Droom raises $30 million to boost credit, certification services
Droom plans to utilize the capital to boost its credit services to buyers and dealers, inspection and certification services
New Delhi: Online automobile marketplace Droom has raised $30 million in a Series E round led by the family office of Japanese investor Joe Hirao.
Another Japan-based family office also participated in the round. Droom declined to name the investor.
Hirao, founder of ZIGExN, has backed several real estate and automobile ventures.
According to Sandeep Agarwal, co-founder and chief executive officer of Droom, Hirao is in talks with 20 Indian ventures and may invest in some of them.
In May, Droom had raised $30 million from Toyota Tsusho Corp., a unit of Japan’s automobile major Toyota Group, and Digital Garage. Founded in 2014, Gurugram-based Droom has so far raised $125 million. It plans to go public by 2020.
It plans to utilize the money to boost its credit services, besides its inspection and certification services.
It is also looking to invest aggressively in developing its machine learning and artificial-intelligence capabilities.
“The current Series E funding gives an immense fillip to us as we aim to simultaneously strengthen and diversify our services such as inspection, C2C and C2B marketplace formats, enable smooth online transaction and provide more competitive terms and interest rates to customers through Droom credit,” said Agarwal.
The start-up is targeting loan disbursements worth ₹150 crore in FY19 through its credit offering.
Droom’s platform serves as an online marketplace to buy and sell cars and two-wheelers. It also offers services such as fair value calculator, roadside assistance and auto loans.
The company is backed by Ellison Investments, an Asia-based investment manager; Hong Kong-based Integrated Asset Management Asia Ltd and several independent investors from China and Hong Kong.
It also counts Lightbox, Beenext, Beenos and Digital Garage as existing investors.
Droom said that it will liquidate employees stock options (ESOPS) worth ₹50 crore before Diwali this year.
“We will be allowing employees who have stayed for more than three years to liquidate their ESOPs. We thought it would be a good way to reward our people,” said Sandeep Agarwal.
Droom has also been eyeing international markets for long and will be operational in Thailand and Malaysia by the end of this year.
The company has allocated $8 million for expanding its footprint in overseas markets.
In India, Droom has forged a partnership with Swiggy to supply two-wheelers to its delivery fleet. Droom also has tie-ups with Ubermoto and over 20 other manufacturers, including Triumph and Hero Cycles.
According to Agarwal, the domestic online automobile transaction market is about $1 billion and is expected to grow to $20 billion in the next two years.
Droom, which competes with the likes of Cars24 and Carwale, claims to have a 75% share in the online automobile transaction market.
Droom was launched in 2014 by Sandeep Aggarwal, a co-founder of e-commerce firm ShopClues. The firm is registered in Singapore as Droom Pte. Ltd.
“Droom has done a fabulous job in creating India’s largest and 21st century online automobile transactional platform by leading the journey of reinventing pre-owned automobile transactions. The way they have created robust technology-based ecosystem services tools to address the fragmented and unorganized used automobile market, loan and insurance, and multiple marketplace formats such as B2B, C2C, C2B and C2C is very innovative and we are very happy to be a part of this great journey,” said Hirao.
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