KAVAK CLOSES LARGEST SEED ROUND IN LATIN AMERICA
Kavak, a Mountain Nazca portfolio company, raised three million USD in a seed stage financing round with Mountain Nazca as leading investor. The Mexican startup provides an online platform to buy and sell second-hand cars and will use the funds raised for developing new technologies, strengthening their team and increasing the catalog of cars to be sold.
Kavak was founded in 2016 by Carlos García and Roger Laughlin. “At Kavak, we have the task to create a transparent, practical and secure online experience for all our users” explains García, CEO of the startup. “We decided to eliminate costs for showrooms and sales to make sure our clients save money and receive the best possible offer” specifies COO Laughlin.
Kavak started its operations in October 2016 with 19 employees. After one month of operations, the startup has already realized 100 car evaluations and sold five cars. “Our plan is to focus on execution and operation, we aim to double the size of our catalog and our sales month per month”, says García.
According to Statista, one of the leading statistics companies on the internet, 42% of Mexicans buy or rent a second-hand car. The market potential was evaluated to be more than 50 billion USD. However, buying a second-hand car comes with many risks, including receiving the wrong documents or receiving a car which is in worse shape than promised. Kavak has therefore developed a 240-point inspection checklist, executed by industry specialists, which second-hand cars have to meet before they are listed on the online platform. According to García, only one out of three cars inspected receives Kavak’s certificate.
Héctor Sepúlveda, managing partner of Mountain Nazca, names the three relevant factors for the investment decision: the leadership qualities and decision making of the team, the business model as well as the size and fragmentation of the market, where the biggest player owns approximately 1% of the market share.