Droom set to raise ₹1K cr via share sale
MUMBAI: Droom, a technology startup focussed on selling cars and bikes, has started work on its initial public offering (IPO), joining the many startups that are going public in India, said two people aware of the development.
Earlier this year in July, Droom raised the first tranche of its pre-IPO round, which valued the company at $1.2 billion. In addition to several existing investors, new investors, including 57 Stars and Seven Train Ventures, participated in the first closing of the round.
“They have recently picked up two domestic investment banks JM Financial and ICICI Securities to begin work on their IPO. The company plans to raise up to ₹1,000 crore through the IPO, which will be a mix of primary and secondary share sale. Some of the existing investors may pare some of their stakes through the IPO,” said the first person cited above, requesting anonymity.
The company is likely to file its draft IPO papers in the next couple of months, and the IPO could be launched in early 2022, he added.
An email sent to Droom did not elicit a response.
While the pandemic initially impacted sales of online platforms such as Droom, sales have seen a sharp uptick from the end of last year driven by growing need of personal mobility.
“Droom has witnessed a jump in used vehicle sales in H1 2021 due to a few factors which includes people preferring ownership rather than shared mobility, uncertainties in economic condition due to pandemic, and less depreciable value of used vehicle vs new vehicle. Most of the buying traffic on Droom came from Delhi, Hyderabad, Jaipur, Mumbai, especially for the petrol + manual variants,” said the second person cited above, also speaking on the condition of anonymity.
“Droom has built the entire ecosystem around used automobiles for the digital economy including first mile services such as Orange Book Value (used vehicle pricing engine), ECO (vehicle inspection), History (historical records for used vehicles), Discovery (dozens of prebuying research tools), mid mile such as Financial Services (Loan; Insurance) and last mile such as Droom Velocity for doorstep delivery,” he added.
In an interaction with Mint in July, Droom founder and CEO Sandeep Aggarwal said that the company’s annual run-rate is $1.7 billion for GMV and $54 million for net revenue.