Online automobile marketplace Droom has made the first close of its ongoing pre-IPO round of up to $200 million. The round saw the participation of 57 Stars and Seven Train Ventures along with existing backers.
While the company did not disclose the name of existing investors participating in this round, the Singapore-registered company counts Lightbox, Beenext, Digital Garage, Toyota Tsusho Corporation among others as its existing backers.
The proceeds will be utilized for expansion in India and global markets along with beefing up last-mile delivery, said Droom in a press release. The company also said that it is planning an IPO by 2022 and aims to be listed either on NASDAQ or in India. This isn’t the first time Droom has mentioned its IPO plans.
The seven-year-old company facilitates used cars transactions on its platform. After finalising the deal, buyers are required to deposit 3 to 5% of the total value as a booking amount. It also provides automobile services such as warranty, RSA, insurance and loan.
Droom further claims that it clocks GMV/annual run-rate of $1.7 billion and net revenue run rate of $54 million and aims to touch a GMV of $2 billion and net revenue of $65 million by the end of the current calendar year.
While Droom has claimed to be nearing profitability, it’s a claim it has been making since much earlier in fact, right since 2017. As it turns out, the firm has not filed its annual financial statements for the past four fiscal years (2017 onwards) for its Singapore based holding entity. Entrackr research has verified this independently.
In the used car retailing space, Droom competes with the likes of CarDekho, Cars24, and Spinny. It’s worth mentioning that ride-hailing company Ola is also making an entry in the segment with a new vertical called Ola Cars.
According to Entrackr’s sources, Ola is all set to come with a full-stack model where it will buy cars from people and the company’s driver-partners and sell them to buyers after refurbishing.
Of late, investors have been pouring money into the used car space. After Cars24, Droom has become the second company to enter the unicorn club from the segment. Cars24, which entered the unicorn club last year, is also in talks with Yuri Milner’s DST Global and other investors to raise around $250 million at a $2 billion valuation.
Meanwhile, CarDekho is evaluating a $150 million round to enter into the coveted club of unicorns. Gurugram-based Spinny had recently closed a $108 million round led by Tiger Global at over $800 million valuation.
Update: The story has been updated with additional inputs.