MercadoLibre SPAC has 30 Latin America tech firms in its sights

E-commerce giant MercadoLibre Inc’s blank-cheque company with venture capital firm Kaszek is just getting off the ground. Already, the e-commerce giant’s executives are mulling more partnerships in the region. 

MELI Kaszek Pioneer Corp. raised US$287 million in an offering that closed Friday. The special purpose acquisition company has narrowed its potential targets down to a shortlist of 30 after considering 200 firms.

“The vision we have is to turn this into a platform, where we construct these SPACs as a way to build stronger relationships with partner companies and generate alternative access to public markets for great digital companies,” said Pedro Arnt, the co-chief executive officer of the SPAC and MercadoLibre’s chief financial officer. “We hope this is the first of many SPACs.”

The group is looking for a company with a valuation as low as US$1 billion, said co-CEO and Kaszek founder Hernan Kazah. 

The possible acquisitions could range from e-commerce and financial technology firms, to proprietary technology or logistics firms among others, and include companies based in Brazil, Mexico, Chile and Argentina. The ideal target will be a leader in its space.

Globally, there are about about 461 blank-cheque firms looking for a deal, with combined capital of about US$135 billion, according to SPACResearch.com. Of those, there are about a dozen firms looking for targets in Latin America. Even though there have been few deals in the region, Kaszek said the startup market has matured enough that there are several billion-dollar companies that need funding options. 

The SPAC brings back together key members of MercadoLibre’s founding team. Kazah left the company in 2011 to co-found the early-stage venture-capital firm, but its executives remained in touch and often discussed Latin America’s tech ecosystem, Kazah said. 

“It was a natural continuity of those conversations,” he said. “MercadoLibre was trying to see how to continue expanding its reach into the growing tech ecosystem, and we were trying to see how to help companies as they were maturing into public companies.”

The SPAC may consider companies that Kaszek has invested in among its possible targets, but the executives are confident there won’t be any conflicts of interest given a series of checks including an independent board that will review decisions. 

MercadoLibre, which recently acquired logistics operator Kangu, will also continue to pursue its own separate acquisitions, Arnt said.  

The MELI Kaszek Pioneer SPAC is up 11% since trading began earlier this week. The IPO was “multiple times” oversubscribed amid very high demand, according to Kazah.