Uruguayan payments giant dLocal is facing a critical test in Africa. While the company posted strong top-line growth in its second-quarter earnings for 2025, a sudden collapse in its once-booming Egyptian market has exposed the volatility of its emerging markets strategy. Now, its planned $150m acquisition of African fintech AZA Finance — intended to bolster its continental infrastructure — is mired in uncertainty, leaving dLocal to navigate a complex recovery.

The company’s recent financial reports paint a picture of sharp contrasts. After surging 318% year-over-year in late 2024, dLocal’s revenue from Egypt stumbled in the second quarter of 2025, contributing to a $3m drop in gross profit for its Africa & Asia segment. The company attributed the decline to a “partial volume loss due to a large merchant implementing redundancies in the market” and lower foreign exchange spreads following a currency devaluation.

The downturn in Egypt creates a significant gap for a company that has historically relied on high-growth markets to offset challenges elsewhere, such as the 80% revenue collapse it experienced in Nigeria in 2024 after a currency devaluation.

A Troubled Solution

The intended remedy for its African volatility was the acquisition of AZA Finance, a Nairobi-founded company specialising in cross-border payments and foreign exchange solutions across the continent. Announced in June 2025, the deal was meant to provide dLocal with deeper access to African currency corridors, an expanded liquidity network, and sophisticated treasury services.

However, the deal hit a snag almost immediately. According to a recent company filing seen by Launch Base Africa, just a month after the announcement, AZA Finance became the subject of a “third-party complaint.” The nature of the complaint has not been disclosed, but its impact is significant. dLocal now states it may pursue a “restructured deal focused on the assets/entities most relevant to dLocal,” subject to the claim’s conclusion and regulatory approvals.

Complicating matters further is a $23.2m credit facility dLocal extended to AZA Finance to fund its working capital pending the acquisition. This loan is now listed as an asset on dLocal’s balance sheet, but the company explicitly warns that, depending on the outcome of the complaint and the deal’s final structure, it “may be required to reassess the recoverability of the asset.” A potential write-down of this loan would add a financial sting to the strategic setback.

A Glimmer of Progress on the Ground

Despite the corporate-level turmoil, there are signs that the operational logic behind the deal is moving forward. In a recent announcement seen by Launch Base Africa, it was revealed that AZA Finance has successfully launched a remittance partnership with Banque du Caire in Egypt. The new corridor allows partner MondialPay to send remittances from Italy for instant payout in Egypt.

This development, celebrated as a way to “bring more hard currency into Egyptian hands at fair rates,” suggests that the core assets dLocal seeks — functional, licensed payment corridors — are operational. It provides a glimmer of hope that even if the full acquisition fails, a restructured deal could salvage these valuable operational components.

A Familiar Pattern of Volatility

For dLocal, navigating market-specific crises is part of the business model. The company’s success is built on its “One dLocal” platform — a single API and contract that gives global merchants like Amazon and Spotify access to over 40 emerging markets. While this model simplifies expansion for its clients, it exposes dLocal directly to the economic and political instability of these regions.

The recent issues in Egypt and with the AZA acquisition follow challenges in Argentina, where a peso devaluation impacted dLocal’s bond portfolio. The company has since reduced its Argentine exposure by over 80%. These incidents underscore a constant balancing act: capturing high growth while mitigating high risk.

While Egypt falters, other regions are picking up the slack. The company’s “Other Africa & Asia” segment saw gross profit grow 90% year-over-year, largely driven by a strong performance in South Africa. This growth is reportedly fueled by the rapid expansion of Chinese e-commerce giants like Temu and Shein, which have partnered with dLocal for payment processing.

Amidst the operational challenges, dLocal is also undergoing corporate changes. The company recently appointed Guillermo López Pérez as its new Chief Financial Officer. Simultaneously, a major shareholder, an entity associated with private equity firm General Atlantic, is selling 15 million shares in a secondary offering expected to close on September 5, 2025. dLocal itself will not receive any proceeds from the sale.

The central question for dLocal is whether the operational promise of the AZA Finance deal can be disentangled from its legal and financial complications. As it leans on growth from partners like Temu in South Africa, its ability to successfully restructure the AZA transaction could determine whether its African strategy stabilises or continues its rollercoaster ride.