Kavak Expands to EMEA With Turkey Launch

Mexican used-car platform Kavak is set to open its first office outside Latin America, the company announced Wednesday (July 7). Currently, the business operates in Mexico, Argentina and Brazil.

As Reuters reported, Kavak will be expanding its business into four new markets: Colombia, Chile, Peru and Turkey. The latter will be its first office in the Europe, Middle East and Africa (EMEA) region once it launches in Istanbul.

The global expansion will see the company invest $120 million in the new South American ventures while earmarking $60 million for its expansion to Europe, Chief Executive Officer Carlos Garcia said in the report.

“Turkey is a $120 billion market, so it’s a huge opportunity … They face similar problems that we face in Mexico and Brazil,” Garcia told the news outlet, referring to fraud and difficulty accessing financing in the used car market.

Since its launch in 2016, Kavak has become one of Latin America’s most valuable and fastest-growing startups. Currently, the business is valued at $8.7 billion after becoming the first Mexican startup to be valued at over $1 billion in 2020. The company’s investors include Sea, SoftBank, Peter Thiel’s Founders Fund, Tiger Global and others.

But rapid growth hasn’t come without its hurdles. Kavak cut an estimated 150 jobs from its Sao Paulo and Rio de Janeiro operations last month, less than a year after expanding to Brazil. Garcia told Reuters that this was a result of investing ahead of growth and needing to adjust to changing market conditions.

Now that it has an international presence spanning both sides of the Atlantic, Kavak may find Istanbul proves to be a strategic foothold. As a city that straddles Europe and the Middle East, it could act as a launch pad for further expansion in the EMEA region when the time comes.

As Hakan Gonca, founder and CEO of Turkish banking app Norma, told PYMNTS in an interview, Turkey’s close political alignment with the EU and a growing cohort of Turkish tech talent that are choosing to work in Europe are only increasing ties between the country and its European neighbors.

Read more: Turkish FinTechs See Growing Business Opportunities in Neighboring Europe