RIO DE JANEIRO, BRAZIL – Founded in 2016 and backed by Japan’s SoftBank, Kavak became the first Mexican tech “unicorn” in October, when it reported a valuation of more than US$1 billion, making it the second most valuable startup in Latin America.
The Brazilian media spoke to several of the dismissed workers, who claim that their departure was due to the poor results of the firm’s business of buying and selling new and used cars.
It is estimated that 100 dismissals occurred in the company’s operations in Rio.
The layoffs at Kavak are also joined by the U.S. online used car sales firm Carvana, which laid off some 2,500 employees, 12% of its workforce, in May as it struggles to resolve its profitability following poor results.
KAVAK AND ITS EXPANSION
Mexico’s Kavak, which also operates in Argentina, began operations in Brazil’s financial capital, São Paulo, in July 2021.
The company expanded to Rio in January this year with plans to invest around US$103 million and have an inventory of 4,000 vehicles for sale in its first year.
Other Mexican unicorns include Konfio, a payment provider Clip, which has also received funding from SoftBank.
The latest to join the list of Mexican unicorns was logistics startup Nowports, announcing its valuation rose to US$1.1 billion following a funding round led by SoftBank’s Latin America Fund.