In its first India investment, world’s largest automaker Toyota, through its subsidiary Toyota Tsusho Corp, has led a $30 million (~ Rs 203 crore) in Series D equity financing round of Droom, a Gurgaon-based online marketplace for used automobiles and auto services. The financing round was also co-led by Japanese incubator and venture capital investor Digital Garage, who is an existing investor in Droom.
Other investors who participated in the round include existing investors Ellison Investments along with several institutional investors and family offices from China, Hong Kong and South East Asia.
Notably, Droom has also signed a Memorandum of Understanding (MoU) with Toyota to expand its services overseas to markets such as Indonesia and Thailand.
Droom will utilize the freshly raised funds to boost its market share, which it claimed stands at 70%. It added that it tech-led platform will also invest heavily in further developing its artificial intelligence and machine learning capabilities.
Till date, Droom has raised about $95 million in equity financing and competes with the likes of Temasek and Warburg Pincus-backed CarTrade and Google Capital and Hillhouse Capital-backed CarDekho.
Founded in June 2014 by Sandeep Aggarwal, Droom claims to be India’s first and mobile first marketplace to buy and sell used and new automobiles. Prior to this funding, the startup last raised $20 million in its Series C round led by Integrated Asset Management and Digital Garage.
“Droom has seen tremendous growth over the past three and half years in terms of adoption by buyers and sellers, number of categories and listings, geographical presence and GMV of transactions. This partnership (with Toyota) will play a major role for Droom as we realize our growth potential, both in India and internationally,” said Sandeep Aggarwal, Founder & CEO, Droom.
The company claims to generate about $700 million in gross revenue and $15 million in net revenue. The platform has about 250,000 auto dealers across over 500 cities in India.
“We were impressed that Droom has rapidly established its leadership position as the largest online marketplace to buy and sell automobiles in India. We believe that this partnership contributes to the establishment of highly transparent transaction of automotive and the wholesome development of auto market of any developing countries, by combining Droom’s technologically advanced platform and our various automotive business experience of all over the world,” said a spokesperson for Toyota Tsusho Corporation.
The expansion will help Droom double its gross merchandise value to $1.4 billion by the end of 2018 and $3.5 billion by 2019. Droom is also targeting a public listing through an IPO by the end of 2019.
Source – ET Tech