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By Kylie Madry
MEXICO CITY (Reuters) – Used-car startup Kavak is refocusing its efforts on its home market, a major company said, following the company’s announcement that it would close its doors in Peru and Colombia.
“You have an expansion explosion, and then you mess up a lot of things, then you fix them and you’re in a position for some other expansion phase,” Jaime Macaya, Kavak’s director for South America, said at a panel hosted through Venture. Wollef Capital Fund on Wednesday night.
“So I think we’re now in that normalization phase,” he said, adding that the company will now concentrate “a little bit more on Mexico, which is our main market. “
Kavak broke records as the first Mexican startup to surpass a $1 billion valuation and operates in Latin America, as well as Spain and several countries in the Middle East.
But the company announced this month that it would “indefinitely suspend” its operations in Peru and Colombia early next year, laying out the macroeconomic outlook and for the coming months.
Kavak started sales in South American countries last year, making a million-dollar investment in the launch.
“We’re looking at ways to get other markets to profitability, and I think that will allow us to take advantage of the next three or four quarters,” Macaya said.
Kavak had warned last year of a “challenging 2023” in an internal email announcing spending cuts and layoffs.
(Reporting via Kylie Madry; editing by Janane Venkatraman)