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Kavak makes buying used cars “cool”

Kavak buys, reconditions and sells used cars online. Its integrated car marketplace service includes motor inspections, payment processing, buying guidance, and other related solutions. It also offers its own financing through its fintech arm, Kavak Capital.

The use of data and AI technology allows Kavak to streamline the car buying and selling process, reduce the time required for reconditioning and shorten the evaluation process required for offering different financing options. Eliminating third parties and offering guarantees helps eradicate risks to some extent. The entire set up makes Kavak look like a competitor in big tech rather than in the vehicle sector and is intended to show that everything can be done digitally.

Kavak’s strategy of launching in new countries is based on testing a market and then building inventory, while also gaining market share in terms of traffic. Within the last two years, the company expanded outside Mexico, to Argentina, Brazil and Turkey. In 2022, it quietly entered the markets of Colombia, Chile and Peru.

Kavak’s business model seems to be working well and the startup has quickly established itself as a leader in Latin America’s pre-owned cars market. Over the last couple of years the company has grown exponentially to meet strong demand. It has been doubling its revenue every three to five months and over the years, it has served hundreds of thousands of customers. It has also attracted big investors, including General Catalyst, SoftBank, and Tiger Global, to name a few, doubling its valuation twice in 2021.

Looking ahead, Kavak plans to use its newly gained capital to expand across Latin America and beyond, into more emerging markets globally. With its move into Turkey in 2021, it already initiated a smooth entry into the Asian and European markets. The company also wants to continue hiring, particularly engineers and product managers and plans to double down on product development.