Droom Becomes Unicorn; Closes First Round Of Pre-IPO $200-Million Fund Raise Target The automobile marketplace startup, now valued $1.2 billion, is preparing for an IPO and aims to be listed either on NASDAQ or in India by 2022
By S Shanthi
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Online automobile marketplace Droom joined India's Unicorn club after raising a part of its $200-million pre-IPO funding round target. While the company did not disclose the amount raised, it is now valued at around $1.2 billion after the current round.
57 Stars and Seven Train Ventures participated in the first closing of the round with participation by several existing investors. The company expects online penetration for automobile buying and selling to increase to 7 per cent in 2025, up from 0.7 per cent currently. The latest entrant to the Unicorn club is preparing for a possible IPO and also aims to be listed either on NASDAQ or in India by 2022.
"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. 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 and insurance and last-mile services like doorstep delivery," said Sandeep Aggarwal, founder and CEO, Droom, in a statement.
He also added that Droom has been on a steady growth trajectory after COVID. "While the 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," Aggarwal said.
Droom is an AI-driven automobile marketplace founded in 2014. It has a database of 1.1 million automobiles on its platform amounting to an inventory of $15.7 billion from over 20,600 auto dealers in 1,105 cities. Droom's current annual run-rate is $1.7 billion for GMV and $54 million for net revenue. The company also claims that it is on track to touch a GMV of $2 bn and a net revenue of $65 million-plus in CY2021. With the current scale, technology-oriented business, and operational efficiency Droom is nearing profitability, it said in a statement.
It's Raining Unicorns
India produced 15 unicorns in the first six months of 2021 compared with 11 unicorns in 2020. The total unicorn tally has now crossed 50.
"Over the last decade, there was a rise of unicorns across the globe. Currently, the pace is picking up and is likely to continue for the next 10 years. The US alone produced 132 unicorns in 2021! Clearly, unique ideas, or sometimes, outrageous ones are attracting capital at scale. There is an appetite for risk capital, and nowhere does it look that the unicorn party for Indian startups is stopping any time soon," said Abhishek Agarwal, founder and managing partner, Rockstud Capital.
CRED, ShareChat, Groww, Gupshup, PharmEasy, Meesho, Moglix, Zeta and BrowserStack are some of this year's additions to the Unicorn club. According to Nasscom-Zinnov report, last year, the Indian tech startup base witnessed a steady growth at a scale of 8-10 per cent year-on-year with more than 1,600 tech startups and a record number of 12 additional unicorns—the highest ever in a single calendar year.
Nasscom had forecast that India would have 50 unicorns before the end of 2021. However, India's startup ecosystem has already crossed that number with Droom being the latest feather in the cap.
