It is no secret that I am a big fan of emerging market businesses. I believe they are often overlooked by the market, which is exactly where alpha tends to reside.
Businesses such as Mercado Libre & Sea Limited have been great investments for investors over the past decade(s).
dLocal is a Latin American business that facilitates payments for large conglomerates on a B2B basis, specifically in underserved emerging markets. It is a capital-light “toll bridge” business with a decade-long head start in local rails.
At today’s price, the market is pricing in perpetual take-rate erosion and stalled growth, yet even a bear-case model points to a mid-teens IRR. In my view, the skew is asymmetric.
Below you will find a 10,000+ word deep dive into the business, diving into all aspects including company history, competitive analysis, bull theses, full excel valuation model and what i’m personally doing with dLocal.
This has taken nearly a 100 hours of deep research, I hope you enjoy!