The used car buying and selling company Kavak, which is backed by Japan’s SoftBank, announced a new international landing: the Middle East.
According to the company of Mexican origin, which recently became one of the most important unicorns (companies worth more than a billion dollars) in Latin America, it said this Wednesday, October 12, that it will start operating in United Arab Emirates (UAE), Oman and Saudi Arabia.
The arrival in new emerging markets is one of Kavak’s expansion strategies in its idea of seeking greater scale and adding business volume,
As the director of Kavak told Reutersthe intention is to invest $130 million in those Middle Eastern countries, which the next two years will represent nearly 8% or 9% of the total business.
After Chile, Colombia and Peru, Kavak reaches the Middle East
The platform born in Mexico largely exceeded the 1,000 million valuation. With an estimated value of around 8.75 billion dollars, Kavak is one of the most valuable startups in Latin America.
The landing in the United Arab Emirates and Oman will take place from a merger with the local company Carzaty. And in Saudi Arabia, Kavak has come up with an operation of its own.
According to the brand, the idea is to target consumers in these three markets looking for luxury cars at lower prices as target customers. Thus, used cars in perfect condition would be a perfect alternative.
According to Garcia’s statements, more than 40 percent of transactions in the used car market end up in fraud in those countries, something that could be reduced with Kavak’s algorithm, which aims to guarantee safe sales and generate a price structure. in a market considered “virgin” for the director of the firm.
The information handled by Kavak is that the used car market in the Persian Gulf countries has an approximate value of 40 billion dollars annually.
growing pains
Kavak is the company behind the platform that buys used cars, repairs them and sells them. It has six years of life and operations in 10 countries.
Only two months ago it had announced an investment of $185 million to disembark with your business in three Latin American countries: Chile, Colombia and Peru.
also came to Turkeyhis first experience outside the region.
Kavak’s rapid growth is not all rosy. In June he announced the cut of a hundred jobs in Brazil and in Mexico he faces numerous criticisms, especially on social networks, related to customer service.
Regarding layoffs, García said that every year they do a “recalibration of the workforce” and in relation to satisfaction levels, he said that they have increased in Mexico and about 70 percent of users recommend Kavak after using their service. .
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