EconomyEditor's PickNewsSoftBank-backed used-car startup Kavak becomes first Mexican unicorn

1 year ago156 min
imageStock Markets1 hour ago (Oct 01, 2020 03:30AM ET)

(C) Reuters. A logo of used autos platform Kavak is pictured on a car in Mexico City

By Daina Beth Solomon

MEXICO CITY (Reuters) – SoftBank-backed used-car platform Kavak has become Mexico’s first tech “unicorn” after reaching a $1.15 billion valuation in its latest funding round last month, Chief Executive Carlos Garcia told Reuters.

The Mexico City-based startup has raised over $400 million in total funding since its founding four years ago, with Japan’s SoftBank, Hong Kong’s DST Global and U.S.-based Greenoaks Capital leading the recent round, Garcia said in an interview on Wednesday.

The company is SoftBank’s most recent Latin American investment to become a unicorn – lingo for tech startups valued at more than $1 billion – after delivery app Loggi and gym membership app Gympass, both from Brazil, and Colombian delivery app Rappi.

Japanese tech investor Softbank (OTC:SFTBY) last year vowed to deploy $5 billion in the region, which Mexican investors praised as a potential game changer for young companies that struggle to fundraise locally.

“It’s really humbling for us to be the first Mexican unicorn. It’s something really important for the ecosystem in Latin America, and especially Mexico,” Garcia, 37, said.

Kavak, an online platform for buying and selling secondhand cars with operations in Mexico and Argentina, is laying plans to launch in Brazil early next year, Garcia said.

Kavak entered Argentina in August through its merger with used-car platform Checkars.

After building the business gradually in Mexico, Garcia said he aims to scale up faster in Brazil, Latin America’s biggest economy, with plans to hire 500 people within a year. Kavak employs some 800 people in Mexico and Argentina, a workforce that Garcia says will nearly double next year.

Despite the hit of the coronavirus crisis, Garcia said traffic has recovered to pre-pandemic levels as shoppers become more comfortable with e-commerce and seek alternatives to public transportation.

He expects Kavak to turn a profit in the next couple of years, and going public is in his sights, too.

“A route to do an IPO is in our plans… probably in the next two to three years we’d think about doing that,” he said.

SoftBank-backed used-car startup Kavak becomes first Mexican unicorn

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Leave a Reply

Your email address will not be published. Required fields are marked *