Let’s play a game. Think about a company in the e-commerce space that generates a few billion dollars revenue per year, of which a substantial amount comes from Fintech products. Shopify? Not wrong, but there is also Latin American e-commerce giant MercadoLibre. The company was founded in 1999 in Argentina, but its headquarters are now in Uruguay. MercadoLibre is active in 18 countries in Latin America and is the most popular e-commerce provider in most of these countries. Their main business is an e-commerce marketplace, but the company also offers advertising, real estate, and other services.
The majority of MercadoLibre’s fintech revenue comes from its Mercado Pago unit, which offers payment and insurance products. Additionally, the company also offers a lending product. While the lending unit, Mercado Crédito, generates lesser revenues than Mercado Pago, it grew last year by an impressive 151%.
MercadoLibre and Shopify are both e-commerce companies, but obviously with different main products: MercadoLibre operates a marketplace and Shopify an infrastructure product. Nevertheless, there are quite a few similarities between the two giants. Both companies started their Embedded Finance journey with payments which became very successful outside of their own platforms. Furthermore, both companies expanded their fintech offerings into lending and banking. Lastly, both companies are not looking at revenue alone for their financial products but they see Embedded Finance as a way to bind customers to their ecosystem and as a base from which to launch additional products.
