Investment Update: MercadoLibre funding, Ricoh Brazil M&A, and other developments

MercadoLibre made a significant investment in fintech, seeing a US$770mn net injection into their credit services within the first quarter of the year. They reported a 75% increase in their credit portfolio compared to the previous year, with delinquency rates remaining stable. Fintech services also experienced a 30% growth, now serving 64 million users. Their quarterly capex, mainly allocated to warehouse logistics and expansion, surged to US$256mn from US$148mn in the first quarter of 2024.

Mexico outpaced Brazil in fundraising activities during April, with standout transactions led by startup Kavak totaling US$527mn, positioning Mexico at the forefront of regional investments. Across Latin America, startup investments soared to US$1.1bn, nearly doubling from the previous month. Notable deals included a US$48mn series A extension for Chile’s Toku and a US$40mn series B for Brazil’s OnFly.

Ricoh, a prominent Japanese technology company, acquired Go2neXt, a Brazilian IT services provider, solidifying its presence in Latin America. While the deal value remains undisclosed, Ricoh is well-known for its office equipment and has expanded its offerings to include digital solutions and services. With a global reach spanning 200 countries and territories, Ricoh reported sales of 2.35tn yen (US$15.5bn) in the previous fiscal year.

In Brazil, private equity deals saw a 41.3% growth in the first quarter of the year, totaling 6.5bn reais (US$1.15bn), reflecting a gradual recovery amidst economic volatility and rising interest rates. Venture capital funding, however, dipped to 1.4bn reais in Q1 from higher figures in previous quarters. According to Abvcap president Priscilla Rodrigues, the VC industry is refocusing on proven business models.

Allugg, a Brazilian startup specializing in tech equipment rentals, raised 30mn reais through credit rights investment fund FIDC to expand its hardware-as-a-service operations across Brazil. With a client base of approximately 200 companies, predominantly startups, Allugg aims to scale its services to larger enterprises. Meanwhile, Prosus Ventures, the VC arm of Dutch conglomerate Prosus, led a US$7.25mn investment in Latin American startup Zapia AI, extending the startup’s seed funding to over US$12.3mn. Zapia AI is known for its WhatsApp-based AI assistant platform with over 3.5mn users, heralding plans to introduce an AI agent for real-world task automation via WhatsApp.