Founded in 1999, just four years after Amazon made its debut, MercadoLibre served 267.4 million users as of 2018, according to Statista, and moved 150.1 million shipments in 2017 plus another 105.3 million through the first six months of 2018. Its 2017 revenue of $737.5 million represents an increase of 49.8 percent from the previous year.
Apparel, one of the top categories on the MercadoLibre marketplace, trails only consumer electronics and grew from 9 percent in 2007 to 18 percent in 2017. Similarly, fashion is the top-selling category on all South American e-commerce, according to Statista, and is expected to account for nearly $10 billion in 2019. The release announcing PayPal’s financing plans said an affiliate of San Francisco-based Dragoneer Investment Group will invest $100 million.
The company has also found success in fintech with its MercadoPago payments business unit, which managed 389 million transactions — a 70 percent increase from 2017 — totaling $18 million. It also offers a credit solution, MercardoCredito.
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MercardoLibre said it will use the new capital to fortify its logistics capabilities, further strengthen e-commerce and seek opportunities to grow its status as “a powerful provider of inclusive end-to-end financial technology and payments solutions.”
“The internet is rapidly becoming a driving force that is increasing the pace of modernization in Latin America,” MercadoLibre CFO Pedro Arnt said during a Q2 2018 earnings call. “This modernization presents us with the opportunity to turn a history of underdeveloped infrastructure in the areas of retail and banking from a disadvantage into an advantage, as it allows for innovation to flourish unencumbered by existing legacy players.”
PayPal president and CEO Dan Schulman noted the “tremendous growth” in the region’s digital commerce market. “We’ve been impressed with the digital commerce and payments ecosystem [that’s been] built,” he said. “We see great opportunities to integrate our respective capabilities to create unique and valuable payment experiences for our combined 500 million customers throughout the region and around the world.”
“Through its investments in FinTech, logistics and customer experience, MercadoLibre is solidifying its leading market position in e-commerce and digital payments across Latin America, and we believe we are witnessing a major tipping point in the region,” said Marc Stad, founder and managing partner of Dragoneer Investment Group.
MercadoLibre sold 334 million items last year on its 18 country-specific websites, amounting to $12 billion in gross merchandise volume. It claims to be among the world’s top 50 most visited sites by page views and attracts the most unique visitors in countries where it operates.
E-commerce revenue for all of South America is expected to approach $33 billion this year, Statista said, with average revenue per user standing at $125.91.
Editor’s Note: This story was reported by FN’s sister magazine Sourcing Journal. For more, visit Sourcingjournal.com.