Mexico’s second-hand car broker Kavak has become the country’s first tech unicorn, a lingo for a business whose valuation exceeds US$1 billion.
“We have now turned out to be Mexico’s first tech unicorn,” claimed the company’s Co-founder and CEO Carlos García Ottati in a talk with Reuters last week.
The Mexico City-based broker has so far raised more than US$400 million. Its valuation exceeded US$1 billion in the latest fundraising round led by Hong Kong’s DST Global and US-based Greenoaks Capital, in addition to Softbank.
Kavak, according to Reuters, has now merged with its Argentinean rival Checkars. The tech startup is now talking of hiring 500 people in Brazil and doubling its headcount in both Mexico and Argentina over the next year.
At the core of Kavak’s success is its business model, which combines both an online and offline sales model. Once a buyer finds interest in a car up for sale on the company’s website, he can visit the broker’s dealership centers, where vehicles are appraised and documented.
Kavak offers 15 months of warranty on the cars it sells and gives the buyer seven days for testing the vehicle. Such a model for car sales has been proved successful in the United States as well as several European countries.
While Kavak has not turned a profit yet, the company is confident of doing so over the next two years.