In the Middle East, a region brimming with both opportunities and challenges, a quiet revolution is brewing in the used car industry. Kavak, one of Latin America's highest-valued unicorns, is making a bold entry into Gulf Cooperation Council (GCC) countries with a $130 million investment, initially targeting the United Arab Emirates and Oman while eyeing expansion into Saudi Arabia.
Kavak: From Latin America to Global Dominance
Founded in 2016 by Carlos Garcia Ottati in Mexico, Kavak has rapidly emerged as a leader in the used car industry through its innovative technology-driven platform. With a current valuation of $8.7 billion, the company operates across major Latin American markets including Mexico, Brazil, and Argentina. Its global expansion began in July 2022 with entry into Turkey, and now spans over ten countries.
The company recently secured $810 million in financing through agreements with HSBC, Goldman Sachs, and Santander Bank to support its ambitious growth plans, demonstrating strong market confidence in its business model.
Strategic Partnership with Carzaty
Kavak has chosen an efficient market entry strategy by merging with Carzaty, a leading local used car platform founded in late 2018 by former McKinsey consultant Hassan Jaffar Al Lawati and Harvard Business School alumnus Marwan Chaar. Carzaty had previously raised approximately $5.5 million in equity financing, including investment from IDO Investments, the venture capital arm of Oman's sovereign wealth fund.
This merger combines Kavak's global expertise with Carzaty's local market knowledge, accelerating Kavak's Middle Eastern expansion while addressing regional market inefficiencies.
Building GCC's Largest Used Car Operation
Kavak aims to establish the region's largest used car business by applying its proven Latin American operational model enhanced by local market understanding. The company transforms traditional used car transactions through rigorous quality control, comprehensive vehicle inspections, refurbishment processes, warranty offerings, and after-sales services - all supported by technological innovation that increases efficiency and reduces costs.
Substantial Infrastructure Investment
Kavak is establishing a 15,000-square-meter refurbishment center in Dubai that will employ 150 professional mechanics and staff, with capacity to process 1,300 vehicles monthly. The company has also set up a 17,000-square-meter customer center at Dubai Festival City to provide redefined retail experiences and end-to-end transaction services.
Additional plans include a 15,000-square-meter operations and customer center in Riyadh, signaling Kavak's serious commitment to the regional market.
Local Leadership for Market Success
Kavak has appointed Carzaty's founders as co-CEOs of Kavak GCC. Marwan Chaar emphasized: "Kavak's model brings unprecedented consistency and reliability to used car purchases, including two-year warranties that give customers complete peace of mind. The GCC presents tremendous opportunity to deliver transparent, high-quality user experiences."
Co-CEO Hassan Jaffar Al-Lawati added: "Our data-driven approach at Carzaty perfectly addressed local market needs. With Omani government investment, we built strong foundations in Oman and expanded to the UAE. Now with Kavak, we're combining our local expertise with their global playbook to scale across the GCC."
CEO's Vision for the Region
Kavak Global CEO Carlos Garcia Ottati stated: "The GCC represents enormous untapped potential for Kavak. Our $130 million investment over two years will deliver unparalleled customer experiences while creating significant employment opportunities. With Marwan and Hassan's local insights, we're positioned to build meaningful, lasting operations at scale."
Kavak's Middle Eastern expansion marks a strategic milestone in its globalization while representing a confident bet on the region's used car market potential. Through its innovative model, technological capabilities, and localized approach, Kavak appears well-positioned to transform GCC's used car industry while elevating consumer experiences.