Used-Car Startup Kavak Just Raised $300M — Here’s Why It Matters?

Key Takeaways

1. Kavak raised $300 million in a fresh equity round led by Andreessen Horowitz (a16z), which committed $200M — its first-ever Latin American investment via the a16z Growth fund.
2. WCM Investment Management co-led the round ($100M), with additional participation from Foxhaven Asset Management.
3. The company hit its first month of global profitability in December 2025, after 40% year-over-year transaction growth and an annualized lending pace of ~$600M through Kuna Capital.
4. The round values Kavak above its previous $2.2B valuation (set in a March 2025 down round), signaling a strong recovery from its $8.7B peak in 2021.

Quick Recap

On February 17, 2026, Mexico-based used car marketplace Kavak officially announced a $300 million equity funding round led by Andreessen Horowitz — a landmark deal that marks a16z’s debut investment in Latin America through its Growth fund. CEO and co-founder Carlos Garcia Ottati confirmed the news in an interview with Bloomberg and shared a company-wide memo on social media, noting Kavak had just achieved its first month of global profitability. The round also includes co-leads WCM Investment Management and Foxhaven Asset Management.

We just announced a $300M round led by Andreessen Horowitz.

We just reached our first month of global profitability and strong momentum across the business.

Still early. Still building. A lot more to do.

I shared a longer note with the team. Posting it below.…

— Carlos Julio Garcia Ottati (@carlosjgarciao) February 17, 2026

A16z’s First LatAm Bet Signals Renewed Confidence

Andreessen Horowitz’s $200 million anchor check is significant not just for Kavak, but for the entire Latin American tech ecosystem. This is the storied Silicon Valley firm’s first investment in the region through a16z Growth, underscoring its conviction that AI-driven business models can thrive in emerging markets.

Kavak’s appeal to a16z appears rooted in its practical deployment of AI across customer service, vehicle pricing, and credit risk assessment through its fintech arm, Kuna Capital. The financing division, buoyed by $400 million in debt facilities from Goldman Sachs and HSBC secured in early 2025, has already reached an annualized lending pace of approximately $600 million. Garcia Ottati described AI as a central pillar of Kavak’s operating model, and a16z saw the company as a real-world example of how AI can be effectively deployed.

The new round values Kavak above its $2.2 billion valuation from March 2025, when SoftBank and General Atlantic co-led a $127 million down round that marked an 75% decline from the 2021 peak of $8.7 billion. The upward re-rating suggests the market is rewarding Kavak’s pivot from hypergrowth-at-all-costs to disciplined, profitable operations.

LatAm’s Funding Rebound and the Road to IPO

The broader context makes this deal even more compelling. Latin American startups attracted approximately $6.2 billion in funding in 2025 — the highest level since 2022’s pandemic-era boom — according to PitchBook data. After a painful correction driven by rising U.S. interest rates in 2023–24, investor confidence in the region is visibly returning

Kavak itself underwent a dramatic restructuring over the past three years: it exited Colombia and Peru in 2023, cut headcount from ~8,000 to approximately 4,300 employees, and refocused on its core Mexican market, which now accounts for 60% of business. These moves, combined with 40% transaction growth and inventory turning 3.5x faster than the prior year, set the stage for the profitability milestone.

Garcia Ottati has previously stated that Kavak is preparing for a potential IPO within three to five years. With a16z’s imprimatur and renewed financial momentum, that timeline could accelerate.

Competitive Landscape and Comparison

Kavak operates in a global market for digitized used-car commerce projected to reach $25.4 billion by 2030. Its two most relevant peers at a similar stage are Cars24 (India-based, expanding globally) and Carsome (Southeast Asia’s largest integrated car platform).

Kavak leads in total capital raised and has the strongest VC backing with a16z, giving it a strategic edge in scaling AI-powered services across emerging markets. However, Cars24 is closest to an IPO, with stronger near-term revenue metrics and a more mature financial trajectory in India’s massive market. Carsome has achieved consistent quarterly EBITDA profitability ahead of both rivals, demonstrating that its Southeast Asian model is operationally the most efficient of the three.

Bayelsa Watch’s Takeaway

I think this is a big deal — not just for Kavak, but for the entire LatAm startup ecosystem that’s been under a cloud since the 2022 correction. In my experience covering funding rounds, the signal matters as much as the capital, and Andreessen Horowitz writing a $200M check into Mexico sends a very loud signal. This isn’t a sympathy round from existing investors propping up a portfolio company; it’s fresh conviction capital from a firm that has never invested in the region before.

That said, I’m cautiously bullish. Kavak’s journey from an $8.7B valuation to $2.2B and now back up is a rollercoaster that reflects real operational mistakes — the overexpansion into Colombia, Peru, and beyond was premature, and the brutal headcount cuts left scars. But hitting global profitability, even for a single month, after restructuring this aggressively? That’s a genuine inflection point. The Kuna Capital lending arm running at $600M in annualized loans is particularly interesting to me — it suggests Kavak is becoming as much a fintech play as a car marketplace.

I generally prefer to see sustained profitability (not just a flash month), and an IPO timeline of “3–5 years” tells me there’s still a long road ahead. But if you’re watching the LatAm tech space, this round is the most important signal of 2026 so far. Bullish with a watchful eye.