you know people often underestimate Latin America I was having lunch with a very prominent Indian businessman and Latin America if you add the GDP of Latin America we happen to be 2x India with one quarter of these people or one-third of the people so Latin America has the size has 600 plus million a big population so it's a lot to be done in Latin America that we just got started a SoftBank and the few success stories that you have today have given birth to a lot of other hopes dreams that are in the process of
being made new Journeys are being made because now Latin America has a lot of features of success right you look at no Bank great example to me the world's best digital Bank Lucan Mercado Libre nothing to end between Amazon or to a an Alibaba Etc you look at glow band which is real software building shop from Argentina that serves clients globally not the sort of thing people associate with Latin America so different kinds of companies get created in the region and the market surprising to most the market is amazing you know when we were investors
in Uber you know we had to keep it a secret that after New York 300 top five cities were Latin American city Latin America the economy is one that will that will take on any new digital disruption and accelerated Pace look at Netflix WhatsApp and all that you mentioned Tick Tock Latina makes a huge market for them it's been unbelievable for us in terms of Latin audience machine yeah you know Latin America is absolutely booming right so it's great to be in a market where you have it's the early stage of Entrepreneurship but with great
Founders but also you have a market that's right for consuming any digital Goods an accelerated pace and before we dive into that time I did just have to ask on the firm itself you know what do you think is the biggest challenge that you're yet to prove out that's an example like when I think of mine is so I can build a farm Beyond myself every LPS that um how do you think about what your biggest challenge is in terms of the firm build ahead I think it's really tied into the region nobody doubts that
you could create a growth Equity Firm in this day and age sure lots of people have done that question is can latim support a multi-fund growth Equity Firm we strongly believe the answer is yes we think it's obviously yes but that's something the rest of the world doesn't quite believe yet and so it'll take time to prove that out and in a sense that makes the task very simple we just have to execute we have high conviction what we're doing we just have to put one foot in front of the other and the proof will
emerge over time and that proof is in the form of big outcomes so you want the next new bank to go public in New York like that'll kind of quiet the critics but it's getting over the regional argument really because we're very tied into the story of Latin America misconception about the region right I mean you are some people and they think oh my God this is the land of drug trafficking High inflation and constant political turmoil and soccer which is great football for you uh is is the opposite you know Latin America is to
me the land of opportunity and I think Latin America is the only place where which is great because there are more opportunities than Capital available everywhere else there's more capital and opportunities available which drives crazy valuations and others so I think we're in a great place we understand Brazil we understand Mexico we understand Colombia which are the three largest markets and I am a huge believer in the macro story of Latin America and I think the next 10 years are going to be the best 10 years of Latin America for two very very simple reasons
one is near Shoring I mean long long are the days where companies will have one supply chain and be only China and if you want to serve the other side of the world Mexico suddenly becomes a place to serve the U.S so near Shoring it's real very important and secondly Commodities are going to be an important part of the whole new energy model or the electrification of the world a few people know that between Bolivia Argentina and Chile that's 60 of the world's lithium means that's Bolivia alone is one third of the world's lithium so
suddenly those the prices of those Commodities are going to be steady for the next 10 years and Latin America is sitting on that I don't know if you know but Brazil become the largest food exporter in the world so all that means is this com these countries are going to be I would call them economically sound I'm not going to say they're going to thrive because a lot of people have said they've been mistakes but I feel very good about the future of the economy of the two most important markets in Latin America which is
Mexico and Brazil it's nice to have Tailwinds and they have Tailwinds everyone needs a Tailwind one thing that I'm always struck by is it's a difference of opinion I get on homogeneity of last time where some people kind of block it together a lot of time as an opportunity is this huge opportunity and look at the uh kind of collective audience we have here of 650 million and it's basically the yeah whatever we want to choose this huge market and then others say no it's incredibly fragmented each country is very individual it's much more European
in its structure where you have to win Mexico Argentina and you can't look at it as a kind of block opportunity which one's right do you think well for sure there's Brazil and everything else yeah in Mexico but even language is different in Brazil so you have what's generally called Spanish-speaking Madam in Brazil which is not Spanish-speaking Brazil it's own Beast Mexico is also a large entity within Spanish-speaking latinum so if you were to disaggregate two countries and pull them out it would be Brazil and Mexico in that order and if you ignore everything else
those are huge markets that's more than half of the population of 650 mentioned and most of the purchasing power and two very well run central banks that have performed incredibly over the last two years the currencies of Brazil and Mexico have been some of the best performing currencies in the world because the central banks hiked early Brazil is already on the face of easing interest rates so these are two really interesting economies with Tailwinds and then you have as a plus some of the other markets some will always be challenging Argentina has perpetually been a
challenging Market it's never gotten currency under control it's very difficult to figure out what the value of your peso is over time Colombia is having a challenge now but we're long-term bullish on Colombia but if you really had to focus It's Brazil and Mexico and in a sense I suppose that would be like Germany and France you know if you want to pick the EU exam I'm sure in Europe there's a similar answer to where here are the two markets that really matter and that's the same is true in Latin America but I will not
