Droom, an online marketplace for automobiles, on Wednesday said it has closed the first leg of its ongoing funding round of up to USD 200 million (over Rs 1,487 crore), and it is pursuing a dual-track for a possible IPO in India or the US next year.
Speaking to PTI, Droom founder and CEO Sandeep Aggarwal said the company is raising up to USD 200 million in multiple tranches and has already raised a significant chunk of the amount.
While he did not comment on the amount raised in this tranche, he said the overall transaction would provide a post-money valuation of USD 1.4 billion.
‘In addition to participation by several existing investors, new investors including 57 Stars and Seven Train Ventures participated in the first closing of the round… We are pursuing a dual-track for a possible IPO and aim to be listed either on Nasdaq or in India in 2022,’ he added.
Aggarwal said the proceeds will be utilised to further penetrate in top 100 cities, last-mile delivery, and international expansion.
Droom, which competes with startups such as CarDekho, Cars24, Spinny and CarTrade, has previously raised about USD 125 million in funding from investors including Lightbox, Beenext, Digital Garage, Integrated Asset Management, Toyota Tsusho Corporation and others.
The company has a current annual run-rate is USD 1.7 bn in GMV (gross merchandise value), and USD 54 million for net revenue.
GMV is a term used in online retailing to indicate the gross merchandise value of the products sold through the marketplace over a certain period of time.
‘We are on track to touch a GMV of USD 2 billion and net revenue of over USD 65 million in CY2021. With the current scale, technology-oriented business, and operational efficiency, we are nearing profitability,’ Aggarwal said.
Droom has seen massive digital adoption during the pandemic besides increasing preference in consumers for ownership of automobiles versus public transportation or ride-sharing. The company expects online penetration for automobile buying and selling to increase to 7 per cent by 2025, up from 0.7 per cent currently.
“Over the past 7 years, we have developed the complete technology-based machinery starting from first-mile services such as OBV, ECO, and History to mid-mile services like loan and insurance and last-mile services like doorstep delivery. Droom has been on a steady growth trajectory after COVID,’ Aggarwal said.
While automobile is the largest retail category, it is the least penetrated online and in a post-pandemic world, automobile buying and selling is expected to shift online rapidly, he added.