MercadoLibre raises US$750 million from Paypal, plans to grow in Mexico

Contxto – The Argentine e-commerce giant, MercadoLibre, recently launched a press release announcing the offering of US$1 billion of common stock. On top of that is the company’s 30-day option for initial underwriters to acquire an additional US$150 million of equity. Paypal has already signed up.

Fresh capital

Paypal has already announced its commitment to purchase US$750 million of this equity offering. Likewise, an affiliate of the Dragoneer Investment Group expressed interest in acquiring US$100 million of Series A perpetual convertible preferred stock in the company.

These two deals depend on the completion of the public offering and may close at the same time – or some time after – the public offering.

MercadoLibre aims to use the fresh capital to grow its e-commerce platform, as well as improve and solidify its logistics processes. In the same way, the company intends to consolidate its market position by strengthening its fintech and payment solutions.

Over the past 20 years, we have heavily invested in developing the preeminent e-commerce and Fintech ecosystem in Latin America.

Marcos Galperin, CEO of Mercado Libre.

“We are excited to welcome these investments which will allow us to significantly accelerate our growth. 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,” said the executive.

Goldman Sachs, JP Morgan and Morgan Stanley are collaboratively leading the equity public offering. For this transaction, MercadoLibre is being financially adviced by Goldman Sachs while receiving legal consulting from Clearly Goettlieb.

Viva Mexico!

Now, apart from raising new funds, the company intends to deploy US$300 million to grow its operations in Mexico, according to Fortune Magazine.

Marcos Galperin, MercadoLibre’s CEO, met with Alfonso Romo from the Council for the Promotion of Investment, Employment and Economic Growth in Mexico to discuss potential investment opportunities.

Galperin aims to reduce the financial inclusion gap in the Mexican market by generating growth and supporting families. The company is already allowing Mexican online sellers to earn a total of US$600 million a year.

About Mercadolibre

MercadoLibre is among the 50 websites with the highest amount of page views in the world. I knew they were big, but not that big. Anyways, I understand how they get so much visibility since they offer six different products to consumers. Some of these include MercadoLibre, MercadoPagos and MercadoEnvío.

All of them are integrated and they work together to reach the company’s ultimate goal to enable users to sell, buy, send, pay and promote their goods online.

– VC