Bicycle Capital is targeting a $500 million fund.
(Bloomberg) — Marcelo Claure, the former chief operating officer of SoftBank Group Corp., has a new gig: executive chairman and managing partner of his own venture firm, Bicycle Capital. The firm is targeting $500 million for its inaugural fund, and has amassed $440 million in commitments so far.
While a far cry from SoftBank’s $100 billion Vision Fund, the new firm provides Claure with a chance to work with startups in his home turf of Latin America, where Bicycle will focus.
“Latin America is a great place to do business if you understand it,” Claure said in an interview on Bloomberg Television Wednesday. “Anything that’s being disrupted in Latin America, we want to have a role.”
Claure is starting the firm alongside Mwashuma “Shu” Nyatta, formerly a SoftBank Group International managing partner. Nyatta told Bloomberg TV that the new fund will focus on Series B and later rounds, writing checks of about $20 million – $50 million, and will invest in about 10 to 15 companies.
Claure and Nyatta hired three former SoftBank colleagues — Felipe Fujiwara, Ezequiel Piantoni and Matthew Pieterse — to join as partners based out of Sao Paulo and Miami.
Bicycle and the Vision Fund share a high-profile investor in Mubadala Investment Co., the $284 billion sovereign wealth fund based in Abu Dhabi. Mubadala is investing $200 million. The other anchor investor is Claure Group, Marcelo Claure’s family office, which is also investing $200 million.
The new fund’s name drew inspiration from Apple co-founder Steve Jobs’s axiom that a computer is a bicycle for the mind. A bicycle “gets the job done,” Claure said. He and Nyatta are also avid cyclists who often ride together in Miami.
The firm raised $40 million from individual investors, including Brazilian billionaire Andre Esteves and NuBank co-founder David Velez, Claure said. Esteves founded investment bank BTG Pactual, which will help to distribute stakes in Bicycle to accredited investors in Brazil.
One large player is notably absent from the fund: Claure said he didn’t invite his former employer, SoftBank founder Masayoshi Son, to invest in the round. Still, Son played a role in the timing of the announcement of Bicycle, due to Claure’s noncompete clause with SoftBank. The provision that forbids him from starting a Latin American fund expires Wednesday, he said, June 14.
In other parts of the world, he added, it expires “soon.”
Going forward, Nyatta said the fund would look to maintain cordial relations with SoftBank, and that investing alongside SoftBank-backed companies in the future shouldn’t create problems. “Our core is to keep good relations with the entire ecosystem,” Nyatta said.
Latin America is home to a burgeoning middle class and several high-profile startups, including Brazil’s Nubank and Colombia’s delivery service Rappi Inc. Still, while capital is relatively abundant for very young companies, it’s harder to find investors who will write larger checks in Latin American countries.
“I want Bicycle to be the one that helps Latin American entrepreneurs grow their business,” Claure said.
In addition, Bicycle will invest in large global companies that are active in the area. One such company is China’s fast-fashion retailer Shein, in which Claure recently invested and where he serves as Latin American chairman. That investment will stay with Claure Group, he said.
Depending on the Bicycle Capital fund’s performance, it could burnish Claure’s investment credentials, which are tied to SoftBank’s turbulent $17 billion bet on WeWork, where he served as executive chairman.
Claure said WeWork has suffered from forces beyond its control, such as persistent high office vacancies in cities around the world. Claure was chairman from late 2019 until early last year. Reflecting on his tenure, he says he successfully took the company from the brink of insolvency to a market listing two years later. So far in 2023, WeWork’s stock has fallen more than 80% and is now just 22 cents.
Last month, WeWork Chief Executive Officer Sandeep Mathrani said he was stepping down. “It’s sad,” Claure said about Mathrani’s resignation. “It’s a difficult time to be in commercial real estate.”
Earlier in his SoftBank career, Claure ran Sprint, which the Japanese conglomerate bought for $20 billion and then appointed Claure as CEO. After leaving the CEO position of Sprint in 2018, Claure stayed on as chairman of that company, seeing it through a contentious merger with T-Mobile, completed in 2020.
–With assistance from Daniel Cancel.
(Updates with quotes from TV interview starting in the third paragraph.)
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