Online automobile marketplace Droom, which recently announced its $200 million pre-IPO round, has converted itself from a private limited company to a public limited company.
During its latest funding round, the Sandeep Aggarwal-led company also said that it is planning an IPO by 2022 and aims to be listed either on NASDAQ or in India.
According to the company’s regulatory filings, it has converted the name of its Indian entity from Droom Technology Private Limited to Droom Technology Limited.
Converting to a limited firm from a private limited company is usually quite easy once the threshold of 7 shareholders, 3 directors and a minimum of Rs 5 lakhs of equity capital is achieved in India. Companies generally convert into public limited in India when they get ready for stock exchange listing.
Significantly, Droom Technology has received all of the funds from its Singapore based parent Droom Pte, which controls 100% stake in the aforementioned Indian entity.
Droom’s story so far
Founded in 2014 by Aggarwal, who had co-founded e-commerce marketplace Shopclues, Droom 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.
Backed by the likes of Toyota and Lightbox, the company has raised over $125 million excluding the ongoing pre-IPO round.
The company recently claimed that it clocks an annual GMV run-rate of $1.7 billion and a net revenue run rate of $54 million. It further aims to touch a GMV of $2 billion and net revenue of $65 million by the end of the current calendar year.
Apart from the IPO plan, Droom had also claimed profitability in the past. However, the company’s parent entity is yet to file its annual financial statements for the past couple of years that can help us verify its claim.
Competition in used car retailing space and rise of unicorns
In the used car retailing space, Droom competes with CarDekho, Cars24, and Spinny. Meanwhile, ride-hailing company Ola is also making an entry in the segment with a new vertical called Ola Cars.
While Cars24 and Droom have already claimed unicorn status, CarDekho and Spinny are also likely to join the coveted club in their next financing rounds. Gurugram-based Spinny was valued at $800 million during its latest funding led by Tiger Global.
IPO frenzy continues in August
So far, the ongoing calendar year has been the most successful one for Indian startups. Where the ecosystem saw 25 startups turning into unicorns, around eight companies have gone for IPO. While Zomato and CarTrade are already listed on stock exchanges, Paytm, Nykaa, Ixigo, Policybazaar, MobiKwik and Tracxn filed their DRHP with SEBI and are waiting for the next step.
Ola has also revealed its plan to go for an IPO in the next year. However, the Bhavish Aggarwal-led company did not disclose the actual timeline for the public listing.
According to Entrackr’s sources, Ola is likely to file for IPO papers in the first quarter of 2022.
Entrackr has sent queries to Droom for more details. We’ll update the post in case they do.