAULO (Reuters) - Softbank (OTC:SFTBY) expects exits from its investments in Latin American startups to intensify from 2025 as the region's prospects improve, Alex Szapiro, regional head and managing partner at the firm, told Reuters on Tuesday.
The investment giant's exit from Brazilian fintech Pismo, which was bought by Visa (NYSE:V) in a $1-billion deal in June, is likely to be the first of a cycle of divestments in the region, Szapiro said in an interview at Softbank's Sao Paulo offices.
"We are having a lot of interesting conversations, which will eventually become exits in 2025, 2026," he added, underscoring his optimistic economic outlook for Latin America.
"If we look at it in a geopolitical way, there are very good things happening for the region," he said citing nearshoring in Mexico, strengthening currencies, a more stable political environment and a cycle of interest rate cuts led by Chile and Brazil.
"All these macro components will be very positive, I think planets will align to basically make the equity market more aggressive than we imagine today," Szapiro said.
After the Pismo exit, Softbank still holds 91 Latin American startups in its portfolio, with fair value marked at $6 billion. However the pace of new investments has slowed sharply since 2021, as borrowing costs rose and investors became more selective.
Several startups from the region, including some backed by Softbank, laid off employees and restructured operations amid an environment of higher inflation and scarcer capital.
For Szapiro, Brazilian startups are largely past those adjustments, and firms are already looking to accelerate their core businesses again.
For Softbank's upcoming Latin American investments, he said he expects to allocate about 70% of capital in additional funding for firms already in the portfolio, with the rest directed to new companies.