99 Startups Monthly Newsletter - May 2025
Kavak’s $127M Down Round: What It Means for LATAM VC
Mexico-based used-car platform, Kavak, just raised a $127M USD round on April 2025, but at a sharply reduced $2.2B USD valuation, down from its peak of $8.7B USD in 2021. The round, announced in April 2025, was co-led by SoftBank and General Atlantic.
The raise also includes $400M USD in debt from Goldman Sachs and HSBC, aimed at expanding Kuna Capital, Kavak’s vehicle financing arm.
A Snapshot of the LATAM Exit Climate
Kavak’s valuation reset comes at a time when exit activity across LATAM continues to fall short of investor expectations. Despite growing startup maturity and record venture funding in previous years, 2024 exit volumes remain stagnant. According to the Latin America Venture Capital Report 2025 (Cuantico VC):
Only 79 VC-backed exits occurred in 2024, the lowest in recent years.
IPO windows remain effectively closed, pushing many investors to rely on secondary sales or M&A for liquidity.
Fintech still dominates the exit pipeline, but most startups are holding off on public listings amid market uncertainty.
In this environment, large-scale down rounds like Kavak’s are no longer outliers, they’re a sign of how much private valuations are correcting to align with the new capital markets’ reality.
Refocusing for Resilience
Once being considered a hypergrowth startup in Latin America, Kavak has spent the past 18 months shifting gears toward operational discipline. The company:
Exited from Colombia and Peru in 2023.
Cut its workforce by 50%, bringing it down to 4,300 employees.
Now generates 60% of its revenue from the Mexican market.
This strategic refocus mirrors a wider shift in the region’s venture landscape: away from rapid expansion at any cost, and toward leaner operations, profitability, and long-term sustainability.
What This Means for LATAM VC
Kavak’s round, paired with a sluggish exit market, underlines three key shifts in Venture Capital across LATAM:
Valuation discipline is back: inflated unicorn rounds are being repriced or reflecting their real value.
Liquidity is scarce: with IPOs sidelined, investors are demanding stronger fundamentals before committing more capital.
Profitability is the new growth: especially for later-stage startups that must now prove long-term viability.
Final Take
Kavak's $127M USD round at a slashed valuation isn’t a failure, it’s a recalibration. For founders and investors alike, it’s a reminder that Venture Capital in LATAM is entering its next phase: one focused on sustainable, profitable growth, realistic exits, and durable value creation.
Portfolio Companies
News about our Portfolio Companies
Pix wins over Argentinians, and this startup now processes over $150M USD.
Soyio raised $1M USD, with participation from Platanus, Devlabs, 99startups, and led by Consorcio’s Chilean CVC.
Portfolio companies currently raising investment rounds
Medu: They manufacture sustainable personal protective clothing with the necessary technology to be reused, replacing hundreds of disposable suits and allowing up to 50 washing cycles without losing safety properties. Currently raising a $2M USD round.
Ximple: They are transforming financial access in Latin America by empowering resellers with working capital, digital tools, and new income opportunities. Currently raising their seed round.
Supervisor AI: A platform to convert every business conversation generated into growth opportunities and actionable insights. Currently raising a $750k USD investment round.
Please don’t hesitate to contact us in case you are interested in connecting with any of these amazing companies.
Great companies we have recently reviewed:
Nextminder: They are creating “Synthetic Humans” that deliver validated consumer insights in hours instead of weeks at a fraction of the cost.
Zeppex: B2B platform for accepting payments with stablecoins and cryptocurrencies.
Recommendations of the month:
The Mountain Is You: Transforming Self-Sabotage Into Self-Mastery - Brianna Wiest: This book explores why we self-sabotage, how internal conflicts drive it, and how to break the cycle through emotional intelligence and inner healing. By doing deep internal work, we can stop resisting change and fully step into our potential.
David Clark: Lessons from 32 years of fund investing - why exits will be larger | The 20 Minute VC
Private equity exits fall to 2-year low in Q1 2025 - Dylan Thomas and Neel Hiteshbhai Bharucha.