The year 2020 will mark a before and after in Kavak’s mileage. The car buying and selling company founded by Carlos García Ottati, Roger Laughlin and Loreanne García Ottati at the end of 2016, after a bad experience with the former trying to sell his vehicle, reaches its fourth anniversary after lifting its third round of sales in September. financing, which adds more than 400 million dollars of capital backed by investors such as Softbank, Greenoaks, DST Global, Kaszek Ventures, QED Investors and General Atlantic, among others.
With this, the company and its investors assure, it reached a valuation of 1,150 million dollars, entering the select group of “unicorn” companies, those that achieve a value greater than 1,000 million dollars in their initial stage. After reaching this milestone, the question of what’s next for the company began to arise among investors. “We are ready to expand outside of Mexico”, responds García Ottati, CEO of the firm.
Kavak implemented a digital model based on the acquisition of cars from individuals, which it reconditions in its own branches and offers for sale to the public, with a guarantee, financing and after-sales service. It has a technology center where about 200 people work, including systems engineers and data science experts, focused on developing algorithms that allow it to be more accurate when setting vehicle prices, making credit ratings and credit ratings. model recommendations to customers.
The company, which has more than 700 employees, dozens of branches and two refurbishment centers, will use the money from the last round in its expansion into South America. founded in 2018 and that in its first year of operations reached a turnover of eight million dollars and 1,500 transactions.
In the next 18 months, Kavak will invest $ 10 million to rebranding Checkars points of sale, improve infrastructure, duplicate the catalog and build a technology center similar to the one it has in Mexico. It will also seek to reach Brazil, the largest pre-owned car market in the region.
These movements occur in the midst of the recovery that the sector is experiencing after the hit by the coronavirus pandemic. “We anticipate that the demand for pre-owned, between now and the end of the year, will be greater than what we would have had without COVID-19. Those who used to use public transport are now looking for a car, and pre-owned cars have become a good option, ”says García Ottati.
