Kavak, a Mexican used car start-up, is expanding into three more LatAm nations and is embarking on its initial foothold outside the territory in Turkey as it strives to prove that it can extend its ‘super application’ online business model throughout emerging markets.
The Kavak Expansion
Founder and Chief Executive Officer at Kavak, Carlos Garcia Ottati, stated in an interview that at present, LatAm’s Kavak is brainstorming to finance USD 120 million in Colombia, Peru, and Chile and a minimum of USD 60 million in Turkey after establishing preliminary operations in the dusk of 2021. However, he also stated that Kavak was slashing expenditure at Brazil, Mexico, and Argentina as the economic ecosystem worsened.
Garcia Ottati stated at the company’s Mexican headquarters that they were confident regarding the extension. He indicated that they were doing so conservatively. The firm’s half a decade of experience and state-of-the-art technology would allow it to become a profitable source of income in new-fangled regions with smaller investments. Ottati stated that Kavak would expand on a much bigger scale more rapidly.
Kavak, which delivers used cars to clientele via brick-and-mortar centres and online platforms, was valued at USD 8.7 billion in a private fund-raising in September 2021. However, like any other tech unicorn on the globe, the firm has discovered itself within surging pressure to transform towards raging profits as investors recoil from dicey ventures. Phoenix-based online used car dealer Carvana Co. has plummeted over 90% from its pinnacle in August 2021 amidst misgivings that may make its business model profitable.
Garcia Ottati said that the firm was resolving various challenges in emerging markets, where approximately 90% of the deals took place betwixt individuals. This resolution would take place by delivering a ‘super application’ to fabricate lifetime consumers who look to Kavak to exchanging their cars, insurance, financing, warranties, and even paying parking tickets.
Ottati further elucidated that the unicorn was resolving accessibility to funding and that the firm was utilising tech to mature this prospect. In addition, the firm’s operations in Turkey had already showcased promising growth that could end up supporting more investment, he stated.
