Online automobile marketplace Droom has closed the first leg of its pre-IPO (initial public offering) funding round of up to $200 million at a valuation of $1.2 billion, making it the latest entrant to the unicorn club. The company is looking to go public in 2022 and plans to get listed either in India or on Nasdaq.
The financial round was backed by new investors 57 Stars, Seven Train Ventures and a clutch of existing investors, the company said in a statement on Wednesday.
The fresh funds will be used to deepen its presence in the top 100 cities and fuel its international expansion. A portion of the capital will also be deployed to build on last-mile delivery. “Droom has been on a steady growth trajectory after Covid. While the 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,” said founder and CEO Sandeep Aggarwal.
The firm that claims to have as much as 80% share of automobile e-commerce said that it has seen increased digital adoption during the pandemic. Also, more consumers are opting for ownership of automobiles rather than public transportation or ride-sharing. The company estimates online penetration for automobile buying and selling to grow to 7% by 2025 from about 0.7% currently.
Droom, which competes with players like Spinny and Cars24 in the used car retailing space said that it is nearing profitability and remains on track to touch a GMV (gross merchandise value) of $2 billion and net revenue of over $65 million in CY2021. The company’s marketplace offers a choice of over 1.1 million automobiles and has a network of more than 20,000 automobile dealers. It has a presence in 1,105 cities.
“Globally we are seeing automobile buying and selling shifting online, for both ICE and electric vehicles. We think Sandeep and his team have built an impressive digital ecosystem that can revolutionise the automobile buying and selling experience,” said Gene Pohren, managing director at 57 Stars.