PayPal pumps $750m into e-commerce firm MercadoLibre
PayPal has committed to make a $750 million investment through the purchase of common stock in Argentine e-commerce company MercadoLibre.
MercadoLibre plans to strengthen its logistics infrastructure
The deal is part of MercadoLibre’s intention to offer approximately $1 billion of common stock. MercadoLibre also intends to grant the underwriters a 30-day option to purchase up to $150 million of additional shares 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. The PayPal and Dragoneer 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. In total, MercadoLibre wants to raise $1.85 billion in equity offerings.
There are no specifics, but MercadoLibre intends to use the proceeds for its e-commerce platform, strengthen its logistics infrastructure, and to invest in solutions.
Dan Schulman, president and CEO, PayPal, comments: “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.”
According to MercadoLibre, during 2018 it 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, totalling 389 million transactions and $18 billion of total payment volume (TPV).
Founded in 1999, MercadoLibre has six integrated e-commerce platforms including MercadoLibre, MercadoPago and MercadoEnvíos.
Last week, Mexico’s central bank was in discussions to bring in a new government-backed mobile payment system offering online purchases via QR codes.
Amazon and MercadoLibre have approached the bank about adopting this system.