do things right it is expected that both the Brazilian and the Mexican economy will be among the top 10 economies of the world so it's not six yeah and then secondly Argentina's grade because in Argentina you have something that you can export which is Services people the amount of Engineers the amount of lower price labor because of inflation on others so I look at in Argentina that's why you have created companies I want to say that's why I think they're great on their own you know globe and all over the world but that was the
beginning and I think that you know if you can if you can if you can play in two of the top 10 world economies and be strong there right I think you can build a great firm around that if we think about you mentioned that the services and the amazing talent if we kind of go up the stash or down inside whatever we want to take it but to the kind of financing we saw the evacuation of kind of foreign capital in the last year with the kind of economic changes that we've seen it's not
a good thing for you or not in a way there's less competition fantastic and also in a way there's less financing available for that time companies and less co-investors how do you analyze the foreign Capital withdrawal it's a balance sheet they're pluses and minuses one of the biggest minuses is you have big pref Stacks all over the place all these companies that raised a lot of capital whose valuations right now should be much lower than the round they did in 2021 who have pref stacks that are underwater and it's very difficult to finance those companies
even at a discount because what are you buying right if you're buying secondary early a shares or common shares then you're under this huge press stack so I think that's a very big negative the positive is there are fewer people competing and prices have become much more rational to me I love it right there's tourists you know tourist capital is done I mean which is great I mean this is left for people who understand the market who understand opportunity who are really going to help entrepreneurs so it's better it's cleaner it's it's people who I
mean there were people who showed up there in late 2021 because they were they were like sheep right sofank was leading the way and they all came behind I think there's gonna be left two great ones you know I have a lot of respect for ga I mean if you look at the returns of GA people often don't know but if you truly study GA the great returns have come from Latin America it's very funny I just got off the cool with Martin escobari uh and he said exactly the same thing as he did in
terms of the tourist Capital so it's going to be GA hopefully it's going to be us right and then the rest you know they don't even know what the capital of some of these countries are so it's great we like it that way and hopefully it will stay like that I want people to be busy thinking about the US thinking about China thinking about Europe and we'll do our thing in Latin America we're going to help entrepreneurs and we're going to go help and build some of the most amazing companies and yeah and they're proven
their capable of building and we like to be collaborative so there are other firm QED has had a presence on the ground for a long time Warburg has a presence on the ground there's a new firm that's spun out of GIC that has a presence on the ground to Massacre sorry not GIC that has a presence on the ground we love to co-invest with these firms I think the a is where the elbows are sharpest seed you get a lot of people coming together growth you get a number of people coming together and so we're
happy to be that Catalyst for other Capital whether it's local or foreign but we want to price it we want to assess the risk and bring other Capital to the region how important do you think it is having feet on the ground being there having offices in the cities extremely extremely there's a lot of adverse selection there's some Founders who might or might not be great who play really well in New York and San Francisco and so if you wait for them to come to you that's all you'll think Latin America yeah we were just
in Brazil and we went to the middle of Brazil to a state called goyas to a town called goyanya I don't know how many investors have been there they said we were the first ones to go visit them at their offices really interesting company those folks are not going to New York to raise capital from 57th Street you have to go and find them and build a relationship I love that and you have to understand what Latin America is all about right you have to have lived in Latin America and we have a good group
of people who live there you have to understand you know how people think in Latin America if you want to be a great investor I mean you gotta in many cases speak their language it's not about just showing up in Silicon Valley about it I I I'm a believer that those days are are long gone I'm naive how do they think differently if I you know I could describe how Europeans think differently to us if you were to compare us to Latin American people how do they think differently we have different issues right or education
is way worse or health systems are broken so anytime you bring technology to help you with health it is incredibly people adopted extremely fast education in many cases is pretty bad so suddenly when you start bringing online learning methods it's really really helpful Transportation was broken this is why Uber exploded the way retailers used to mark up their goods made us so expensive that they were charging interest rates up to 80 percent so when the data Sheen shows up with something that's 70 cheaper guess what it grows beyond what anybody can ever dream of because
you're solving people's needs it's a different approach to something you have to understand what are the problems so you can solve them and I think we have a deep understanding of that and this is why we can partner with these companies and help them grow their businesses and it's very different and that and I think that that's why Founders like us and you will see that in Investments that we're starting to make our Founders who truly appreciate the experience that we can bring to help them and on the other hand you have a lot of
different kinds of sophistication I was just in Scarsdale New York and I tried to buy a bagel and I said sorry cash only in Brazil That's a laughable statement nobody would say cash only you pay instant real-time transfer from your bank account to the Merchant's Bank account using your phone everywhere and Latin America has something like 25 of the world's fintechs 25 a quarter of the world's fintechs are in Latin America Brazil is probably the most sophisticated Financial Market I've ever come across you can securitize any stream of cash flows and sell it to the
market tomorrow and it'll be purchased and distributed and bought by investors so these levels of sophistication are not really understood outside of latam and so you'll come across a company in Brazil that is very Capital intensive but most of it is debt and in Brazil that's not a risk because you can actually raise a lot of debt really easily through a bunch of different Avenues so as long as it's not Equity intensive it's still an interesting Capital efficient company but that's more difficult to explain to somebody who hasn't spot time there
