Another day, another unicorn. Indian startups have been growing at an unprecedented rate over this year, giving birth to more unicorns then ever before. Every week or so, a new company attains this once rare status, attracting the attention of investors from around the globe, which are placing their trust in the country’s huge startup ecosystem. Today, a new name is joining the club, as Droom, an online marketplace to buy and sell used cars, has raised $200Mn in a pre IPO funding round at a massive valuation of $1.2Bn.
We say Pre IPO, because the company itself has come out and said that this funding will be used for growth leading up to its public listing. It is looking towards Nasdaq, or India, and has eyes set on next year for its entry into the public markets.
Now, coming back to the news at hand, Droom raised this money from 57 Stars, Seven Train Ventures and several existing investors.
“Over the past 7 years, we have invested millions of dollars and thousands of human hours to build a full technology-based end-to-end transactional marketplace for buying and selling of automobiles online,” said Sandeep Aggarwal, founder and chief executive of Droom, in a statement.
The company operates a platform for buying and selling used automobiles from different categories, and competes directly with the likes of Spinny, Cars24, CarDekho and several others. Much like all of its competitors, Droom provides verified listings for potential car buyers, making sure that customers can put their trust on the platform, especially when buying something as expensive as a car. It also provides the opportunity to set up meetings, negotiate pricing, and everything else that goes on in a transaction like this, right on its platform.
While there are a lot of players in this market, there’s still a huge potential, as most of India’s second hand automobile market remains unregulated. Backed by this, Droom has a current annual run-rate $1.7 billion for GMV and $54 million for net revenue. The company remains on track to touch a GMV of $2 billion and a net Revenue of $65 million in CY2021, according to a statement.
Moreover, it is also nearing profitability, which will be especially helpful during the IPO.
“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 & insurance and last-mile services like doorstep delivery. Droom has been on a steady growth trajectory after Covid. While automobile is the largest retail category, it is the least penetrated online. In a post-pandemic world, we expect automobile buying and selling to shift online rapidly.”
With Covid 19 subsiding at a great pace, the automobile market is sure to pick up pace, and thus, Droom’s new capital can help it gain an edge over the competition.