Report: Mercado Libre Plans Mexico Expansion of Working Capital Funding With $250 Million in Financing

Mercado Libre has reportedly secured $250 million in financing from JPMorgan to grow the business of its FinTech arm Mercado Pago in Mexico.

The company will use the new resources to finance more businesses and individuals in the country, Reuters reported Thursday (Sept. 19), with a focus on Mexican small and medium-sized businesses (SMBs)

Mercado Libre did not immediately reply to PYMNTS’ request for comment.

Mexico is one of the Latin American countries in which Mercado Pago has seen rapid growth, according to the Reuters report.

The company doubled the number of its mobile credit card readers in the country over the past year, expanded its loan portfolio in Mexico to $1.5 billion as of the end of the second quarter, and is now seeking a banking license that will allow it to offer savings and checking accounts, commercial loans and mortgages in the country, per the report.

Gaining a banking license in Mexico will allow Mercado Pago to “compete head-on and become the largest digital bank in the region,” Osvaldo Giménez, President-Fintech, Mercado Libre, and CEO of Mercado Pago, told PYMNTS CEO Karen Webster in an interview posted in August.

Mercado Pago has its sights set on expansion across Latin America. While Mexico, Brazil and Argentina remain its largest markets, the company is making inroads in Chile and has plans for Colombia, Peru and Uruguay.

“The way we realize it works is basically pick one of these countries and launch the full suite of products there,” Giménez said. “And that typically takes a couple of years.”

Mexico and Brazil emerged as key drivers of Mercado Libre’s success in the first quarter, with each of those countries registered a 30% year-over-year increase in gross merchandise volume (GMV). This growth was attributed to a substantial rise in the number of items sold, 32% in Brazil and 28% in Mexico.

Mexico accounted for over 20% of the company’s total revenue in 2023, up from 12% in 2019.

It was reported in March that Mercado Libre is set to invest $2.5 billion in Mexico this year, up from the $1.6 billion spend in 2023.

This investment will be distributed across various business areas, including warehouse expansion, logistics network enhancement, loan increases, salary payments, and marketing and technology investments.