22 Sept 2021
Mexican-Based Kavak Becomes Second-Most Valuable Latam Startup
The Index Today
Carlos Garcia, Kavak’s chief executive told reporters the firm has acquired $700 million with its Series E round and is now ranked among the leading startups along with Nubank.
The newly gained capital investment has enabled Kavak to pursue major expansion plans and become a one-stop shop for buying and selling cars. The company has revealed that major funding came from General Catalyst, a U.S venture capital firm. Other entities including Tiger Global, Spruce House and Ribbit Capital have also provided contributions.
The Mexican startup, Kavak, was founded around five years ago and has expanded into regions of Argentina and Brazil. The company aims to further its horizon and take advantage of emerging markets in other continents. Carlos Garcia told reporters, “Were looking outside the region for our next step. We want to go into the biggest, most broken market where we can really make a dent, where we can really make users lives better, so were not agnostic to Latin America.”
Kavak has grown tremendously in recently years, almost doubling its valuation to $4 billion with various investment rounds. During the pandemic, people resorted to pre-owned cars and shunned public transport facilities. This shifted demand and gave Kavak an edge in the market. The company has employed over 5000 people across its offices.
Garcia said, “In the US, you’re seeing a shortage of products in the new and used car industry. We’re starting to see this early trend in Latin America, we think it’s going to be a huge driver for Kavak in the next few months.”
Chinese firms such as Didi Global, a major ride-hailing app has been a source of inspiration for Kavak’s business model. Garcia has said that Chinese consumer habits are quite similar to those among Latin people. He stated, “The composition of the people there, how they live, it’s more similar to Latam than the composition of how people live in the U.S. It’s easier for us to think about logistics, how to get to users.”