'A good investor is one who knows when to exit,' says SoftBank's head in Brazil

Despite its name, SoftBank is not a bank. The Japanese group is one of the world's largest investment firms focused on technology. Founded in 1981, the company is characterized by its long-term vision. In the 1980s, it realized that the personal computer would become a massive phenomenon and invested in Microsoft. In the following decade, it did the same with the internet. Now, its focus is artificial intelligence . There's no rush to sell its stake and exit with a profit.

"SoftBank invested $20 million in Alibaba (a Chinese e-commerce platform founded in 1999) before its IPO (initial public offering). Alibaba became China's largest internet company. And that $20 million position became worth $2 billion. A normal investor would say, 'I invested $20 million, now it's worth $2 billion. I'm going to sell.' Masa (Masayoshi Son, founder of SoftBank) said, 'I believe this will continue to create a lot of value. I'll keep going.' That $20 million, at its peak, was worth over $300 billion. A good investor isn't just one who gets it right, they're one who knows when to exit," says Alex Szapiro, head of SoftBank in Brazil and managing partner for Latin America.

In this conversation with Estadão , he explains the group's strategies in Brazil and Latin America.

Many people get confused by this. Among other operations, SoftBank has three venture capital funds (which buy stakes in companies). A $100 billion fund, Vision Fund 1, is already fully allocated. We have a fund of just over $60 billion, Vision Fund 2, and the Latin America fund, which we call Latin America Vision SoftBank VC. It's an $8 billion fund that we allocate in Latin America, largely in Brazil. SoftBank owns telecom companies (the US carriers Sprint and T-Mobile, now merged); Masa is the largest shareholder in Arm, a chip company that competes with Nvidia. More recently, it became one of the largest investors in OpenAI.

And why the name SoftBank? You don't fundraise, you don't have any clients, right?

In fact, except for Vision Fund 1, which has external capital, everything else is generally proprietary. But the story begins with the ability to envision the future. Masa understood that the personal computer, the PC, would become a massive thing. He knocked on Bill Gates's (founder of Microsoft) door and said, "I'm the most capable person to represent you in Japan." And thus, SoftBank was born, which is essentially a company that will sell software.

A software bank.

A software bank.

And how did your interest in investing in Brazil and Latin America arise?

Marcelo Claure (currently vice president of the Shein group) started the Latin America fund. The math was: if Latin America represents roughly 5% of global GDP and I'm setting up a $100 billion fund, I should allocate 5%, or $5 billion, to Latin America. That was our first fund. Then came another, of $3 billion. So, it was partly based on this concept that SoftBank Latin America was formed in 2019. Masa got it right in the personal computer market in the 1980s. Then, he looked at the internet and said, "This is the next big thing." He became an investor in Alibaba, with $20 million, before the IPO (initial public offering). Alibaba became the largest internet company in China. That $20 million position at the IPO ended up being worth $2 billion. A normal investor would say, "I invested $20 million, now it's worth $2 billion." "I'm going to sell," he said. "I believe this will continue to create a lot of value. I'll keep going. That $20 million, at its peak, was worth over $500 billion. A good investor isn't just one who gets it right, they're also one who knows when to exit.

And what is his vision of Latin America?

I think the genesis of this investment was that capital would be crucial for major changes. In our Latin American portfolio, we have invested in over 77 companies.

Can you name a few?

There are several. QuintoAndar, Petlove, Nubank, Banco Inter, Creditas, Kavak, Witex...

With the way the world is shaping up, with the Trump factor, how do you choose companies?

We look at several things. Of course, the quality of the team, the thesis. Today, we invest only in technology and AI. We look at market size. Often, the company's ability to take what it's doing and export the business model to the world. One example is Wellhub (a fitness center platform). It's a great example of a Brazilian company that has become a global company focused on enterprises. It has operations in the US and Europe. We look at profitability and growth. But often, it's much more about the plan. You make a plan for the company; it doesn't necessarily have to be profitable when we're investing, but it does have to prove there's some reason for a potential cash burn. Okay, I'm spending because I'm launching a new market or because there's an area for us to invest. We're investors in Rappi. Rappi invested in a business called Rappi Turbo, a delivery business. You buy groceries at the supermarket and they deliver within 15 minutes. These are small warehouses scattered throughout São Paulo neighborhoods, houses we call dark stores. This is a company that had to invest until it reached profitability.

Looking ahead four or five years, which sectors are most attractive to you?

Our recent thesis is AI, where companies with deep data control can gain a competitive advantage.