Kavak, the Mexican platform for buying and selling pre-owned cars, reached a valuation of US$4 billion after raising US$485 million in new funding, the company told
Founded in 2016 and backed by Japan’s SoftBank Group, it became Mexico’s first tech ‘unicorn’ in October after reaching a value of just over $1 billion.
The new capital injection will help Kavak - which also operates in Argentina - to launch in Brazil in the coming months, said its CEO, Carlos García.
The executive said he expected Brazil, Latin America’s largest economy, to eventually overtake the two initial markets for Kavak, which aims to simplify used-car buying in emerging markets.
What made Kavak the first Mexican unicorn?
Kavak launched its financing arm Kavak Capital in May 2020, and Garcia claimed that 60% of clients now use that in-house option, which offers interest rates of 14% to 20%, compared to traditional options that he says offer rates of up to 60%.
However, the rapid expansion has also brought challenges: some users complain on social networks of poor customer service.
Garcia recognized the need for more employees to handle these problems and recruited 1,500 people in Mexico in the last three months, bringing Kavak’s workforce to 2,500.