Is Kavak the Next Carvana or Vroom in LatAm?

Kavak, the first Mexican unicorn, is now valued at $8.7B after raising $700M from Tiger Global Management and Softbank in September. It effectively doubled its valuation for the second time in 2021.

Since Kavak faces little competition in Latin America, we thought of comparing its valuation to its American counterparts. While Kavak has so far thrived during its private funding rounds, Carvana and Vroom have recently struggled in the US public market.

Since its IPO at $22 per share in June 2020, Vroom’s stock soared to a maximum closing price of $73.87 before diving to its most recent close of $7.60. It lost more than 90% of its value after disappointing earnings and reporting issues with its sales operations and inventory management. The leading used car reselling platform in the US, Carvana has been on a similar path, losing around 60% of its value since its peak valuation of $65.7B last August.

The online used car market has plenty of challenges and tough competition in the US. However, Kavak has a lot of room to grow by entering other countries in the region — it entered Brazil and Argentina in early 2021.