Droom - India's First Online Market Place for Automobiles!
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Today, we are not new to the concept of buying and selling automobiles online. But back then, it was a big deal. Yes, we are talking about the period before the emergence of Droom.
Droom was founded by Sandeep Aggarwal in 2014 after he left Shopclues. Based out of Gurugram, Droom is an online marketplace to buy and sell new and used automobiles.
With the sole vision of becoming a pioneer in this sector, Sandeep Aggarwal forayed into the startup ecosystem. Though he began quite late in this sector, at the age of 45 years, he could boast of having successfully built a startup that was worth over $1 bn.
Droom - Company Highlights
| Startup Name | Droom |
|---|---|
| Headquarter | Gurugram, India |
| Sector | Automotive eCommerce |
| Founders | Sandeep Aggarwal |
| Founded | 2014 |
| Parent Organization | Droom Technology Private Limited |
| Website | droom.in |
Droom - About and How Droom works
Droom - Target Market Size
Droom - Founder/Owner and Team
How was Droom Started?
Droom - Startup Launch
Droom - Business Model and Revenue Model
Droom - Competitors
Droom - Name, Tagline and Logo
Droom - Funding and Investors
Droom - Growth and Revenue
Droom - Products And Services
Droom - Mergers and Acquisitions
Droom - Partnership
Droom - Awards
Droom - Future Plans
Lakshya Singh
Droom - About and How Droom works
Droom is an AI and data science-driven online transactional platform, which offers 21st-century experience in buying and selling used and new automobiles in India and other emerging markets. The startup has built an entire ecosystem around used automobiles for the digital economy, including Orange Book Value (used vehicle pricing engine), Eco (1,000+ points vehicle inspection), History (history records for used vehicles), Discovery (dozens of pre-Buying & Selling tools) and Credit (India’s first and only marketplace for a used auto loan and dealer financing).
The Droom company caters to the individual buyers and sellers, dealers, and large enterprises not only for buying and selling but also for the entire life cycle management and all automobile ancillary services. It is an online platform that connects buyers and sellers of used cars, new vehicles, motorcycles, and even aircrafts. There’s a huge scope in India for the used vehicles, where there are four main issues that are noticeable:
- The condition of the vehicle
- Price factors
- Documentation
- Trust
And the most important issue is the trust factor between the dealing parties.
Droom - Target Market Size
As per the recent calculations, India’s automobile industry is worth over $225 Billion. Out of which, $60 Billion is comprised of the ancillary services such as warranty, insurance, and services. The remaining $160 Billion is primarily split between new vehicles and used automobiles.
With 80% market share of the automobile transactions online, Droom is India’s largest automobile platform online and the 4th largest E-Commerce company. Besides India, Droom is available in Singapore, Thailand and Malaysia and OBV is available in over 38 countries globally, making OBV world’s number one benchmark pricing engine.
Rishabh Rathi
Droom - Founder/Owner and Team
Sandeep Aggarwal is the founder and CEO of Droom.
Founder of Droom Sandeep Aggarwal is a serial entrepreneur, angel investor, internet visionary, and philanthropist. He is popularly known as the father of marketplaces in India. He has founded two marketplaces in India so far – ShopClues in 2011 and Droom in 2014.
Aggarwal’s entrepreneurial journey began with ShopClues, which he co-founded with his wife Radhika Aggarwal, and Sanjay Sethi in 2010. Post the insider trading allegations, to safeguard the reputation of ShopClues, Sandeep backed out of the company and went on to launch India’s first online platform for buying and selling automobile - Droom.
How was Droom Started?
Sandeep Aggarwal started Droom in 2014 with the vision to fix the problem of trust in the online used-car business. The platform initially started as an online marketplace for used cars in Delhi. Three months later, it was dealing in used cars and two-wheelers but still in New Delhi.
Exactly one year later, the company was dealing in used cars and two-wheelers across 100 cities of India. And post six months, Droom was all set to provide services like insurance, roadside assistance, warranty inspection to its consumer base. By the time 2018 came, it had automobiles across 48 categories including planes, bicycles, segways, golf carts, and yachts among others. In a short span of five years, they have come far by building the business one step at a time.
Rishabh Rathi
Droom - Startup Launch
Digital platform Droom gave its team a lot on its plate with its launch. With 85% of the business coming in from used automobiles, the team grasped that building trust was key to success. Hence as remedial measures, the team went on an extra mile and built not one but four different product modules to address the trust issues of the customers:
- The first product module is named Eco. It is an inspection tool that checks a vehicle on various 121 checkpoints before it is certified by the Droom technician.
