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The Mexican Startup Kavak, After Having Its Estimated Value Over 4 Billion Dollars, Will Reach Brazil With Six Stores for Buying and Selling Used and Semi-New Cars in the State of São Paulo, Where R$ 2.5 Billion Will Be Invested
The Mexican startup Kavak, for buying and selling used cars, announced that it will officially arrive in Brazilian territory. The company, which was the first Mexican to become a unicorn, that is, the first to have a value greater than one billion dollars, will start its activities with 2.5 million used cars up to 10 years old and will have six stores in São Paulo, generating over 500 jobs.
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Mexican Startup Invests R$ 2.5 Billion to Enter Brazil
The startup is investing R$ 2.5 billion for the new used car stores in São Paulo. The investment became viable after October last year, when the Mexican reached a value of US$ 4 billion after raising US$ 485 million in new funds, earning the title of unicorn.
According to one of the company’s founders and president of the Brazilian subsidiary, Roger Laughlin, the startup is one of the leaders in the used car market in Latin America and the stores in São Paulo will be its largest operations.
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According to the executive, the company will work to lead the sector that accounts for more than 10 million transactions per year and over R$ 600 billion each year. The new resources will serve to expand the infrastructure of the Mexican startup to 1 million m² by the end of next year.
Innovative Business Models
The executive emphasizes that the business model in São Paulo will be the same as the Mexican one and that the local operation will be a significant challenge, considering that the used and semi-new car industry in Brazil is highly decentralized and fragmented.
At Kavak, any owner of a used car in good condition can sell it to the startup and receive a budget in less than two minutes, as the inspection and documentation study are done through the company’s website. The purchase offer and formalization will also take place online. For the next buyer, the purchase process also occurs through the Mexican website.
The company has its own workshop and redirects the car for sale after all maintenance and reconditioning so that the vehicle can circulate again. Kavak offers two years of warranty to its buyers, in addition to maintenance, and also facilitates the documentation formalization with a representative at the notary office. It is worth noting that, with the startup’s arrival in Brazil, it will operate in three countries, including Mexico and Argentina.
Meet Kavak
The story of the Mexican startup began when Carlos Garcia, the current CEO of the company, traveled from his home country, Venezuela, to Mexico in 2014 to run the regional office of Linio.
The startup was created alongside Loreanne García, co-founder of the company, and Roger Laughlin, Sales Director of Linio. After two years of planning, in October 2016, the founders sold their first car, a 2014 Jetta. The Mexican startup began with just 3 cars and attracted the attention of investors like Mountain Nazca, Kaszek, SoftBank, and others.
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