With acquisition, Mexican Kavak lands within the United Arab Emirates
Startup buying and selling cars entered a market of more than US$ 35 billion annually and the highest average ticket
Kavak has just parked its fleet in Dubai. The second most valuable startup in Latin America, the Mexican used car buy and sell company made a $130 million investment to enter the Middle East, gaining traction in a much higher mid-ticket market.
“From the beginning, we talked about Kavak’s global ambition to be the number one player, transforming emerging markets”, said co-founder Roger Laughlin, who is also responsible for the startup’s business in Brazil – until now, the most important market for the company. company.
Kavak’s arrival in the Middle East has been on the cards since last year, when Kavak raised the latest round, raising $700 million in an E series that valued the Mexican unicorn at $8.5 billion, Laughlin recalled.
To debut in Dubai, Kavak opted for an M&A, a path similar to that adopted by the company in Argentina — in other countries, such as Brazil, the startup grew exclusively organically. In an undisclosed transaction, Kavak acquired Carzaty, a startup founded by Marwan Chaar and Hassan Jaffar.
Now part of Kavak, Carzaty was born in 2017 and has raised $5.5 million from investors including the venture capital arm of the sovereign wealth fund of Oman, the company’s home country. DriveCar, a Saudi Arabian car portal, and Middle Eastern families with businesses in the automotive market also invested in the startup, according to local media.
Last year, Carzaty also reportedly hit $1 million in monthly sales, with an average price of $25,000. Laughlin did not detail sales figures for the acquisition, but said the Middle East market handles two million used-car transactions a year, moving more than $35 billion annually.
“The average ticket is almost three times the ticket in Brazil,” said the Kavak co-founder. Here, the market moves from US$ 140 billion to US$ 160 billion, with more than 10 million used car transactions per year.
In an environment of scarcer capital, Laughlin indicates that Kavak is in a privileged situation, with large financial institutions renewing their bet on the business. Last month, the startup raised $810 million from HSBC, Goldman Sachs and Santander. The contracts include the purchase of receivables from the startup. “The fact of having managed to lift this round shows the confidence. When others see risks, we see opportunities”, he concluded.
Source: Value Pipeline