- Orange Book Value is very similar to the Kelley Blue Book in the US. this module uses algorithms to find the fair price of a vehicle based on its make model, insurance, ownership, and condition.
- The next product module is where the company rates sellers so that buyers are more informed.
- And the last product module offers a thorough history of the vehicles, based on details from companies, insurance providers, and the police which is sectioned under “Droom history”. This has data of over 200 million vehicles from over 1,000 road transport offices in India.
Droom - Business Model and Revenue Model
The Droom business model has four formats i.e. B2C, C2C, C2B and B2B, and three pricing formats - Fixed Price, Best Offer and Auction. The platform offers a wide range of categories from bicycle to plane and all automobile services such as warranty, RSA, insurance and auto loan.
“We are a performance-based marketplace. We don’t charge any one-time payment; we only make money when the seller makes money”, says Droom Owner Sandeep Agarwal.
Droom, at majority makes money from commissions and subscriptions.
On the commission module, there are quite a few variations. The commission varies from 2% to 2.5% for used cars, and 2.5% to 3% for used motorcycles. When it comes to new automobiles, it is 1% to 1.25% or merely a flat booking fee.
15% of the Droom revenue comes from dealer subscriptions that range anywhere between ₹45,000 and INR 1,00,000. The company also provides comprehensive reports on a vehicle to buyers for up to INR 100. All in all, 92% of the used car business comes from B2C, 7% comes from C2C, and the rest comes from B2B.
Rishabh Rathi
Droom - Competitors
ZigWheels, CarDekho, and CarTrade are the major Droom competitors in the second-hand automobile segment when it started. But where it had a superior edge was that they developed a market, whereas the existing market players were only in the business of product discovery.
Droom - Name, Tagline and Logo
The tagline of the brand is "Droom - Tu bindaas ghoom"
The experience offered by Droom is encapsulated in the tagline of the ads, “Miley feeling nai wali” (Gives you the brand new feeling).
Droom - Funding and Investors
Droom is a Singapore Holding Company with subsidiaries in India and the United States. The company has so far raised close to $333 Million over 8 rounds 0f funding. The last funding round of the company came in on July 28, 2021, when it raised around $200 million from 57 Stars, Seven Train Ventures, and some other existing investors.
| Date | Stage | Amount | Investors |
|---|---|---|---|
| July 28, 2021 | Pre-IPO Round | $200 million | 57 Stars, Seven Train Ventures |
| June 20, 2019 | Series F | $10 million | - |
| October 4, 2018 | Series E | $30 million | Joe Hirao |
| May 17, 2018 | Series D | $30 million | Toyota Tsusho |
| July 5, 2017 | Series C | $20 million | Digital Garage, Integrated Asset Management |
| June 1, 2016 | Series B | $25 million | BEENEXT, Digital Garage |
| July 30, 2015 | Series A | $16 million | Lightbox |
| June 20, 2014 | Seed Round | $2 million | - |
Some of the prominent investors are Lightbox, Beenext, Beenos, Digital Garage, Toyota Tsusho Corporation, Joe Hirao and Integrated Assets Management.
Droom has filed its DRHP on November 12, 2021, according to which it is planning to raise close to Rs 3,000 crore through the public market. This IPO offer will be inclusive of an offer for sale worth Rs 1,000 crore and a fresh issue of shares worth up to Rs 2,000 crore.
Yash Gupta
Droom - Growth and Revenue
In the calendar year 2019, Droom generated $1.3 Billion in annualized GMV and $32 million in net revenue with a growth at a rate of 100% Y/Y.
“We feel this momentum will continue as the auto industry fares better. We hope to achieve $2 billion in GMV this year(2020) and $65 million in net revenue. By next year’s end(2021), we hope to hit $3 billion in GMV,” says Sandeep Aggarwal, Founder & CEO, Droom
Droom has presence in 1000+ cities across India (India’s largest hyper-local marketplace), and boasts of having over 350K auto dealers (largest auto dealer platform in World). Besides, Droom also claims of having:
- 35 Million+ monthly visitors
- Around 12 Million+ app downloads and
Furthermore, it has its subsidiaries in India and the United States. The company has so far raised close to $333 Million.
Droom has turned itself into a public limited company from a private limited company, as of August 2021. The company further converted the name of its Indian entity to Droom Technology Limited from Droom Technology Private Limited. The company has reportedly clocked an annual GMV run-rate of $1.7 billion and a net revenue run rate of $54 million. Furthermore, it has also disclosed its plans of touching a GMV of $2 billion and net revenue of $65 million by the end of the current calendar year.
