Following its US$30m financing round back in May 2018, Droom, an Indian online automobile marketplace, is about to secure yet another US$30m via a Series E financing round.
This latest fundraising, bringing the company’s total financings to US$125 million to date, was led by Japanese investor Joe Hirao’s family office.
In addition to supporting Droom’s venture into Southeast Asia, the fresh funds will also be used to further develop Droom’s machine learning and artificial intelligence (AI) capabilities, and to invest in blockchain to function as a credit facilitator, as well as to invest in emerging technologies to build on its existing auto inspection and verification services for automobiles (ECO).
Founded in 2014, serial entrepreneur Sandeep Aggarwal – Droom’s CEO & founder – started India’s first online platform for automobiles. This is a great opportunity to use technology to solve the inefficiencies in India’s low-trust and highly fragmented car dealership market. The company leverages on data science, deep learning, and artificial intelligence to allow for quick and trustworthy transactions for automobile sales in India, Aggarwal believes that remaining geography, seller, product and price agnostic is the key that will enable business scalability.
India’s automobile market is the third largest globally and accounts for 12% of India’s GDP.
Droom claims to have achieved US$20m in net revenue and has shifted its IPO goal from end-2019 to 2020.
Takeaways
– The quick fundraising spree indicates growing competition in the space as it reflects the need to shore up financial support fast. Droom’s rivals include Sequoia Capital India-backed Cars24 and CarDekho, Temasek-backed CarTrade.
– This development also shows the general opportunity that online marketplaces have in emerging markets across many different verticals. Common characteristics that drive this phenomenon could be these economies do not have secure ecosystems in place, and tend to be very fragmented. Latest technologies now have the answer to solve the efficiency gap.
Editor: Ben Jiang