Kavak's used-car bet: $8.7B to a $2.2B down round, then a $300M a16z Series F

Digital marketplace that buys, inspects, reconditions and resells used cars in Latin America and emerging markets, with in-house financing via Kuna Capital.

LatAm's informal used-car trade could be formalized at scale — buy, recondition and resell online across many countries, with financing as the profit engine.

Carlos García Ottati, Roger Laughlin and Loreanne García founded Kavak in Mexico City in 2016, betting that a transparent, tech-run marketplace could win a used-car market dominated by informal dealerships. It became Mexico's first unicorn in September 2020, and in late 2021 raised a US$700M Series E at a US$8.7B valuation — briefly Latin America's most valuable startup after Nubank. It expanded fast: Brazil with a US$500M investment, then Argentina, Colombia, Peru, Chile and Turkey.

Growth was expensive. Bloomberg reported US$86M in cash burned in Q1 2022 alone, including big football and racing sponsorships. As global interest rates rose, Kavak laid off staff and in 2023 paused its Colombian and Peruvian operations, halving headcount to about 4,300. In March 2025 it raised a US$127M round that cut its valuation 75% to US$2.2B — co-led by SoftBank and General Atlantic — and secured two US$200M credit lines from Goldman Sachs and HSBC to fund Kuna Capital, its lending arm.

The down round marked the turn. Kavak focused on Mexico (~60% of business), Kuna Capital financed nearly US$1B in loans, and the company ended 2025 with ~120,000 transactions (+40% year over year) and its first full month of consolidated profitability in December, led by Mexico. In February 2026 it raised a US$300M Series F led by a16z Growth (US$200M) — a16z's largest single-company investment in Latin America — with proceeds earmarked for financing capacity and fintech product development.

Kavak's marketplace was capital-intensive by design: holding inventory and lending against it exposed the company to interest rates, and the 2022 rate shock hit exactly when expansion was largest.

The 2021 US$8.7B valuation priced a nine-country growth story; when funding froze, the unprofitable markets were cut first, and the 2025 round repriced the company 75% lower.

Financing, not car resale, became the profitable core: Kuna Capital lent nearly US$1B using marketplace data, showing the durable bet was used-car lending with superior risk data.

Survival came from shrinking to Mexico, using inventory data to manage risk, and only then returning to growth — a sequence the 2026 a16z round validated.

Marketplaces that scale before unit economics are ready get repriced brutally when rates rise; Kavak recovered only after shrinking to core markets and making financing the real business.

As of September 2026, Kavak operates mainly in Mexico, Chile and GCC markets, with more than 5,000 marketplace partners and fintech growing near 100% year over year. The Series F proceeds are going into financing capacity, AI agents for customer demand, and product development, and founder Carlos García Ottati has said a possible IPO remains three to five years out.