By Cassandra Garrison
MEXICO CITY (Reuters) - Mexican used-car platform Kavak is investing $180 million to open offices and make its platform available in four new countries, including Turkey - its first location outside Latin America, the company said Wednesday.
Kavak, which calls itself the largest pre-owned car operation in the world, will enter Colombia, Chile and Peru with a planned investment of $120 million. The company has earmarked $60 million for its expansion to Istanbul, Turkey, Chief Executive Officer Carlos Garcia said.
"Turkey is a $120 billion market, so it's a huge opportunity," Garcia said in an interview with Reuters. "They face similar problems that we face in Mexico and Brazil," he added, referring to fraud in used-car sales and difficult access to financing.
The SoftBank-backed startup is valued at $8.7 billion, according to Garcia, and has experienced rapid growth in its native Mexico, which accounts for 60% of its operations. Kavak also operates in Argentina and Brazil.
That scale-up, however, hasn't come without speed bumps. 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, a result of investing ahead of growth and needing to adjust to changing market conditions, Garcia said.
Garcia added that Kavak is not currently expecting "massive layoffs."
The company has also faced highly-publicized social media complaints about its customer service in Mexico.
Garcia attributed some of that to backlogs created by pandemic shutdowns of government offices, delaying the necessary paperwork around used-car sales.
"We have a group of users that we definitely could serve better," Garcia said.
"What I like to ask my users is what happens if Kavak doesn't exist?" he added, citing the informality of the used-car market.