Contxto – Used car platform Kavak announced it reached unicorn status yesterday (30). In an interview, the startup said it reached a US$1.15 billion valuation following an investment round it closed in September.
The startup didn’t share how much the invested totaled for, only that Greenoaks Capital led it. In terms of external funding the startup has snagged US$400 million divided among three rounds.
Though the company is not profitable yet, it hopes to reach that milestone “in a couple of years” as well as to go public.
Kavak platform mileage
Founded in 2016, the startup wants to change the used car business and it’s raised funds with investors like SoftBank, General Atlantic, and Kaszek Ventures.
It made headlines last August for its merger with Argentine Checkars. Likewise, the startup had been busy in recent months scaling within its native Mexico.
While Kavak already has a large team of 800 people, distributed between Argentina and Mexico, it expects to add on 500 more team members within a year. And with the fresh funding, the platform can now take on the market in Brazil.
So much scaling evidences that the Kavak is in a hurry to snag an unusual business opportunity within the new normal.
“From now and until the end of the year, we expect demand for pre-owned vehicles to be greater than what we would have had without Covid-19. Those who used to travel via public transport are now looking for a car, and pre-owned cars have become a good option,” says Loreanne García Ottati, CEO and co-Founder at Kavak.
Mexico startup unicorn
Some people consider KIO and Softtek to be Mexico’s first unicorns because, well, they are above the US$1B mark and they are in the tech industry. However, these companies do not fulfill some of the traditional “scaleup” criteria to be considered unicorns, such as economies of scale and fast growth. But we’ll leave that at your consideration.
This might explain why they don’t draw so much attention to themselves.
Either way, it’s good news for the ecosystem in Mexico. These developments showcase that there are tech companies whose projects are attractive to big-name investors.
The only thing that many of these mythical creatures are missing is profitability. Many faced this problem throughout the Covid-19 episode and the subsequent call for more “camels” in the world of startups.
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