Startup Mexican Used Car Dealer Kayak Advances in Latin America, Targets Brazil

RIO DE JANEIRO, BRAZIL – Mexican startup Kavak, which operates in the used car sales market, makes its first expansion in Latin America with the purchase of Argentine company Checkars. The value of the agreement is US$10 million (R$50 million).

Carlos Garcia Ottati, co-founder and global CEO of Kavak, says that the company has expanded its operation to Argentina because it is the third-largest market for vehicles in Latin America and because the country has greater familiarity with online sales since it is the birthplace of companies such as Mercado Libre and Decolar.com. With its introduction in the Argentine market, the startup aims to make the process of buying used vehicles safer.

“Buying used cars is very complicated due to fraud, a problem that has been exacerbated in Latin America. The purchase of a car, which is often the largest investment in a person’s life, needs to include all the necessary guarantees for consumers,” says Ottati.

Founded in 2018, Checkars has already completed over 1,500 vehicle transactions and generated US$8 million in revenue last year. During the novel coronavirus pandemic, which posed challenges to all market sectors, the startup increased six times its online vehicle sales.

Kavak has physical headquarters for connection with users, and conducts sales of used vehicles online after a rigorous assessment of over 240 points in the vehicles. The startup says that only one in three cars passes its quality check.

Kavak also operates in vehicle financing and offers a three-month warranty for all cars sold through its digital platform. Founded in 2016, the startup has already received investments from the Japanese SoftBank fund (of undisclosed value) in October 2019 and from Kaszek Ventures.

In Brazil, the Volanty startup, in the same market segment, has already received contributions from both Kaszek and SoftBank.

Despite being focused on the new Argentine operation, Kavak has its eye on the Brazilian market. “Brazil is a very important market, today we are focused on Mexico and Argentina operations. We have analyzed the Brazilian market since we started the business. We believe that our proposal will suit Brazilian consumers very nicely. We are still to decide on how and when we will come to Brazil. But, without a doubt, the country is among the priorities for our next steps,” said Ottati.

Future

For the future, Kavak has ambitious plans to become the world’s largest vehicle dealer. “We want to build an App in which everything related to the vehicle can be done: buy, sell, finance, pay fines, or schedule maintenance services.”

“The App needs to be good enough for everyone to use it, from my grandmother to the expert mechanic. We aim to build an ecosystem, and to do so we are investing heavily in technology and expansion. We are now entering Argentina, but we have an enormous desire to be present in all major cities in Latin America,” says the president of Kavak.

Source: Exame

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