Kavak, which aims to revolutionize buying and selling used cars online in Mexico, will merge with Checkars in Argentina. Kavak is also eyeing the Brazilian market, Checkars said.

The SoftBank-backed marketplace will invest $10 million in Checkars to expand into the Argentinian market. Kavak plans to hire 300 new employees in Argentina and set up a tech hub, Checkars said.

For used-car buyers, Kavak handles all paperwork and inspections, and promises to deliver the vehicle to the buyer’s home.

It also offers insurance, financing, a seven-day or 300-kilometer (184-mile) test-drive, and a three-month guarantee.

For sellers, Kavak promises to make an offer within a minute, handles inspections, and guarantees a sale within 30 days. If a sale isn’t completed, Kavak pays the seller the amount it initially offered for the car.

Checkars also sells inspected cars and buys used vehicles. For buyers, it handles all steps of the transaction, end-to-end, from inspection, to the three-month guarantee and the delivery.

Regional player

With the merger, Kavak positions itself as a regional automotive marketplace.

Kavak saw auto sales decline 28% in April, year-over-year. However, just like other marketplaces, sales returned to pre-Covid levels. Kavak doesn’t disclose its revenue figures. The company didn’t immediately respond to a request for comment.

Checkars sold 1,500 vehicles in 2019, which totaled $8 million U.S., but it’s not clear if that figure represents actual revenue.

Unlike traditional classified sites, companies like Kavak own their inventory and need physical space to expand.

Kavak didn’t disclose specific plans for Brazil, but according to media reports, the company is eyeing the Brazilian automotive market.

In Brazil, the leading automotive verticals include WebMotors, ICarros and OLX-Brazil. WebMotors is owned by Santander bank (70%) and CarSales (30%), while ICarros is owned by Itau bank.

Kavak-like sites in Brazil include InstaCarro.com, Carupi and CarFlix.

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