Jul 31, 2023, 1:07 PM ETInterview, Fireside Chat

Marcelo Claure & Shu Nyatta: LATAM's New $500M Growth Fund; Investing Billions at SoftBank | E1042

Bicycle Fund I is a $500 million growth equity vehicle focused exclusively on the Latin American market.
Investment Focus: The fund targets the "Series B desert" (Series B through D rounds), filling a capital gap where early-stage funds exist but crossover/pre-IPO investors often wait until too late.
Portfolio Size: The team intends to maintain a small portfolio of 12 to 14 companies to ensure deep, personal involvement with each investee.
Capital Structure: Founders Marcelo Claure and Shu are investing their own capital (estimated >$200 million combined from personal family offices) alongside institutional LPs, creating a "partner-to-founder" dynamic rather than a traditional asset-manager relationship.
Investment Philosophy: The firm prioritizes quality over quantity, rejecting the "portfolio play" approach of SoftBank's Latin American fund in favor of a selective strategy designed to minimize losses and ensure consistent doubles/triples.
Deployment Timeline: The team anticipates deploying the initial fund over approximately three years to avoid over-deploying during periods of high excitement and to pace due diligence.

Macro Tailwinds: Marcelo Claure identifies two primary drivers for the next decade: nearshoring to the US (specifically Mexico) and Latin America's dominance in critical energy minerals (60% of global lithium in Bolivia, Argentina, and Chile).
Economic Scale: Brazil and Mexico alone constitute half the region's population (600M+) and purchasing power, with central banks in both nations recently implementing aggressive interest rate hikes that stabilized their currencies.
Regional Nuance: The region is highly fragmented; Claure advises treating Brazil and Mexico as distinct, massive economies rather than a monolithic block, while noting Argentina's comparative advantage in exporting engineering talent and services due to inflation.
Liquidity Outlook: Claure argues that exits will not rely solely on US IPOs, pointing to a deep local capital market in Brazil for mid-cap companies ($500M–$5B) and a robust M&A market (e.g., Visa acquiring Brazilian fintech Pismo) as viable liquidity channels.
Talent Pipeline: The ecosystem is evolving through a "virtuous cycle" where successful companies like Rappi spawn alumni who launch new ventures, alongside an influx of foreign talent attracted by the region's growth.

Complementary Skills: Claure is identified as the "master of momentum" capable of generating capital and attention, while Shu is characterized as a thoughtful, conservative investor who analyzes opportunities with deep rigor.
Team Structure: The firm launched with three key partners from their previous SoftBank venture, leveraging pre-existing "tribal trust" and a shared shorthand to minimize friction.
Conflict Resolution: The partnership relies on a culture of "healthy paranoia" and compromise; Claure notes he has learned to listen to partners' counter-arguments, even when he holds strong initial convictions.
Founder Interaction: The firm views itself as a partner that offers "truth" rather than just capital, with Claure advising founders to trust their own gut instincts while using the VC as a sounding board for difficult decisions.
Work-Life Integration: Claure rejects the concept of work-life balance, viewing work, family, and life as a singular entity where personal relationships (including children) are integrated into business travel and operations.

FTX Investment: Claure cites his $150 million investment in FTX at SoftBank as his "biggest mistake," teaching him never to invest in an industry he does not fully understand or to succumb to Fear Of Missing Out (FOMO).
Nubank Miss: Claure publicly admits that SoftBank missed Nubank in its earliest stages due to stubbornness over valuation, a failure he attributes to a lack of flexibility.
OpenAI Miss: Both partners identify passing on OpenAI around 2017 as a significant error, attributing it to uncertainty regarding the operational intensity required to build a thin-protocol industry.
Speed in Dealmaking: Shu criticizes the venture industry's fetishization of speed, arguing that term sheet deadlines and rushed decisions driven by zero-interest rate dynamics are harmful "cancers" that lead to poor due diligence.

Goal: The long-term ambition is to become the "Sequoia China" of Latin America, establishing a firm where a Bicycle investment signals significant ecosystem relevance.
Industry Correction: Claure anticipates a market correction where "passive beta" capture strategies fail and only investors who can actively alter a company's trajectory will survive the next decade.
LP Evolution: The firm notes a shift toward Direct-to-Founder (DTF) and Direct-to-Fund (DTF) models, where sophisticated LPs bypass intermediaries to invest directly in top-tier founders.
Future Funds: While $500 million is a strategic starting point, Claure envisions scaling the firm significantly if they successfully prove the viability of a multi-fund growth equity model in the region.
Market Misconceptions: Claure challenges the narrative that Latin America is a monolith or a high-risk zone, asserting it is actually a land of opportunity where capital scarcity is the primary constraint on growth.