Droom has posted a significant reduction in its losses at Rs 69 crore in FY21, which were posted at Rs 90 crore in FY20. The decline in the revenues of the company, which waned down 25% from Rs 181 crores in FY20 to Rs 136 crore in FY21, notably contributed to reducing the losses of Droom this year.
Financials
Despite a significant increase in operating revenue, Droom's net loss increased significantly in FY22, almost doubling to Rs 137 crore from Rs 68.8 crore in FY21. The main cause of this increase in losses was a sharp increase in overall spending, which increased by more than 2.5 times to Rs 527.1 crore in FY22 from Rs 204.3 crore in FY21. The company's financial performance was significantly impacted by the huge increase in expenditure, which was mostly driven by increased marketing expenses.
Droom - Products And Services
Droom Credit
On April 13, 2017, Droom launched Droom Credit, an end-to-end online and fully automated credit marketplace that offers unbeatable credit terms, a paperless process, fully automated work-flow management, and an auto loan marketplace for used cars. Loan approval can be obtained in 30 seconds through this platform.
Jumpstart
Droom has launched a unique service they named it as Jumpstart on May, 6, 2020 to assist automobiles that were left idle during the COVID-19 lockout in starting up again. Using the brand's Eco platform, this doorstep service solution provides technical assistance that can be called in to perform simple repairs on bikes and enable them get back on the road after the pandemic's months-long hiatus.
Cloud Services
Based on its own technology and software products with a data science foundation, Droom has introduced Droom Cloud Services on April, 18, 2023.
Droom - Mergers and Acquisitions
In November 2019, Droom acquired Xeraphin Finvest Pvt. Ltd. This acquisition was done with the vision to further strengthen the company's dedicated consumer base and dealer credit marketplace. To date, its credit operations have processed more than 10,000 loans in the last 12 months. Droom has credit and finance partners including IDFC First Bank, Yes Bank, Tata Capital, Manappuram Finance, Faircent, Hero Fincorp, Cashkumar, and Lendbox.
Droom - Partnership
Toyota
To penetrate the South East Asian market, Droom has partnered up with Toyota Tsusho Corporation, a division of the Toyota Group in 2018, a Japanese automaker. The company plans to expand internationally by utilizing Toyota's dealership network, inventory, and leadership. South East Asia will be the partnership's primary focus.
Turtlefin
In order to offer motor vehicle insurance services, the insurtech platform Turtlefin has teamed up with Droom Technologies on October, 13, 2022, an online marketplace for the purchasing and selling of new and used cars.
Droom - Awards
- DIGIXX Awards recognizes Founder & CEO, Sandeep Aggarwal as Person Of The Year.
- Founder & CEO, Sandeep Aggarwal has been awarded as the "Digital Entrepreneur of the Year" by Haryana Gaurav Awards
- Sandeep Aggarwal has been awarded as the "Business Leader of The Year" by World Federation of Marketing Professionals
- Droom won Silver and Bronze at exchange4media Primetime Award 2017 for Best Creative Advertising
- Awarded Silver and Bronze in Magzimise Awards 2017
- Awarded Bronze in the coveted Effie Awards 2018
Droom - Future Plans
At the moment Droom is one of the highly rated used car startups India and only aims to expand further. Droom is looking to replicate its success in the international market, given that it is now eyeing on being listed on Nasdaq or in India by 2022. And that is not where it ends, the company is also looking at a gross revenue of $3 Billion to $3.5 Billion and net revenue of $110-120 Million. With the signed MOU with Toyota, Droom will expand in Singapore, Indonesia, Malaysia, the Philippines, Vietnam, Thailand, Cambodia, Myanmar and Laos by 2020. The want to be known beyond Droom India.
Droom - FAQs
What is Droom?
Droom is an AI and data science-driven online transactional platform, which offers 21st-century experience in buying and selling used and new automobiles in India and other emerging markets.
How does Droom make money?
Droom at majority makes money from subscriptions and commissions.
- 15% of Droom’s revenue comes from dealer subscriptions that range anywhere between INR 45,000 and INR 1,00,000.
- The commission varies from 2% to 2.5% for used cars
- 2.5% to 3% for used motorcycles
- For new automobiles, it is 1% to 1.25% or merely a flat booking fee.
Who is the founder of Droom?
Sandeep Aggarwal is the founder and CEO of Droom.
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