DLocal's Strategic Position in the Evolving Fintech Landscape

In the ever-shifting terrain of global finance, few stories encapsulate the promise of emerging markets as vividly as dLocal's ascent. As digital commerce accelerates and cross-border trade becomes increasingly frictionless, dLocal has positioned itself at the nexus of innovation and infrastructure, enabling merchants and consumers in high-growth economies to participate in the global digital economy. With Goldman Sachs' recent strategic moves—ranging from underwriting dLocal's secondary offering to launching an ESG-focused emerging markets ETF—the stage is set to examine how dLocal's business model aligns with macroeconomic tailwinds and investor sentiment in 2025.

A Defensible Business Model in High-Growth Markets

dLocal's first-half performance in 2025 underscores its defensiveness and scalability. In Q1, the company reported a Total Payment Volume (TPV) of $8 billion, a 53% year-over-year increase, with a net retention rate of 144%—a testament to its sticky merchant relationshipsDLocal Limited (DLO) Q2 FY2025 earnings call transcript^[3]. By Q2, TPV surged to $9.2 billion, marking the third consecutive quarter of over 50% year-over-year growthUnderstanding dLocal's Latest Secondary Offering Insights^[1]. This momentum is driven by dLocal's ability to localize payment solutions in markets where digital adoption is still nascent. For instance, its expansion into the UAE, Turkey, and the Philippines has allowed it to tap into regions with untapped e-commerce potential, where underpenetrated financial systems create both challenges and opportunitiesUnderstanding dLocal's Latest Secondary Offering Insights^[1].

Goldman Sachs, as a joint bookrunner for dLocal's secondary offering in 2025, has signaled institutional confidence in this strategy. The offering, which included 15 million Class A common shares, was led by J.P. Morgan, Goldman Sachs, and Morgan Stanley, reflecting a consensus among Wall Street's heavyweights that dLocal's model is not just viable but scalableUnderstanding dLocal's Latest Secondary Offering Insights^[1].

Goldman Sachs' Dual Play: dLocal and the ESG Imperative

Goldman Sachs' engagement with dLocal extends beyond equity underwriting. The firm recently launched the Goldman Sachs Emerging Markets Green and Social Bond Active UCITS ETF (GEMS), a fund targeting sustainable infrastructure in emerging marketsGoldman Sachs Asset Management Launches Emerging Markets Green and Social Bond Active ETF^[4]. While seemingly unrelated, this move highlights a broader trend: investors are increasingly seeking opportunities that combine financial returns with social impact. dLocal, by facilitating financial inclusion in markets where 1.4 billion adults remain unbankedTech Pulse Check: Observations on Themes and Future Opportunities^[2], aligns with this ethos. Its payment rails empower small businesses and consumers to access digital economies, a mission that resonates with ESG-focused capital.

Goldman Sachs analysts have also adjusted their price target for dLocal's stock to $10.00, maintaining a “neutral” rating but acknowledging the company's potential to outperform in a fragmented marketDLocal Limited (DLO) Q2 FY2025 earnings call transcript^[3]. This cautious optimism is echoed by Wall Street at large, where the average twelve-month price target for dLocal stands at $13.73, suggesting a consensus that its growth trajectory remains intactUnderstanding dLocal's Latest Secondary Offering Insights^[1].

The Bigger Picture: E-Commerce, AI, and the Future of Payments

The broader context for dLocal's success lies in the confluence of three megatrends: the digitization of commerce, the rise of artificial intelligence, and the reconfiguration of global supply chains. According to Goldman Sachs, AI is accelerating digital transformation across sectors, including fintech, by optimizing fraud detection, personalizing user experiences, and streamlining cross-border transactionsTech Pulse Check: Observations on Themes and Future Opportunities^[2]. For dLocal, which processes payments in 150 currencies and 25 local payment methods, AI-driven analytics could further enhance its value proposition by reducing friction in high-volume, high-variability environments.

Meanwhile, the shift in global economic gravity toward Asia, Africa, and Latin America—regions where dLocal operates—positions the company to benefit from long-term demographic and technological tailwinds. As dLocal's CEO noted in its Q2 earnings call, markets like India, Brazil, and Southeast Asia are poised for “double-digit annual growth through 2030,” driven by rising internet penetration and a young, tech-savvy populationDLocal Limited (DLO) Q2 FY2025 earnings call transcript^[3].

Risks and Realities

No investment thesis is without caveats. dLocal operates in a highly competitive space, facing challenges from global payment giants like PayPal and regional players such as Naspers' PayU. Regulatory risks in emerging markets—where compliance frameworks are often fragmented—also pose operational hurdles. However, dLocal's rapid licensing expansion and its focus on localization (e.g., integrating with local banks and payment gateways) suggest a proactive approach to mitigating these risksUnderstanding dLocal's Latest Secondary Offering Insights^[1].

Conclusion: A Fintech Bridge to the Future

As the world grapples with the dual imperatives of digital inclusion and sustainable growth, dLocal's role as a bridge between emerging markets and global e-commerce is both timely and transformative. Goldman Sachs' dual strategy—backing dLocal's equity while promoting ESG-aligned debt in emerging markets—reflects a broader recognition that the future of finance lies in democratizing access to technology and capital. For investors, dLocal represents not just a bet on a single company, but a stake in the next phase of globalization: one where payments infrastructure becomes the backbone of economic empowerment.