LatAm Auction Site Nets US$46.5M in Financing

FORT LAUDERDALE, FLA. (05/11/2000) - It used to be that Latin American companies couldn't get the time of day from venture capitalists. But times have changed, thanks to the growth potential of the region's Internet market.

MercadoLibre SA, an online auction site focused on Latin America, announced yesterday it raised US$46.5 million [M] during its second round of financing, which included investments from Goldman Sachs, Banco Santander Central Hispano, Chase Capital Partners and Flatiron Partners.

Founded in July 1999, the startup plans to use the money to expand its customer service operations, add improved shipment and payment features to its site and enhance its computer systems infrastructure, the company said.

Based in Miami, MercadoLibre serves speakers of Spanish and Portuguese in the U.S., Spain and in seven Latin American countries -- México, Venezuela, Colombia, Chile, Uruguay, Argentina and Brazil.

The company is only the latest Internet startup focused on Latin America to get a multimillion dollar cash injection from investors. Lately, VC (venture capital) funding has been flowing freely into the coffers of Internet startups focused on Latin America. Inc., a personal finance portal aimed primarily at Latin America, last month closed its mezzanine round with $30 million in private equity funding. This year, Japan's Softbank Corp. set aside $350 million in venture capital funds for Latin America Internet startups, while Colombian conglomerate Grupo Empresarial Bavaria launched a $100 million VC fund also for Internet startups in the region.

Latin American companies began attracting cash after StarMedia Network Inc. raised about $170 million in private equity between 1997 and mid-1999, before going public in May 1999. Since going public, StarMedia, which operates a variety of Web sites and portals aimed primarily at Latin America, has raised another $310 million.

The promise of an Internet and e-commerce explosion of enormous magnitude is prompting investors to fund Internet companies focused on Latin America.

The number of Internet users in Latin America is expected to hit 66.6 million in 2005, up from 10.6 million in 1999, and business-to-consumer e-commerce is expected to generate $8.3 billion by 2005, up from $194 million in 1999, according to figures from market research company Jupiter Communications Inc., based in New York.

The business-to-business market is expected to be many times larger, with Dataquest Inc. forecasting it will reach $124 billion by 2004, up from $1 billion in 1999. Forrester Research Inc.'s estimate is even more optimistic for the business-to-business sector in Latin America -- $189 billion by 2004, counting México, which Forrester, for the purposes of its studies, considers part of North America.

MercadoLibre can be reached at

Join the newsletter!


Sign up to gain exclusive access to email subscriptions, event invitations, competitions, giveaways, and much more.

Membership is free, and your security and privacy remain protected. View our privacy policy before signing up.

Error: Please check your email address.

More about DataquestFlatiron PartnersForrester ResearchGoldmanJupiterJupiter CommunicationsMercadoLibreSoftbankStarMedia

Show Comments