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Mumbai: Droom, an online automobile marketplace, has closed the first leg of its pre-IPO growth funding round of up to $200 million at a valuation of $1.2 billion, it said on Wednesday.

In addition to participation by several existing investors, new investors including 57 Stars and Seven Train Ventures participated in the first closing of the round, the company said in a statement. The company also said that it is pursuing a dual-track for a possible IPO and aims to be listed either on Nasdaq or in India in 2022.

“Droom’s current annual run-rate is $1.7 billion for GMV and $54 million for Net Revenue. The company remains on track to touch a GMV of $2 billion and a Net Revenue of $65 mn+ in CY2021. With the current scale, technology-oriented business, and operational efficiency Droom is nearing profitability," the statement said.

The company said that it has seen strong growth in digital adoption during the pandemic besides increasing preference in consumers for ownership of automobiles versus public transportation or ride-sharing. The company expects online penetration for automobile buying and selling to increase to 7% in 2025, up from 0.7% currently.

“Over the past 7 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. We have developed the complete technology-based machinery starting from first-mile services such as OBV, ECO, and History to mid-mile services like loan & insurance and last-mile services like doorstep delivery. Droom has been on a steady growth trajectory after Covid. While automobile is the largest retail category, it is the least penetrated online. In a post-pandemic world, we expect automobile buying and selling to shift online rapidly," said Sandeep Aggarwal, founder and CEO, Droom.

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."

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