Droom expects next phase of growth will come from two-wheelers, services segment

Droom expects net revenue to increase by December 2017, owing to rise in sales of two-wheelers, and is planning to charge for some of its services that are free currently


Droom Technology Pvt. Ltd claims it has a 50% market share in online vehicle sales.
Droom Technology Pvt. Ltd claims it has a 50% market share in online vehicle sales.

New Delhi: Delhi-based Droom Technology Pvt. Ltd, which runs an online marketplace for pre-owned vehicles, expects the next phase of growth to come from two-wheelers and the services segment, founder and chief executive officer Sandeep Aggarwal said. The company is looking to achieve profitability by late 2017 or early 2018.

The start-up claims it has a 50% market share in online vehicle sales. It offers a range of used as well as new cars, motorcycles, scooters and cycles on its platform and provides car rental services and a host of other services around vehicle loans and insurance, roadside assistance and tools to determine the fair value of a pre-owned automobile.

Droom expects net revenue—which it counts as the total revenue earned from sales commission—to increase from the current Rs35 crore to Rs150 crore by next December. This is led by a rise in sales of two-wheelers over the last few months in non-metropolitan markets.

The company charges 2% commission on the sale price of a two-wheeler and 1.5% of a four-wheeler. Commission revenue from four-wheelers are about 70% of Droom’s annual revenue in terms of gross merchandise value (GMV).

“We are seeing a massive adoption of our offering across different cities and expect this momentum to continue,” said Aggarwal. Late last year, the company went on an acquisition spree, bringing sellers in tier-II and tier-III cities on to its platform. Droom claims it has over 200,000 sellers, both private and institutional, in as many as 416 cities.

“Proximity is a major influencing factor in a second-hand car deal. We have seen over 98% of all transactions happen in a 60-km radium,” said Aggarwal, adding consumers were warming up to its service in cities like Ludhiana, Chandigarh, Surat, Jaipur and Vijayawada.

Droom competes with online classified portals OLX and Quikr and discovery platforms such as CarDekho.com and Carwale.com.

Droom had said it will achieve an annualized GMV of Rs3,000 crore by March and Rs5,000 crore by December next year, according to a Mint report in September. It currently sells around Rs1,600 crore worth of vehicles in a year.

The company is also seeing higher adoption of services by users and is planning to charge for some of its free services going forward.

“For every 40 products sold, we sell about 10 services. We expect this to double up by March and further up by December,” said Aggarwal. The company plans to launch two more services in the near future: the first will provide a detailed history of used vehicles, including change in ownership and past accidents, and the second will help consumers get auto loans quick.

Started in 2014 by Aggarwal, who also founded e-commerce marketplace ShopClues, Droom has raised $45 million till date, of which about $25-35 million were raised from early-stage technology fund Beenext and Japan’s start-up investment and incubation firm Digital Garage in June this year.

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