Automotive startup Droom has raised a fresh round of funding taking its valuation to $1.2 billion as it targets an initial public offering (IPO) by 2022.
Without disclosing the amount raised, the company said it has closed the first leg of its ongoing pre-IPO growth funding round of up to $200 million from 57 Stars and Seven Train Ventures besides existing investors.
The online automobile marketplace is pursuing a dual track for a possible IPO, and aims to be listed either on NASDAQ or in India.
This makes it another NCR-based startup, after Zomato, Paytm and Policybazzar, that is going for an IPO.
Droom’s current annual run-rate is $1.7 billion for gross merchandise value and $54 million for net revenue. The company remains on track to touch a GMV of $2 billion and a net revenue of $65 million in calendar year 2021.
It claims to have seen massive 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 percent in 2025 from 0.7 percent currently.
"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, mid-mile services like loan and 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.
“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," said Gene Pohren, Managing Director, 57 Stars.