peaks of 43. 2 percent in Chile
and 39. 7 percent in Argentina. But in Brazil and Mexico,
the most populous countries
in the region, the Internet
reaches only 22. 4 percent and
21. 8 percent respectively.
The significance of this regional digital divide lies in
what those numbers imply: if
only one in five Latin Americans has access to the Internet,
a broad sector of the population is currently denied an
important tool to further its
participation in civil society.
Its access to information, education and other services—all
of which have become increas-
In today’s ingly central in enabling peo-
technology- ple to build a better future—is
limited.
driven economy, In today’s technology-driven
bridging the economy, bridging this gap
is essential for countries to
digital divide break out of the periphery. The
is essential for company I lead, MercadoLibre,
serves as an example of how
countries to private companies, working
break out of the with credit markets and
international counterparts,
periphe:ry . can expand the Internet and its benefits to Latin American citizens. While I was studying at
Stanford, I came up with the
idea for a Latin America-based
version of eBay: MercadoLibre.
When I returned to Buenos
Aires in 1999, I got back in
touch with a few of my former
classmates and friends in Ar-
gentina, and together we de-
veloped a company that has
now grown to serve 12 coun-
tries in the region. Today, Mer-
cadoLibre is the largest online
trading platform in Latin
America, with over 1,000 em-
ployees, 28. 1 million users and
an operations’ volume of over
1. 5 billion in 2007, exclud-
ing the company’s classified
ads. This volume was achieved
by more than 5. 5 million buy-
ers and more than 2. 2 million
sellers. According to a study
conducted by The Nielsen
Company, almost 40,000 people already derive all or part of
their monthly income by selling on MercadoLibre.
Getting there required a lot
of support from friends, colleagues and mentors in the
United States. My professors at
Stanford University’s MBA program, to whom I first pitched
the idea, were invaluably supportive. They were the first to
introduce me to several investment funds that later provided
the required capital. While the
Internet and its overseas potential was still unsure, in the
first financing round, carried
out in November 1999, MercadoLibre obtained $7.6 million
from U.S. investors including
J.P. Morgan Partners (BHCA)
L. P., Flatiron Fund entities and
Hicks, Muse, Tate & Furst. In
the second financing round, in
May 2000, we raised $46.7 million from, among others, Gold-man Sachs, Banco Santander
Central Hispano, GE Capital
Equity Investments, Inc., J.P.
Morgan Partners (BHCA) L.P.,
and Hicks, Muse, Tate & Furst.
Two years after launching
the company’s operations, we
signed an agreement with U. S.-based eBay, the largest online
trading platform in the world.
The agreement involved cooperation, integration of business practices and technology
sharing. The arrangement
with the leading ecommerce
company in the world allowed
us to benefit from the hindsight and experience of our
partner in areas such as technology and management, helping us skip certain trial stages
and avoid many mistakes. A
few years later, eBay would
also benefit from our shared
experience. Working with us
helped our larger, more experienced partner learn how to
adapt its own services to the
realities of vastly different
countries, with their idiosyn-crasies and business practices.
MercadoLibre reached another milestone in August 2007,
when it was listed on the Nas-daq stock market, offering U. S.
and global investors the chance
to participate in a remarkably
growing business in a region
with extreme potential.
In short, the story of MercadoLibre illustrates how the
U.S. educational system, credit
markets and the cooperation
of businesses can enable Latin
American talent and entrepreneurship. It is an emblematic case study that shows the
role of private enterprises and
what collaboration between
the U.S. and Latin America can
achieve in terms of bridging
the global digital divide and
generating value for all the
players. The President-elect
can build on these efforts by
promoting similar and complementary industrial and
technological opportunities;
expanding research and scholarship to Latin Americans
seeking to study in the U. S.;
and publicly promoting the
success stories and opportunities in the region to investors
and business leaders.
The benefits are clear:
launching new companies offering original high-tech services to a market of over 500
million people, generating new
kinds of employment and developing the analytical capacity and tools required by these
companies to operate correctly.
These changes will, as in the
case of MercadoLibre, offer the
promise of new innovations
that spur technological advancement, access to the Internet and returns for investors in
the U.S. and in Latin America.
In the years to come, the
great challenge will be to generate new opportunities where
these educational, technological and financial exchanges
can become real, fosterin.g the creation of many more Merc- adoLibres in the region.
