DLocal Limited
Financials · Transaction & Payment Processing Services
Structural: cross-border payments orchestrator for EM corridors (LatAm/Africa/Asia) where local rails (Pix, OXXO, M-Pesa, UPI) fragment the merchant experience. One API, one contract, settlement in USD/EUR; DLO absorbs FX, fraud, compliance, tax withholding.
TPV grew $4B (2020) -> ~$25B run-rate (2025) on the back of $AMZN, $MSFT, $NFLX, $GOOGL, $META, Spotify, Shopee, Tencent.
- Picks-and-shovels on EM digital commerce (Pix volume in BR doubling annually; UPI in IN now >15B tx/month).
- Merchant-of-record moat: each new corridor is a multi-year licensing slog (PSP licenses in 40+ countries) that compounds defensibility.
- Take-rate floor in TPV/revenue mix suggests ~1% structural; margin recovery if Tier-1 mix stabilizes.
- Founder-led (Kanovich), still ~30% insider-owned post-IPO.
- Net cash balance sheet, FCF-positive, ~30% adj-EBITDA margins even post-compression.
- Muddy Waters short report Nov-2022 alleging undisclosed related-party flows + suspicious cash movements; stock never fully recovered the multiple.
- Take-rate compression: 2.0%+ in 2021 -> sub-1.2% as $AMZN/$MSFT-style Tier-1 enterprise mix expands and demands volume discounts.
- Customer concentration: top-10 merchants >60% of TPV; one Tier-1 churn = 10-15% revenue hit.
- Competitive pressure from $PAGS, $STNE, $MELI, Adyen, $PYPL Braintree all bidding for the same EM acquiring flow.
- Regulatory: Brazilian central bank Pix mandate compresses MDR; Argentina capital controls episodic.
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