Business

MercadoLibre will invest BRL 4 billion in Brazil

A pioneer of marketplaces, the Argentine unicorn has been struggling within the group, which has seen another business, Mercado Pago, taking off

LABS

12.Feb.2020 15:06 BRT
UPDATED 09.Feb.2021 11:04 BRT

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In 2019, according to a balance sheet released last Monday, the group, which operates in 18 countries, recorded a total loss of $172 million;
In contrast, the total volume of payments with Mercado Pago in the last quarter of last year reached $8.7 billion.

According to the Valor Econômico newspaper, the e-commerce conglomerate MercadoLibre raised investments in the country by one third, to BRL 4 billion this year. The company’s idea is to defend the leadership position, achieved in 2017, over B2W, the company in charge of the online sales of Lojas Americanas and Submarino.com.

A pioneer of marketplaces, created in 1999, the Argentine unicorn MercadoLibre has been struggling within the group, which has seen another business, Mercado Pago, the financial services fintech of MercadoLibre, taking off. In 2019, according to a balance sheet released last Monday, the group, which operates in 18 countries, recorded a total loss of $172 million.

In contrast, the total volume of payments with Mercado Pago in the last quarter of last year reached $8.7 billion, an increase of 63.5% in relation to the same period of the previous year. Total payment transactions increased 127.2% over the previous year, totaling 285.5 million transactions in the quarter.

“Our MPOS business continues to be one of the fastest growing non-marketplace business units. On a consolidated basis, MPOS TPV grew 126.1% on an FX neutral basis,”said the company in a statement. The mobile wallet was also one of the highlights of the balance sheet, surpassing, for the first time, the mark of $1.3 billion in consolidated transactions. “Our mobile wallet consumer base grew by 29.4% compared to the third quarter, reaching 7.9 million active payers during the quarter. TPV from mobile wallet in Argentina, Brazil and Mexico continues to grow by triple digits year-over-year. “

In early 2019, MercadoLibre received an investment of $2 billion from new investors, including PayPal. In December, MercadoLibre reported $1.4 billion in cash. These resources are supporting the company’s investments.

Also at the end of last year, Mercado Livre and PayPal announced a partnership to grow in Latin America. In a post on LinkedIN, MercadoLibre’s COO, Stelleo Tolda, explained that with a new agreement, Mercado Pago will be offered as a payment method by merchants using PayPal worldwide, allowing fintech’s 48 million users in Brazil and Mexico pay for online purchases using the method you already know. In return, Paypal will also be accepted in the Mercado Livre marketplace for international purchases.

In addition, Xoom, PayPal’s international transfer service, will allow Mercado Pago users in Brazil and Mexico to receive remittances directly into their digital wallet.