By June, Droom will Submit the Draft Documents for the INR 1,000 Cr IPO

According to a media report, used automobile marketplace Droom plans to submit the draft documents for its INR 1,000 Cr (about $115 Mn) IPO by June of this year. Both a fresh issue and an offer for sale will be included in the IPO offer; the fresh issue will probably make up more than half of the offer. Droom has already selected two middle-market banks for the public offering and is aiming for an IPO valuation of between $1.2 billion and $1.5 billion. According to the report, it is also actively negotiating with another investment banker.

By November of this year, the unicorn hopes to be listed on the exchanges. The fact that this will be Droom's second effort to go public should be noted. To finance INR 3,000 Cr, the firm submitted its draft red herring prospectus (DRHP) to market watchdog SEBI in late 2021. However, because of the market's volatility, it postponed its intentions for an IPO. The startup's main motivation for lowering the size of its initial public offering (IPO) is that it doesn't require a lot of funding at this time because it is anticipated to attain EBITDA profitability in the fiscal year 2025–2026 (FY26).

Droom Eyes for INR 200Cr as Pre-IPO Round

Droom also hopes to raise about INR 200 Cr (about $23 Mn) from both new and current investors in a pre-IPO transaction prior to filing the draft papers. "Droom wants to see more Indians control a larger share of the business. For this round, they want to reach out to Indian family offices, high-net-worth individuals, and top Indian stock market investors, according to a different source. In order to enhance domestic shareholding, Zepto raised $350 million from Motilal Oswal, HNIs, and family offices in a similar manner.

Sandeep Aggarwal founded Droom in 2014, and it runs an online marketplace that links buyers and used car dealers. Early in 2022, it stopped selling low-cost vehicles, which accounted for 85% of company sales, and switched to offering luxury and mid- to high-end vehicles in order to boost its profit margin. This move has caused the startup's margin on each auto sale to nearly quadruple from INR 40,000 to INR 1.6 lakh. Droom is expected to end FY25 with INR 250 Cr in sales.

Other Services Provided by Droom

In addition to selling automobiles, Droom also operates an advertising agency, a SaaS vertical, and a vehicle financing division. The firm also started offering car rentals earlier this month. To date, Droom has raised around $300 million in fundraising, with Lightbox, 57 Stars, and Seven Train Ventures among its supporters.

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StartupTalkyNitin Konde