Info-tech

Online auto mart Droom looking to raise $50 m in 6 months

| Updated on: Dec 30, 2016
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Aims to be profitable latest by Feb 2018

Online automobiles marketplace Droom is looking at raising another $50 million over the next six months, in a bid to strengthen its technology play. The company plans to utilise the funds to expand its data science and analytics vertical.

Droom is also planning to use artificial intelligence (AI) to make it easier for users to find and compare the price of vehicles, thus making conversions faster on its site.

Acquisitions planned

Part of the funds will also be used to acquire start-ups working in the AI space too, said Sandeep Agarwal, founder and CEO of Droom.

The company, founded in 2014, has so far raised about $45 million from investors like Beenext (Singapore) and Japanese venture fund Digital Garage.

Agarwal, founder of e-commerce firm ShopClues, in which he is a major single shareholder, said that in a span of just two years Droom has been able to claim the position of the sixth largest online company as well as the largest marketplace for automobiles.

He claims that Droom has been able to beat competitors CarTrade and CarDekho in the automobile space, in terms of revenues and also the number of transactions. Agarwal told BusinessLine that the company is looking to clock a GMV (gross merchandise value) of ₹5,000 crore by the end of next year.

Its current GMV is ₹1,600 crore, of which ₹35 crore is the actual revenue of the company. Droom, which has all kind of vehicles from two-wheelers to helicopters listed on its website, has three revenue streams-automobile services, advertising, and auto-dealer/subscription model. “All the three segments (revenue) are doing well for us. This year, we expect the automobile services (10 per cent of the total revenue) and subscription model (15 per cent of revenue), to grow faster.

“I can see the subscription model to be at 30-35 per cent of the total earnings. It was at 5 per cent last year,” Agarwal said, adding there are about 82,000 dealers on its site, of which about 12,000 are active users and pay about ₹15,000 per year as subscription.

C2C on the cards

The company, which so far had focussed on B2B business and B2C, is also looking to expand its services in the C2C space, where consumers can sell their vehicles directly to another. Players like Olx and Quikr already provide this service.

“Our competitors are either discovery or listing platforms, but we are the first transaction-based company and we are building data science and analytics to our advantage,” Agarwal said. Talking about future services, Agarwal said the company would be using data science to improve its services.

For example, it has launched ‘Droom History’, a feature from which any person can get data about a vehicle’s background, right from its make to whether the vehicle has ever met with an accident, to information related to vehicle’s insurance, loan history, theft history among others.

Droom claims to have over 83,000 B2C sellers; 25,000 products; 3,21,000 listings on its site; and ₹6,555 crore in listed gross merchandise value (GMV).

The company plans to become profitable latest by February 2018. It claims to have enabled 55,000 transactions so far.

In addition, the company is planning to come out with a quarterly report on the automobile industry and plans to sell the data to industry players and consumers, so that people can expedite their purchases and also get “genuine” as well as “accurate” reviews for a particular vehicle.

Published on January 16, 2018

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