Used car company Kavak secures $810 million in funding

By Anthony Harup

MEXICO CITY — Used car company Kavak has secured $810 million in funding from global banks that it will use to bolster its business in Latin America.

The transactions include a $675 million deal with HSBC Holdings PLC under which the bank will buy the rights to recover used car loans made by Kavak, and $100 million credit lines from Goldman Sachs Group. Inc. and $35 million from Banco Santander SA.

“These resources will be used to develop Kavak’s business model and to strengthen its inventory, in order to continue its consolidation in the Latin American market,” Kavak said.

The company said half of its customers use financing to acquire cars and about 40% are first-time buyers.

Mexico City-based Kavak, founded in 2016, buys, refurbishes and sells used cars over the internet or at the company’s physical locations. Its business model reduces the risk of people being scammed when buying or selling their vehicles. The company said that in Latin America, 40% of used car transactions involve some kind of irregularity.

Kavak has operations in Mexico, Argentina, Brazil, Chile, Colombia and Peru, and recently began operating in Turkey.

Write to Anthony Harrup at [email protected]

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