Hardeep Singh
Introduction to Droom
Droom, an online automobile marketplace, has filed a draughts red herring prospectus (DRHP) for its 3,000-crore rupee initial public offering (IPO) (IPO). Toyota Tsusho, Digital Garage, Lightbox, Ellison Investments, SevenTrainVentures, and other investors have invested in the Gurugram-based company, which was valued at $1.2 billion three months ago.
Droom offers a 21st-century e-commerce experience for automobiles. Droom is India’s biggest collection of automobiles — both old and new, cars and 2-wheelers, as well as other vehicles — with over 2.9 lac vehicles online in 1,100 locations. Droom offers India’s greatest online car-buying experience, with unrivalled trust, selection, low costs, and convenience. Every vehicle offered by Droom is subjected to a detailed 1,100-point evaluation and certification procedure for condition, pricing, and history.
Droom’s automobiles are less expensive than other choices accessible to consumers since it invests in technology and AI rather than actual stores and hundreds of personnel. Users may use their mobile applications or websites to search for automobiles or define buying criteria, book vehicles, acquire financing and insurance, and have the vehicle delivered to their door. Buyers may return the car before paying in full, and each vehicle comes with a six-month guarantee (up to Rs. 50 lacs).
Individual sellers may use Droom to sell their used automobiles to their extensive network of over 20,000 dealers for the best price and quickest turnaround, all while being at home. Droom also works with well-known OEM and EV manufacturers to provide automobile purchasers with the broadest selection of new vehicles, as well as documentation, financing, and insurance, as well as delivery to their doorstep. Droom has sold over 400K vehicles and provided products and services to over 1.5 million satisfied consumers since its start, making it the industry leader in the automotive e-commerce market.
Droom and its competitors in the market
Dream is the second open-to-the-public automotive marketplace. Meanwhile, Cars24, the highest-rated player in the domain, has transitioned to a public limited company, a procedure that companies go through before becoming public. Crunchbase, a corporate data platform, claims to have raised $1 million in funding thus far. A unicorn in the startup sector is a company valued more than a billion dollars.
Despite the fact that it has no activities in the US, the business said in July 2021 that it is seeking for exploration prospects in both India and the US.
Droom may have sought an IPO in India because to the success of Zomato, Nykaa, and EaseMyTrip’s IPOMs in India, even if raising cash in dollars would have offered more funds to spend in rupee terms.CarTrade went public on August 20th, and since then, its stock has lost 17%.
The IPO funds will support Dream’s organic and inorganic growth initiatives, which usually include acquisitions and investments in other firms.
Future planning and expansion
Droom plans to raise 2,000 crores through a new issue and 1,000 crores through a sale of existing securities. The seven-year-old firm has yet to reveal who of its investors will sell equity in the upcoming IPO.
The drafting red herring prospectus (DRHP) for Droom’s 3,000 crore initial public offering (IPO) has been submitted (IPO). The Gurugram-based business, which was valued at $ 1.2 billion three months ago, has received funding from Toyota Tsusho, Digital Garage, Lightbox, Ellison Investments, SevenTrainVentures, and other investors.
Dream wants to raise 2,000 crores through a fresh issuance and 1,000 crore through an offer for sale. The seven-year-old company has yet to reveal who of its investors would participate in the impending IPO.
Droom is the second automobile marketplace to make its services publicly available. Meanwhile, Cars24, the most valued player in the domain, has transformed to a public limited company, a usual practise for companies before going public.
Droom, which was founded in 2014 by Sandeep Aggarwal, who previously built India’s fourth unicorn ShopClues, has received $333 million to far, according to the business research website Crunchbase. In the startup world, a unicorn is a firm worth more than a billion dollars.
Sandeep Aggarwal, the founder of Droom, and his family office have invested over Rs 25 crore in 18 enterprises and want to sponsor 10-12 startups per year to support the country’s growing startup ecosystem.
Conclusion
The proceeds from the IPO will be used to fund Droom’s organic and inorganic growth strategies, which frequently include acquisitions and investments in other businesses.Despite the fact that it has no business in the US, the company said in July 2021 that it is seeking for listing opportunities in both India and the US.Even while raising funds in dollars would have left more money to spend in rupee terms, the success of Zomato, Nykaa, and EaseMyTrip’s initial public offerings (IPOs) in India may have prompted Droom to seek an IPO in India.
