Used Car Marketplace drum (Droom) is going to start work again on its IPO plan. The company aims to re-file IPO draft papers in 2025. Earlier, Droom had filed its draft red herring prospectus (DRHP) with capital markets regulator Sebi in 2021. But then it put its listing plans on hold amid market volatility. After restructuring the business, Droom has seen its financial health improve.
Sandeep Aggarwal, Founder and CEO of Droom, said that the company is now ready to turn EBITDA positive in this calendar year. It is also on its way to achieving operational profitability. Agarwal told Moneycontrol, “There are still 3 months left for this fiscal to end, but Droom has already grown at about 70-90 percent on a year-on-year basis. The company will be EBITDA positive in 2025 and If everything goes well, we will also re-file our IPO papers this year.”
Efforts will also be made to raise fresh funding in the pre-IPO round.
The company will also try to raise fresh funding in a pre-IPO round this year before filing its DRHP. Droom last raised major funding in 2021. At that time it had raised $200 million from investors like 57 Stars and Seven Train Ventures. According to data from market intelligence platform Traxon, so far Droom has raised $341 million in funding in 9 rounds. Droom’s listing plans come at a time when the company has recorded significant improvement in its financial metrics.
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Droom was in loss of Rs 62 crore in FY23
Droom’s loss in FY 2023 reduced by 54 percent to Rs 62 crore. The loss in the previous financial year was Rs 137 crore. Revenue declined 32 percent to Rs 262 crore from Rs 390 crore in FY22. The company’s financial results for fiscal year 2024 have not been revealed yet. After restructuring the business, Agarwal claims that Droom has crossed Rs 4,000 crore in annual gross merchandise value (GMV) and Rs 200 crore in annual revenue in April-June 2024.
It now aims to end FY25 with a GMV of over Rs 5,000 crore and revenue of over Rs 250 crore. Agarwal expects that in FY26 and FY27, the company can easily grow at 50 per cent year-on-year.
The company is also adopting these methods for growth
Droom is now trying to take advantage of the rapidly growing trend of e-commerce to accelerate growth amid the ongoing wave of premiumization. Aggarwal asserts, “There is a wave of premiumisation going on. In both the new and used car markets, the demand for vehicles priced above Rs 10 lakh is growing faster than those priced below Rs 10 lakh.” And we are currently the largest player in the used car segment in India.”
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The company, like its rivals, has also diversified into offering ancillary services such as loans and insurance to boost revenues. Droom currently earns 3 percent commission on loans and up to 27 percent income on insurance premiums. Droom is also experimenting with the launch of new automobile categories. For example, the firm is now working with automobile original equipment manufacturers such as Audi, Hero Electric, Hyundai, Mahindra, Tata, Mercedes-Benz and Royal Enfield to sell new and used electric vehicles.
