Dive Brief:
- Digital payments giant PayPal has invested in a Miami-based special purpose acquisition company MELI Kaszek Pioneer, disclosing in a filing with the Securities and Exchange Commission this month that it bought 2 million shares for a 6.73% stake.
- The SPAC, also known as a blank-check company because it allows future acquisitions, is backed by Latin American e-commerce behemoth MercadoLibre and venture capital firm Kaszek, which raised $287 million in an offering for the SPAC earlier this month, Bloomberg reported. The new entity is targeting some 30 potential fintech or e-commerce acquisitions in Brazil, Mexico, Chile and Argentina, the report said.
- Asked about the disclosure, PayPal spokesperson Taylor Watson said: “PayPal makes investments in promising startups and tech companies from time to time, including our PayPal Ventures investments.” The company’s 13D filing on Oct. 1 included seemingly boiler-plate language that said PayPal could engage in discussions with the entity’s management or board about acquisitions or other corporate transactions.
Dive Insight:
PayPal knows MercadoLibre well. In 2019, it invested in MercadoLibre, which operates a retail platform similar to Amazon’s in Latin America. PayPal also signed a commercial agreement with Buenos Aires-based MercadoLibre that year that allowed cross-selling of their services for purchases and payments in Mexico and Brazil. Last year, they pursued further integrations of their operations, according to a report from PYMNTS.com.
MercadoLibre’s ability to take payments through its expanding MercadoPago checkout services operation even spurred comparisons to the early days of PayPal at the time.
As part of their partnership, PayPal and MercadoLibre also revealed plans to work together on providing remittances services for cross-border money transfer services.
“This is just the beginning of the great things we can do together,” PayPal CEO Dan Schulman said at the time. “By working closely, we can jointly leverage our scale and platform capabilities to help drive inclusion and access to the global digital economy.”
A spokesperson for PayPal declined to provide any additional comment on PayPal’s reasons for investing in the new SPAC, other than to note that “we are familiar with the principals and advisors of this SPAC via our relationship with MercadoLibre.”
