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Mercado Libre and Kaszek Ventures create a SPAC to acquire a LATAM tech company

The e-commerce giant and the VC firm are betting on a blank-check company to acquire a regional tech company and make it go public.

Don't worry, we speak : Español (Spanish), too!

The e-commerce giant and the VC firm announced that their SPAC (special purpose acquisition company), named Mercado Libre Kaszek Pioneer Corp., has filed to go public.

This SPAC is sponsored by both entities and will have an IPO. With this SPAC, Mercado Libre and Kazek Ventures will seek to acquire a Latin American tech company in a period no longer than 24 months.

It is expected that BofA Securities, Goldman Sachs, Allen & Company, and JPMorgan will act as underwriters for the offering, which will consist of 25 million ordinary shares with an initial price of $10 USD each. The SPAC will be listed on Nasdaq as MEKA.

The purpose of this SPAC will be to acquire, make public, and grow a promising tech company in LATAM. It is likely that such a company will be within Mercado Libre’s e-commerce and fintech ecosystem.

2021, the year of the SPACs

Also known as a blank-check company, a SPAC has the purpose of raising capital in the public markets so it can acquire a company and then make it public.

This is why a SPAC is an alternative to go public instead of a traditional IPO. Among other advantages, a SPAC allows a company to go through this process in a period between two to four months instead of six to eighteen, as it happens with an IPO.

This alternative has existed for decades, but it has recently become quite popular. As of September 1st, 419 SPACs have gone public in 2021 in the U.S. –more than double than in 2020 and 7 times more than in 2019.

Kaszek Ventures keeps propelling the LATAM ecosystem

The VC fund created by Hernan Kazah, one of Mercado Libre’s cofounders, and Nicolas Szekasy, former COO of the company, has been boosting promising LATAM startups for a decade.

Kaszek’s most recent investments include Mexican unicorns Kavak and Bitso, and Brazil’s Nubank and Gympass.

The creation of a SPAC like Mercado Libre Kaszek Pioneer shows the intention of Mercado Libre and Kaszek Ventures to keep funding the region’s tech ecosystem.

The fact that Mercado Libre and members of its founding team have created this SPAC is meaningful, as this e-commerce company has paved the way for other Latin American tech companies.

Mercado Libre was born in the dot-com era, was the first tech firm from Latam to be listed on Nasdaq, and is still leading the e-commerce revolution in LATAM. Its participation in the regional tech ecosystem is key for it to keep maturing.

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