Mercado Libre Corporation is an Uruguayan e-commerce multinational incorporated in the US and headquartered in Montevideo, Uruguay. Conceived in the late 1990s by Argentine billionaire Marcos Galperín, the company has become a giant in the making while generating profits since going public on the NASDAQ in 2007. Originally a pet project for Marcos Galperín while studying for his MBA at Stanford University along with partnering with a fellow Argentine classmate of his at the competitive school in Palo Alto, California, the company has grown tremendously through strategic planning, innovation, logistics and acquisitions after reaching Spain and all of Latin America except for El Salvador, Nicaragua, Cuba and Paraguay. Likewise, integrating various products after doing online auctions only at the beginning, working in a manner akin to eBay Corporation, the company was founded in 1999 by Marcos Galperín and Hernán Kazah with seed backing from John Muse through his private equity outfit known as HM Capital Partners LLC. Shortly thereafter, the company recruited local Brazilian investment banker and Stanford MBA alumnus Stelleo Passos Tolda as a founding partner to manage its soon to be expected back then growing Brazilian operations. The latter is the current CEO of the e-commerce colossus after Marcos Galperín decided to step down just recently while remaining Chairman of the entity. Hernán Kazah, on the other hand, departed amicably from the company in 2011 to launch his incredible venture capital firm now branded as Kaszek Ventures. Similarly, other angel investors who joined the subsequent pre-IPO financing rounds included CCMP Capital L.P., Goldman Sachs Capital Partners LLC, Flatiron Venture Partners LLC, GE Capital Corporation and the Santander Group. eBay was for a time a prominent investor in the company as well before liquidating its position in 2016. The two companies, however, continue to collaborate with each other on important issues of mutual interest.
Moreover, the company comprises six divisions today including the initial one consisting of online auctions where active users can also list items for sale at fixed prices known as Market Place. The other divisions include Mercado Shops, Mercado Publicado, Mercado Clasificados, Mercado Crédito and Mercado Pago. Mercado Shops consists of individual sites inside the ecosystem of the company where merchants can operate independent subsites to sell their goods online. Overall, Mercado Shops contains over 3,000 merchants affiliated with its services online. Mercado Publicado, on the other hand, is the advertising unit of Mercado Libre displaying different ads and getting paid for them as well whenever active users click on them. Likewise, Mercado Clasificados is a digital tool allowing realtors and car dealers to list inventory on the site. Similarly, Mercado Crédito is the lending arm of Mercado libre offering credit lines to active users with borrower profiles and credit scores assessed from inside the company using its own proprietary mechanism. Mercado Pago is the digital payment platform of Mercado Libre letting active users to transfer payments online from transactions done on the site. By the same token, being an innovator and business incubator as well after funding its own venture capital fund, the company has acquired several internet startups throughout Latin America enabling it to enhance its product offering. In fact, Mercado Pago introduced a tool allowing mobile devices to process charges from credit and debit card transactions by reading a QR code. In addition, Mercado Libre transitioned to open-source technology in 2011 enabling application programming interface developers or APIs enhance the overall platform of services within the ecosystem of the company.
To conclude, Mercado Libre is a force in Latin America to be reckoned with now. In fact, growing steadily since its foundation in 1999 while led by an astute and billionaire entrepreneur with vision like Marcos Galperín himself, the listed company has promising prospects to be materialized in the not distant future. Accordingly, with a size exceeding $ 7 billion a year in sales while possessing over $ 1.5 billion in equity, $ 10 billion in assets and reporting a solid albeit not high bottom line today, the company has plenty of untapped resources at its disposal to keep on expanding regionwide. Similarly, the physical presence of this multinational is admirable after reaching many countries while having two dozen distribution centers comprising over three million square meters of warehousing space when combined throughout almost the entire region including Spain. In addition, the company employs a sizable workforce that now counts around 30,000 associates on its payroll of various nationalities across all divisions and has over 140 million active users as well registered with the company throughout the region. As a result, the market takes into account these and many other facts to come up with a staggering market value exceeding $ 40 billion today after being the most valuable commercial enterprise in Latin America while trading by a steep price/earnings multiple because market participants do indeed expect awesome and fruitful results in the future ahead. This a success story already and yet in the making to reward investors accordingly with juicy dividends down the road.