Oct 12, 2026 · 57 min
MercadoLibre and Nubank bet on Latin America’s digital future
The Biggest Investing Opportunity of 2027 Is Hiding in Latin America
The episode tests whether two digital platforms can keep compounding by prioritizing market share, customer depth, and regional modernization over near-term margins.
- 1Nubank’s low cost to serve and data-driven underwriting leave substantial room to deepen relationships with existing customers.
- 2MercadoLibre treats logistics, payments, and credit as a reinforcing flywheel, accepting near-term margin pressure to expand market ownership.
- 3Brazilian politics and foreign competition matter, but neither automatically overturns the companies’ longer-term operating advantages.
Don't miss
Federico Sandler describes Mercado Pago’s transformation in Argentina from an overlooked product into an everyday financial ecosystem.
The brief
Federico Sandler, a former investor-relations executive at MercadoLibre and Nubank, joins Shay and Brad to examine why both companies remain long-term Latin American bets.
The companies share a willingness to sacrifice near-term margins for market share: MercadoLibre funds shipping, logistics, and fintech, while Nubank modernizes costly branch-based banking.
Nubank’s next runway may come less from adding Brazilian customers than from making existing users primary-bank customers through deeper products, engagement, and revenue per account.
The discussion separates Brazil’s political cycle from secular business performance, while weighing competition from Shopee, TikTok Shop, Amazon, and local players.
MercadoLibre’s commerce and fintech businesses reinforce one another through payments, repayment data, and credit, creating a flywheel that management is willing to fund ahead of demand.
Sandler’s account of Mercado Pago’s evolution in Argentina—from overlooked product to everyday financial ecosystem—captures the adoption dynamic behind the broader thesis.
What was said on this episode
31 statements · 26 positive · 2 negative · 2 mixed · 1 neutral
MercadoLibre’s cultural system attracts and retains talent aligned with its long-term vision.
“an operating system that allows a company to attract and retain the talent that is aligned with the long-term vision of the company”
Listen at 2:53
MercadoLibre deliberately accepted negative operating margins to fund logistics and fintech expansion.
“we took operating margins to below zero on purpose to fund free shipping and the logistics network and also begin to get our... first inroads into Mercado Pago, Mercado Credito”
Listen at 7:25
MercadoLibre’s current investments are purchasing future company profits.
“they are buying the future profits of the company”
Listen at 8:24
Nubank brought 1.5 million Brazilians into the banking system.
“1.5 million Brazilians that went into the banking system thanks to Nubank”
Listen at 8:58
MercadoLibre will have greater earnings power than current expectations imply.
“you're going to see more earnings power in this business than anyone is giving them credit for right now”
Listen at 11:37
Brazilian commerce is likely the world’s most attractive non-speculative long-runway commerce opportunity.
“Brazilian commerce, which is probably the most attractive. non-speculative, but still long runway commerce opportunity in the world, in my opinion”
Listen at 12:35
A stronger Brazilian real improves MercadoLibre and Nubank’s reported financial results.
“a stronger real lifts the numbers”
Listen at 14:19
Lower Brazilian interest rates will reduce funding costs and help borrowers at Nubank and MercadoLibre.
“lower rates is going to help the funding costs and the borrowers”
Listen at 14:22
A business-friendly, fiscally responsible Brazilian government would benefit the region.
“it's slightly more positive that a business-friendly, fiscally responsible regime comes into Brazil”
Listen at 15:04
Brazilian election results should not be mechanically extrapolated to company performance.
“I'd be careful to extrapolate, you know, the election results to the future performance of the business”
Listen at 16:52
A business-friendly regime eventually brings lower inflation, funding costs, and greater foreign investment.
“a business friendly regime eventually brings lower inflation, lower funding costs, more foreign direct investment”
Listen at 17:08
Latin America’s young, mobile, underbanked population creates a major opening for Nubank and MercadoLibre.
“you have a big opening for Nuon Medli”
Listen at 22:16
Young Latin Americans are unlikely to return to physical stores or bank branches.
“I don't imagine. The son of my friend or the daughter of my girlfriend, they're going to go to a physical store to a branch. I find it hardly unlikely.”
Listen at 23:59
Nubank’s cost to serve is 80% lower than major incumbent banks.
“The moat here is in their cost to serve. It is 80% lower than a Tao and these other large incumbents.”
Listen at 24:30
Nubank’s behavioral-data underwriting improved 90-plus-day delinquency across income bands.
“the result of that is a 90 day plus delinquency has improved in every income band”
Listen at 26:11
AI agents handle 60% of Nubank’s Brazilian workflows and conversations at human-equivalent quality.
“60% of all the workflows and conversations in Brazil. are being done by AI agents with the same quality as a human.”
Listen at 26:43
Branchless banking alone reaches incumbent efficiency, not Nubank’s efficiency.
“no branches gets you to incumbent efficiency level, not NuBank”
Listen at 28:16
NuFormer reduces non-collection from nine to three borrowers per 100 in the example population.
“With new former in the same population, you would not collect from three”
Listen at 29:54
Nubank reaches 62% of Brazilian adults, but only 30% use it as their primary bank.
“Nubank has like 62% of the Brazilian adults, but only 30% use it as primary bank account”
Listen at 32:14
Converting Nubank customers to primary-bank users will increase revenue per active customer.
“the shift to primary is what is going to drive more RPAC”
Listen at 32:21
Nubank can compete for a U.S. customer segment, but U.S. operations will not be transformative soon.
“I think they have a fighting chance in the US, but I won't expect the US to be transformative.”
Listen at 36:29
MercadoLibre has compounded at over 40% with unusual sustainability and consistency.
“a tale of compounding at a 40% plus clip at a sustainability or frequency, I should say, and consistency that no one else is really matching in the market”
Listen at 37:52
MercadoLibre is exceptionally effective at executing its strategy.
“They are an execution machine”
Listen at 40:43
MercadoLibre can generate more absolute profit despite lower margins if its business expands substantially.
“a lower margin on a much bigger business can mean far more profit”
Listen at 41:25
MercadoLibre’s operating income rose from a 2019 loss to $3.2 billion in 2025.
“from 153 million operating loss in 2019 to like 3.2 billion, 3.2 billion of operating income in 2025”
Listen at 41:31
MercadoLibre’s Brazilian GMV grew 39% in the latest quarter.
“Brazilian GMV growth, like all these KPIs we're talking about, 39% last quarter”
Listen at 43:34
MercadoLibre is Latin America’s dominant e-commerce player and will remain regionally focused.
“I think the 800-pound gorilla. from Mexico downwards is Melly. And they will stay in Latin America.”
Listen at 50:48
MercadoLibre’s competitive lead will widen if it continues executing effectively.
“if they continue to execute this way, I think their distance will only get wider versus the rest”
Listen at 51:14
Vista Energy produces oil and gas at low cost.
“Vista produces this very cheaply”
Listen at 52:41
Vista Energy is an attractive Latin American investment candidate outside fintech and e-commerce.
“I think it's an interesting business to look at”
Listen at 53:00
Mercado Pago is becoming users’ complete financial ecosystem in Latin America.
“your full financial ecosystem begins to be Mercado Pago”
Listen at 56:03
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.