Companies

Droom raises first tranche of $200 m pre-IPO round at $1.2 billion valuation

Our Bureau Bengaluru | Updated on July 28, 2021

Funds will be utilised to further penetrate top 100 cities, last mile delivery and international expansion

Droom, the AI-driven online automobile marketplace, raised the first tranche of its ongoing $200-million pre-IPO round, valuing it at $1.2 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 in Q2 of CY21. The company is pursuing a dual-track for an IPO and aims to be listed either on NASDAQ or in India in 2022.

At a current annual run-rate of $1.7 billion in GMV and $54 million in net revenue, Droom is on track to touch a GMV of $2 billion and net revenue of $65 million in CY21. With its current scale, technology-oriented business, and operational efficiency Droom is nearing profitability.

“This is the first time we have raised money from new US-based investors. Many of our existing investors also invested in this first tranche and many of them have been with us since the company was valued at less than $200 million. We started planning for our IPO early this year along with our $200 million fund raise round. This is an open round which will close by the year end. We have raised the first tranche of this round at a pre-money valuation of $1.2 billion, however, I cannot disclose how much we have raised” Sandeep Aggarwal, Founder and CEO, Droom, told BusinessLine. He said, the funds raised will be utilised to further penetrate the top 100 cities, last mile delivery and international expansion.

Aggarwal alone owns one-third stake in Droom while employees hold 7-8 per cent stake which together is roughly 40 per cent, and 60 per cent is held by external investors. Two hundred of Droom’s 300 employees hold $100 million worth of equity in the company. Droom has raised $125 million to date (excluding this first tranche) along with an undisclosed round in the midst of the pandemic in October 2020 at a $1 billion valuation.

“We have developed the complete technology-based machinery starting from first-mile services such as OBV (used vehicle pricing engine) ECO (vehicle inspection), and History (records for used vehicles) 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 and we have 80 per cent market share. We expect online penetration for automobile buying and selling to increase to 7 per cent in 2025 up from 0.7 per cent currently” said Aggarwal.

Droom has over 1.1 million automobiles to choose from, with a listed inventory of over $15.7 billion from over 20,600 auto dealers and a presence in 1,105 cities. Droom has over 6.5 million Facebook followers, making it one of the largest auto-focused community in India.

Published on July 28, 2021

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