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Marcos Galperin
Leading the rise of Latin America's most successful retailer Mercado Libre
Mercado Libre is the Buenos Aires-based online marketplace that has become the most valuable company in Latin America. It operates in 18 countries, although Brazil alone accounts for 65% of its revenue, growing to 96% when including Argentina and Mexico. It was founded in 1999 by Marcos Galperin and two colleagues while at Stanford.
Galperin came from a leading Argentine family, owners of the Sadesa leather company, had attended the best schools and played for Argentina’s junior national rugby team.
Studying for an MBA at Stanford, he met Hernan Kazah and Stelleo Tolda, who collectively struck on the idea while reading a case study of eBay.
Weeks later, the class was addressed by John Muse, a private equity manager. Volunteering to give Muse a lift back to the airport, the three students seized their opportunity to pitch their idea, and quickly secured their first investor.
Mercado Libre was born.
Two years later, eBay itself, acquired 20% of the business. The market proved difficult for a technology start-up, with limited internet access, a poor logistics infrastructure, and different regulation in each market.
The business is often compared to China’s Alibaba having started with an auction model of eBay, but evolved into a marketplace more like Amazon. Ecommerce penetration in Latin America doubled from around 5 to 10% during the pandemic, but is still far behind markets like USA and China, which are closer to 30%.
In an interview with Endeavor Latam, Galperin said that the early days were not easy at all: for the first eight years, Mercado Libre was not profitable. Only in 2007 did it make a profit.
“It has happened to me very badly. There were times, especially in the beginning, when I remember that I did not want to get out of bed. The alarm clock rang in the morning and said: No, I do not want to get out of bed because I have to face all my employees and … the company is going to melt, it is not going to work, we do not have money to pay salaries, all these people who left their jobs or who believed in me and my idea. This is not going now to work”.
Galperín, now 49 years old, says that “the pandemic has moved us forward maybe five years in the last 12 months”, and that his company should sustain rapid growth for at least another decade, given that the digital transformation of retail is still at an early stage in Latin America.
Sales grew by 92% to $14.5 billion in 2020, while on stock markets, the market cap soared by 194% to $84 billion at the end of last year.
The finance arm, MercadoPago, now accounts for over 30% of the business, and could see much more significant growth beyond its own platform – from insurance and asset management, to loans for the unbanked, and payments embedded into other services. Galperin sees technology as his biggest priority, seeking to double his team of 4000 web developers over the next year.
Galperin says that early in the morning is when he thinks best about ideas. “When I think best and when most things occur to me, it’s like five in the morning when I’m there half asleep, half awake, to the point that I always put a notepad next to my bed on my nightstand. You see that that’s when my brain comes up with the best ideas or solutions to problems. Also, many times when I am exercising. I free myself and think better”.
