Used-car startup Kavak becomes first Mexican unicorn

Kavak

, the leading company in the used car market, has become the first Mexican startup to reach the unicorn status after being valued for over USD $1.15 billion in only four years of operations.

The company was co-founded in 2006 by its current CEO, Carlos García Ottati, in Mexico City , where it began operations with only three vehicles.

A year later, Kavak opened the world’s largest car reconditioning center, located in Lerma, State of Mexico, and is now present throughout the country.

The company knew how to identify the market for used cars , giving security and transparency to all the purchase procedures, easing processes, paperwork, and generating a customized financing and warranty system in which each customer chooses how to conduct each operation.

“We are very proud of what we’ve built. We know this is an important milestone for us and the entrepreneurship ecosystem, but we also know that our story is just beginning. We have a lot yet to build and many clients to serve,” said García Ottati.

Since its foundation, the startup implemented a digital model based on the purchase of private vehicles to then recondition them in their own offices and offer them for resale to the public.

Cars

have a safety and working warranty in addition to a full financing service and post-sale monitoring.

This model generated a three-digit exponential growth, backed by Softbank, Greenoaks, DST Global, Kaszek Ventures, QED Investors, and General Atlantic, among others.

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“Kavak has built the safest and most reliable company to buy and sell used-cars in Latin America . We are very proud to closely follow each step given by the first Mexican unicorn startup and the expansion of its customer-based model throughout the Latin American region,” asserted Marcelo Claure, Softbank’s CEO.

This year, due to the COVID-19 pandemic, Kavak modified its operational model to create products that adapt to the new consumers of the automotive industry and implemented entirely digital processes.

This allowed growth of over 100% in sales compared to 2019 and to boost its national and international expansion.

Currently, Kavak has over 700 employees and several subsidiaries in Mexico, including two car reconditioning centers located in Lerma and Guadalajara, in addition to its Argentina based headquarters, the product of its fusion with Checkars.

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“Resources are mostly focused on expanding the business model in the short and medium term so that more Latin Americans can live the experience of buying or selling a car . We gave our first step with our arrival in Argentina; now, we will continue with Brazil, which is the region’s largest used car market ,” added Kavak’s CEO.

mp