SoftBank sees value of Latin American assets fall USD 4.1 billion

Photo: Michael Vi / Shutterstock

Japanese conglomerate SoftBank reported on Thursday that the carrying amount of its LatAm Funds fell by JPY 410.3 billion (USD 3 billion) in the fiscal year ending March 2023, due to a 9.1 percent depreciation of the Japanese yen against the U.S. dollar and, more importantly, due to a decrease of USD 4.10 billion “in the fair value of the portfolio companies.”

The report also shows that SoftBank has divested USD 80 million in the region, while investing another USD 330 million in new ventures and follow-on deals. Currently, the company has USD 7.6 billion committed to investments in the region.

Since 2019, SoftBank has invested in more than 80 startups in Latin America and has pledged to pour USD 8 billion into the region’s startups and tech-based companies through its two funds — meaning there is still room for new investments. In addition to its LatAm funds, the group said in 2022 that it could also invest resources from its Vision funds in the region.

Latin American unicorns such as Rappi, Kavak, Loft, Loggi, Unico, and Gympass, among others, are on SoftBank’s list of investees.

In total, the group’s investment unit — which includes not only Latin American funds but also Vision I and Vision II vehicles that have already invested in companies such as Uber and WeWork — recorded losses of USD 39 billion in the fiscal year, 70 percent more than in the previous year, even after slamming on the brakes and slowing the pace of new investments.

During the report’s presentation, a year after pledging to go into “defense” mode and be more disciplined in its investment strategy, SoftBank CFO Yoshimitsu Goto said said the company is ready to go on the offensive again with an eye on artificial intelligence companies — after cashing out almost its entire stake in Chinese e-commerce company Alibaba Group, the company has about USD 33 billion to do so. In this sense, AI-based startups in Latin America are more likely to attract SoftBank’s founder Masayoshi Son’s eyes than others.

#startups

Fabiane Ziolla Menezes

Former editor-in-chief of LABS (Latin America Business Stories), Fabiane has more than 15 years of experience reporting on business, finance, innovation, and cities in Brazil. The latter recently took her back to the classroom and made her a Master in Urban Management from PUCPR. At TBR, she keeps an eye on economic policy, game-changing businesses, and people driving innovation in Latin America.