Droid Financing: Droom Automotive Market Secures $ 1.2 Billion Pre-IPO Financing

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Bombay: Droom received the first installment of its $ 200 million pre-IPO funding round at a valuation of $ 1.2 billion, making the online auto market the latest entrant into the coveted unicorn club.

Existing and new investors, such as 57 Stars and Seven Train Ventures, participated in the fundraiser, a senior company official said on Wednesday. Although Droom has not disclosed the amount of the first tranche, he expects to close the first round of $ 200 million in the current quarter.

Droom – who is the 17th Indian unicorn so far this year – competes with CarDekho, Cars24, Spinny and CarTrade in the used car retail space. The company will use the funds to increase its presence in the top 100 Indian and international cities and increase its last mile delivery service.

The company is looking to be listed on the NASDAQ or Indian stock exchanges in 2022.

ETtech

(Graphic: Rahul Awasthi / ETtech)

“The timing and amount of fundraising through the initial public offering will depend on our ability to meet performance milestones and market conditions,” said Droom founder Sandeep Aggarwal. “The way the Indian market has changed over the past year, we are now thinking about the dual track to see whether we should register in the domestic market or overseas. ”

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Aggarwal co-founded the e-commerce marketplace Shopclues with his now estranged wife Radhika in 2011. It was one of the first Indian startups to be valued at over $ 1 billion.

In 2014, he launched Droom, which is now backed by investors such as Beenos, Lightbox, Beenext, Digital Garage, Integrated Asset Management, Toyota Tsusho Corp. and the office of Joe Hirao (founder of ZigExn). Aggarwal, along with the ESOP holders, own around 40% of the company’s capital, with the remainder held by investors.

The Singapore-based company is on track to hit a gross merchandise value of $ 2 billion and net sales of $ 65 million in 2021. The company is close to profitability, he said.

Pandemic-induced growth

Droom said he saw massive digital adoption during the Covid-19 pandemic as people chose personal mobility over public transport to reduce the risk of contagion. The company expects online auto offerings to reach 7% of the overall market by 2025, up from 0.7% currently.

“Although the automobile is the largest retail category, it is the least penetrated online. In a post-pandemic world, we expect the buying and selling of automobiles to evolve rapidly online, ”Aggarwal said.

“Globally, we are seeing the buying and selling of automobiles move online, for both ICE vehicles and electric vehicles,” said Gene Pohren, managing director of the US 57 Stars fund.

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