Mexico’s Kavak is now the second-most valuable startup in Latin America

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Mexican used-car platform Kavak said it has more than doubled its valuation to $8.7 billion based on its latest funding round, making it the second-most valuable startup in Latin America as it eyes further expansion beyond its home market.

Kavak’s chief executive, Carlos Garcia, told Reuters the Mexico City-based firm netted $700 million in its Series E round, making the platform second only to Brazilian fintech Nubank among the highest-valued startups in the region.

The injection of capital has delivered a boost to Kavak’s plans to expand outside the region as a one-stop shop for browsing, purchasing and financing pre-owned cars via an app.

Kavak said funding was led by U.S. venture capital firm General Catalyst, while SoftBank Group Corp, billionaire Peter Thiel’s Founders Fund, Singapore-based gaming and e-commerce company Sea Ltd, Tiger Global, Spruce House, hedge fund D1 and Ribbit Capital also participated.

The new funding round is the latest sign of an aggressive push into Latin America’s startup scene by Japan’s SoftBank, which last week launched https://www.reuters.com/business/softbank-renews-bet-latin-america-with-3-bln-fund-2021-09-14 a $3 billion fund to invest in the region’s technology companies.

Kavak, la empresa de Compra y Venta de Autos Seminuevos en Mexico. 2020

Founded nearly five years ago in Mexico, Kavak expanded to Argentina in 2020, before landing in Brazil this year, which it described as its largest market.

The company will most likely focus next on expanding to emerging markets beyond Latin America, CEO Garcia told Reuters, noting that announcements could come within six months.

“We’re looking outside the region for our next step,” he said in an interview. “We want to go into the biggest, most broken market where we can really make a dent, where we can really make users’ lives better, so we’re not agnostic to Latin America.”