Droom set to join unicorn club with latest funding round; plans IPO by 2022

Homegrown online automobile marketplace Droom today closed the first leg of its ongoing pre-IPO growth funding round of up to $200 million at a valuation of $1.2 billion, paving way for its entry in the country's unicorn club. India has seen around 17 firms enter the unicorn club this year.

Droom, which competes with Cars24, CarDekho, CarTrade and Spinny, in its first leg of pre-IPO funding round had both existing and new investors like 57 Stars and Seven Train Ventures. The company is also planning to go public by 2022 and aims to be listed either in India or on the US’s Nasdaq.

“Over the past seven 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 CEO, Droom.

The company's current annual run-rate is $1.7 billion for gross merchandise value (GMV) and $54 million for net revenue. Droom remains on track to touch a GMV of $2 billion and net revenue of more than $65 million in CY2021.

With the current scale, technology-oriented business, and operational efficiency, Droom is nearing profitability. “In a post-pandemic world, we expect automobile buying and selling to shift online rapidly,” added Aggarwal.

Droom has also reported increasing consumer preference for automobile ownership versus ride-sharing or public transportation. The company expects its online penetration for buying and selling automobiles to increase to 7 per cent in 2025, from the current 0.7 per cent.

Gene Pohren, Managing Director, 57 Stars, said: “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 revolutionize the automobile buying and selling experience," Pohren added. 

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