The International Finance Corporation (IFC), a member of the World Bank Group, announced an investment of $130 million in Magazine Luiza S.A. (Magalu), a leading multi-channel retailer in Brazil with over 40,000 employees and operations in 20 states. IFC’s investment will help enhance the company’s technology infrastructure and strengthen its marketplace.
IFC's investment in Magalu includes a $100 million loan from IFC’s own account, and up to $30 million mobilized with investors. This financing package is structured as an incentive-based loan, targeting the collection and recycling of e-waste. Magalu plans to increase its e-waste collection and recycling efforts by more than five times over the next five years. This investment will also indirectly help to promote the development of micro, small, and medium-sized enterprises (MSMEs) and increase the representation of women in its technology department.
Brazil's formal retail sector, encompassing hypermarkets, supermarkets, and mini markets, accounts for approximately 50 percent of the market, significantly lower than in developed economies. This presents a crucial opportunity to improve access to affordable products for underserved populations. Additionally, in Brazil, MSMEs constitute 90 percent of businesses but contribute only 50 percent of formal jobs and 30 percent of Gross Domestic Product (GDP), highlighting their untapped economic potential. With e-commerce representing just 10 percent of retail sales, the adoption of digital tools could drive formalization, enabling MSMEs to expand market reach, integrate into supply chains, and access financial services. The potential for generating more quality jobs, especially for women, is an important element of this investment.
"The celebration of this investment strengthens our capital structure and represents an important endorsement from IFC for our social and environmental policies," says Frederico Trajano, CEO of Magalu. "This is a powerful indication that we are moving in the right direction."
In addition to the investment, IFC will support Magalu in developing comprehensive environmental and social (E&S) management systems and aligning with international best practices.
"Our investment in Magalu underscores IFC’s commitment to supporting digital transformation and sustainable development in Brazil. By enhancing Magalu’s technology infrastructure, we aim to drive inclusive growth and environmental sustainability and promote the generation of more qualified jobs in the Brazilian retail sector,” said Manuel Reyes Retana, IFC Regional Director for South America.
This partnership with Magalu aligns with the World Bank Group’s Country Partnership Framework (CPF) for Brazil for the period between 2024 and 2028, which focuses on building a more productive, inclusive, and greener economy.
About Magalu
Magalu is the company that is digitalizing Brazilian retail. Since May 2011, the company has been listed on the Novo Mercado of B3. In recent years, it has made several acquisitions, consolidating its national presence. In addition to more than 1,250 stores in 20 states across the country, Magalu also operates six online brands (Netshoes, Zattini, Época Cosméticos, Estante Virtual, and KaBuM!), 360,000 sellers on its marketplace, and the food delivery platform aiqfome. The company's app is accessed by over 50 million active users monthly. Its people management policy has been recognized with several awards.
About IFC
IFC — a member of the World Bank Group — is the largest global development institution focused on the private sector in emerging markets. We work in more than 100 countries, using our capital, expertise, and influence to create markets and opportunities in developing countries. In fiscal year 2024, IFC committed a record $56 billion to private companies and financial institutions in developing countries, leveraging private sector solutions and mobilizing private capital to create a world free of poverty on a livable planet. For more information, visit www.ifc.org.
Stay Connected with IFC on social media.
Contacts
Patricia B. de Carvalho
Communications Officer, BrazilSão Paulo
+55 (11) 5185-6873