Argentinean e-commerce technology giant, MercadoLibre has entered into an agreement of which payment giant PayPal has committed to make a $750 million strategic investment through the purchase of common stock.
In a separate agreement, an affiliate of Dragoneer investment group has agreed to purchase $100 million of Series A perpetual convertible preferred stock.
Overall, MercadoLibre intends to offer approximately $1 billion of common stock. The firm also plan to grant the underwriters a 30-day option to purchase up to $150 million of additional shares of common stock.
PayPal and Dragoneer’s investments are contingent upon the closing of the public offering and are expected to close at the same time or shortly after the public offering.
CEO and co-founder of MercadoLibre Marcos Galperin, spoke his excitement regarding the investments and that this will enable the company to “significantly accelerate our growth”.
He said: “Over the past 20 years, we have heavily invested in developing the preeminent e-commerce and FinTech ecosystem in Latin America.”
“We look forward to accelerating our leadership in ecommerce and payments and foster financial inclusion in Latin America as a result of our alliance with a global leader in the industry such as PayPal.”
The company said that intends to use the proceeds to continue expanding its e-commerce platform, to strengthen its logistics infrastructure and to invest in solutions that further solidify the company’s position as a provider of end-to-end financial technology and payments solutions.
“Digital commerce in Latin America is experiencing tremendous growth and MercadoLibre is well-positioned for continued leadership,” commented Dan Schulman, President and CEO, PayPal.
“We’ve been impressed with the digital commerce and payments ecosystem Marcos and his team have built. 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.”
Founded in 1999, MercadoLibre has developed into a powerful firm in Latin America e-commerce. is among the top 50 most visited websites in the world in terms of page views, and it is the ecommerce platform with the most unique visitors in each country where it operates.
During 2018, MercadoLibre sold more than 334 million items, amounting to over $12 billion of gross merchandise volume (GMV).
Payment transactions on MercadoPago, its payments business unit, increased by 70% during 2018 – totaling 389 million transactions and $18 billion of total payment volume (TPV).
“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.
The investments follows news that MercadoLibre are challenging Amazon to support a new government-backed, QR code-based, mobile payments service set to launch in Mexico.