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Renowned Mexican firm that operates as an online marketplace for used cars, Kavak, has reportedly expanded its footprint to the UAE (United Arab Emirates), Saudi Arabia and Oman.
Carlos Garcia, the firm's chief executive, stated that this expansion will strengthen its presence in emerging-market countries.
As per sources, Kavak plans to invest around $130 million in three Middle East countries in the coming two years.
Notably, these countries are slated to represent 7-10% of its business, Garcia said.
For the unversed, the SoftBank-backed platform, currently valued at $8.7 billion, claims to be the most significant startup in Latin America.
The firm entered the UAE and Oman via a merger with a local company called Carzaty, and reportedly runs its operations in Saudi Arabia.
Garcia stated that the consumers of these markets are looking forward to purchasing luxury cars at lower prices, whilst claiming that used cars in excellent condition would be a great option.
According to Garcia, around 40% of transactions in the used-car market come out to be fraudulent; however, the algorithm of Kavak can help to offer safe sales and create a price structure for a new market.
It has been reported that the used-car market accounts for $35 billion-$40 billion in Gulf countries.
Kavak, which purchases used cars, fixes and resell them, has witnessed sturdy growth in the past six years and currently operates in 10 countries.
In July 2022, the firm announced investing $180 million to expand into Colombia, Chile, and Peru along with Turkey, its first venture outside Latin America.
Apparently, the firm faced some challenges in its journey when it cut 100+ jobs in June from its Brazilian offices and faced criticism regarding its customer services in Mexico.
It has been further revealed that Kavak will be focusing on its existing operations and is not having any additional expansion plans this year.
Source credit - https://www.usnews.com/news/technology/articles/2022-10-12/softbank-backed-tech-unicorn-kavak-expands-in-middle-east
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