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  "documentTitle": "dLocal (DLO)",
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  "authorName": "Carson Block",
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  "presentationDate": "2022-11-16 00:00:00",
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  "notes": "The slide uses a mix of narrative text and expert testimony to challenge the company's growth story regarding margin compression and competitive advantage.",
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      "text": "Although DLO attempts to present this ability to engage in local-to-local payment processing as a competitive advantage, the marketplace for local payment processing is highly competitive, if not saturated.",
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      "text": "Although DLO attempts to present this ability to engage in local-to-local payment processing as a competitive advantage, the marketplace for local payment processing is highly competitive, if not saturated.",
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      "text": "DLO's shift to local-to-local payment volumes have been growing rapidly since at least 2019. Based on comments from one former executive, by 2020 we believe that local-to-local had already reached at least 20-25% of its business.",
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      "text": "volume, not margins (i.e., Take Rate). In short, after successfully selling approximately $1 billion of shares on a story of fast growth and high margins, management began admitting margin compression while Take Rates fell.",
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      "kind": "quote",
      "text": "Source A: 'I think that because what has happened is that in the past like five or seven years ago... these companies were all shifting from collecting locally and settling abroad to collect locally and settling locally.'",
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      "text": "I think that because what has happened is that in the past like five or seven years ago, when these companies were expecting - now Google has been in Latin America for 15 years - but other companies like Airbnb or AliExpress when these companies were coming to Latin America, having the cross-border model was very interesting, because they didn't know what the market was like and having the cross-border model was an easy way to come, right? You didn't have to set up an office or set up a company locally. You would just connect to the PSP that could act as a merchant of record and you start your business very quickly. But as time goes on and they were realizing that the market was good, it was interesting to stay. They realize that paying for that FX didn't make much sense. So, they decided to - these companies were all shifting from collecting locally and settling abroad to collect locally and settling locally. So, Dlocal became more and more of a PSP in the sense of having both options. And the — Source A (former executive).",
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      "text": "Footnotes 18-27 detailing earnings calls, regulatory filings, and industry reports.",
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