Kavak, the Mexican unicorn startup that buys and sells used cars, last year became the private — unlisted — company with the highest valuation in Latin America. At that time, the company had a market capitalization of $8,700 million, and now it has just announced a new series of financial agreements with HSBC, Goldman Sachs and Santander for another $810 million.
The company, which was founded in 2016, has been operating in Argentina since 2020 and has an online catalog of more than 1,800 cars, 6 commercial offices, a 17,000 m² refurbishment plant in Tigre and about 1,000 employees.
Unicorn Agreements in Latin America has awarded $675 million in financing from HSBC, through a portfolio sale framework contract, with Kavak ceding collection rights in connection with the financing it gives its customers to purchase used cars. In addition, the company received a $100 million credit line from Goldman Sachs, and another $35 million from Santander, resources that will be used in developing its business model and growing its inventory, to continue its growth.
“In a challenging international context, where access to financing has become more complex for the startup ecosystem, these types of agreements only confirm the robustness of our business model. We are revolutionizing the used car market in Latin America, providing security, agility and transparency, in an industry that has never been Innovating for decades, these types of funding lines help us deepen change.”Tell Infobae Moises FloresKavak’s Chief Financial Officer.
Today in Latin America, 90% of used car transactions are between individuals. In general, it is usually a very stressful moment, with various risks and distrust involved in making transactions of high economic value with strangers. That is why it is a huge opportunity for us to offer a completely innovative experience that, on the one hand, eliminates the mechanical and documentary fraud that usually occurs in this type of operation, and also provides financing, mechanical guarantees and after-sales services that are unique in the market. Doing all this on a large scale and simultaneously processing and transporting thousands of cars on two continents is a challenge that requires a lot of strength and continuous investment in infrastructure, equipment and systems,” the company financier explained.
In addition to Mexico and Argentina, Kavak has a regional presence in Brazil, Chile, Colombia and Peru, and recently opened its first operations outside the region in Turkey. Its investors include Softbank, General Atlantic and Green Oaks, which have disbursed more than $1.6 billion in five funding rounds. Now they have added HSBC, Goldman Sachs and Santander.
Kavak also offers financing and has noticed that many of its clients are receiving credit for the first time in their lives. “This tool is a clear differentiator, and shows that 40% of Kavak’s operations are people who buy their first car; evidence of the company’s ability to provide financial access and mobility,” the company said.
“In countries like the United States, 7 out of 10 citizens own a car, unlike Latin America, where only 1.5 out of 10 residents have been able to buy a car. This is the reality we want to change, and we will not rest until we become a real agent of change that solves problems. mobility for thousands of citizens,” Flores noted.