Uruguay’s first Unicorn fintech payments company Q&A

Ahead of its expected IPO on NASDAQ, Information Age spoke to dLocal about its rise to Uruguay's first Unicorn fintech payments company.

dLocal, a Unicorn fintech payments company, is expected to make an IPO on NASDAQ, on Thursday June 3rd 2021.

Headquartered in Uruguay, dLocal is the country’s first Unicorn. It operates in 29 countries in Asia, Africa and Latin America, enabling global merchants to get paid and make payments securely, both cross-border and local-to-local. Its main clients are in streaming, financial institutions, advertising, SaaS, travel, e-learning and gaming.

It is led by its 30-year old CEO, and the team is truly global with staff across the globe in Israel, Uruguay, Argentina and the United States.

While emerging markets are high growth, they present profound complexities for merchants big and small given the fragmented payment systems, compounded by the different tax frameworks and local regulations.

dLocal navigates this complexity and makes it simple for merchants to add payment methods, products, and new markets efficiently, all through a single point of integration.

Since launching in 2016 it has secured over 330 global enterprise clients, including some of the largest in the world. Its platform allows companies to connect to over 600 local payment methods, across different geographies, effectively expanding their addressable markets.

The global payments industry is experiencing a rapid shift towards digital payment — in 2020 consumers and businesses worldwide made over 454 billion purchase transactions on global network cards — and the share of e-commerce as a percentage of total global retail payments volume expanded to 21% in 2020, compared to 16% in 2019.

To find out more about the company’s growth, the general trends in the fintech space and what it’s like to be Uruguay’s first Unicorn, Information Age spoke to Sumita Pandit, dLocal’s COO.

What are trends that are driving dLocal’s growth? What trends are you seeing in the fintech space?

The increasing adoption of e-commerce and online modes of payment in emerging markets has delivered significant growth for global merchants in recent years. As global merchants continue to benefit from these strong secular trends, we believe this will translate into larger transaction volumes and additional revenue for dLocal from the solutions we offer and the countries where we serve them today.

Here are some key market trends driving dLocal’s growth:

● Consumer expectations to make purchases or receive funds anytime, anywhere, using their preferred method of payment;

● The continued rise of a digital economy fueled by increased accessibility of the Internet and adoption of smartphones in both developed and emerging markets;

● Increased level of spending and online transactions among the middle class in emerging markets;

● Global merchants establishing a local presence in select emerging markets; and

● Highly complex and evolving local regulatory and tax environments, compounded by an increase in fraud and cyberattacks.

How does dLocal create value for clients?

We make the complex simple by redefining the online payments experience. dLocal enables global merchants to get paid and to make payments in a safe and efficient manner via a proprietary platform that has the ability to power both cross-border and local-to-local transactions in 29 countries.

Our cloud-based platform is highly scalable and flexible, providing a “one-stop shop” that allows merchants to consolidate their emerging market transaction services so as to better serve their customers.

Specifically, the platform facilitates a connection for merchants to over 600 local payment methods, across different geographies, effectively expanding our customers’ addressable markets while supporting foreign exchange, local tax, and fraud management, all in compliance with local regulations.

We are a trusted partner for some of the world’s largest companies and support more than 330 global merchants, including Amazon, DiDi, Microsoft, Spotify, Mailchimp, Wix, Wikimedia, and Kuaishou.

Sumita Pandit is COO of dLocal — Uruguay’s first Unicorn fintech company.

Why the business expects to keep growing?

We believe we are in the early stages of a financial technology revolution that is addressing increasingly complex payment challenges.

We have fostered a strong track record of repeatedly delivering new and relevant solutions and capabilities for global merchants in emerging markets and believe we are well-positioned to continue to innovate and be at the forefront of developments in payments technology.

Geographically, we plan to continue to leverage the scalability of our technology to broaden our geographic footprint. We want to enter new markets and expand our reach in the ones we’re already in. We will continue to target global enterprise merchants in our key verticals including, retail, streaming, ride-hailing, financial institutions, advertising, SaaS, travel, e-learning and gaming.

Our global expansion strategy follows the needs of our merchants by prioritizing markets with the most attractive opportunities and where our merchants face the most complex payments, compliance, and regulatory challenges.

Fintech disruption of the banking industry: innovation vs tradition?

Hasan Nawaz, CEO at HUBUC, explores how fintech disruption continues to challenge the traditional banking industry. Read here

What differentiates dLocal?

Our mission is to enable global merchants to connect seamlessly with billions of emerging market users. With that in mind, we created a highly differentiated model that combines proprietary technology, intellectual property, capabilities, and business processes to create a differentiated go-to-market approach:

● We offer access to more than 600 payment methods in 29 emerging markets through one direct API, one platform, and one contract, to both accept online payments and pay vendors and partners in local currencies.

● Our proprietary, fully cloud-based platform is highly scalable and flexible, purpose-built to meet global merchants’ high-performance expectations, outperforming the disparate legacy systems prevalent in emerging markets.

● Our direct integration with merchants helps us to better understand their needs, collaborate and build relationships.

● Our “One-stop shop” for global merchants to consolidate their emerging market transaction services with one trusted partner.

● Our ongoing dialogues with local regulators, exchanges, and tax authorities in different countries, and direct integration with certain tax payment systems, all of which enable optimization to quickly and efficiently adapt to regulatory changes.

How does it feel to be Uruguay’s first Unicorn? What are you future ambitions?

We were proudly born out of Uruguay, which forced us to think big and be global since our inception. This is largely reflected in our presence in 29 countries and the expanding geographic diversity of our team of over 300 professionals as of December 2020. We are mission-driven and are focused on creating innovative solutions, launching new products, and adding new functionalities, always seeking to ensure the best possible execution and to continue supporting the growth of our merchants. Delivering a superior technology infrastructure is a key pillar of our management team’s focus, as evidenced by the fact that three of our current key executives have served in senior technology roles within dLocal at some point during their tenures.

We intend to continue expanding into new markets, developing new products, and retaining and expanding our merchant base while growing their overall volume processed through our platform, all of which are drivers that will continue to propel our growth in the years to come.

Our core strategy continues to focus on organic growth. dLocal is growing rapidly. We will continue to target global enterprise merchants in our key verticals including, retail, streaming, ride-hailing, financial institutions, advertising, SaaS, travel, e-learning, and gaming.

Avatar photo

Nick Ismail

Nick Ismail is a former editor for Information Age (from 2018 to 2022) before moving on to become Global Head of Brand Journalism at HCLTech. He has a particular interest in smart technologies, AI and...

Related Topics