Mexican used-car startup Kavak expands outside Latin America


MEXICO CITY (Reuters) – Mexican used-car platform Kavak is investing $180 million to open places of work and make its platform accessible in 4 new nations, together with Turkey – its first location outside Latin America, the corporate mentioned Wednesday.

Kavak, which calls itself the biggest pre-owned automobile operation on the earth, will enter Colombia, Chile and Peru with a deliberate funding of $120 million. The firm has earmarked $60 million for its enlargement to Istanbul, Turkey, Chief Executive Officer Carlos Garcia mentioned.

“Turkey is a $120 billion market, so it is an enormous alternative,” Garcia mentioned in an interview with Reuters. “They face related issues that we face in Mexico and Brazil,” he added, referring to fraud in used-car gross sales and troublesome entry to financing.

The SoftBank-backed startup is valued at $8.7 billion, in accordance with Garcia, and has skilled speedy development in its native Mexico, which accounts for 60% of its operations. Kavak additionally operates in Argentina and Brazil.

That scale-up, nonetheless, hasn’t come with out velocity bumps. Kavak minimize an estimated 150 jobs from its Sao Paulo and Rio de Janeiro operations final month, lower than a 12 months after increasing to Brazil, a results of investing forward of development and needing to regulate to altering market situations, Garcia mentioned.

Garcia added that Kavak isn’t at the moment anticipating “huge layoffs.”

The firm has additionally confronted highly-publicized social media complaints about its customer support in Mexico.

Garcia attributed a few of that to backlogs created by pandemic shutdowns of presidency places of work, delaying the mandatory paperwork round used-car gross sales.

“We have a bunch of customers that we positively may serve higher,” Garcia mentioned.

“What I wish to ask my customers is what occurs if Kavak does not exist?” he added, citing the informality of the used-car market.

(Reporting by Cassandra Garrison; Editing by Josie Kao)

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