NEW DELHI: Online marketplace for used automobiles and auto services Droom has closed a Rs 200 crore funding round, a transaction that comes at a time when mid-to-late stage funding in India continues to be under severe stress.
The Series B round of equity financing has been led by Singapore-based investor Beenext , founded by former Beenos founder and chief executive Teruhide Sato , and Japanese incubator and venture capital firm Digital Garage
While Sandeep Aggarwal , chief executive of Droom, declined to confirm the valuation of the Singapore-headquartered company, post the latest round, the deal is believed to have valued Droom at between $210 million and $240 million, according to sources with direct knowledge of the transaction.
Also, entering the company’s investor cap table is Hong Kong-based investment company, Integrated Asset Management, which, in 2014, led the buyout of media conglomerate Forbes Group , according to the sources mentioned above.
Other investors in the round include a group of prominent Japanese and Indonesian family offices.
“Droom has swiftly established its leadership position as the premium digital marketplace to buy and sell automobiles in India. Sandeep is an exceptional founder and his vision, grip on marketplaces and ability to drive innovations are second to none,” said Teruhide Sato, managing partner, Beenext.
This follows the Rs 100 crore raised by the company from venture capital firm Lightbox and Beenos in July 2015, and which was first reported by ET. The existing backers have also participated in the latest round, which closed earlier this month.
“We will be using the proceeds to expand outside Indian borders, particularly in South-east Asia, invest further in our technology, and ramp up our engineering teams,” Aggarwal, who had also founded online marketplace ShopClues , told ET.
“The single biggest problem anyone faces when buying an used vehicle in India is the lack of transparency in the transaction – in everything from pricing to the vehicle’s condition. Droom is the only company in India solving for this problem. And it’s one of the few companies in the world solving for it purely through technology. That’s the vision Lightbox backed in the beginning and it’s so exciting to see how quickly the model has been validated,” said Sid Talwar , partner at Lightbox.
The transaction also comes at a time when mid and growth-stage venture capital investors have significantly tightened their purse strings, as they force their portfolio companies to cut down their burn rates, trim their flab, and renew their focus on bottom-lines.
According to data collated by VCCEdge, the first quarter of the current calendar year has seen an 80% fall in venture capital funding in value terms, compared to the year ago period. Additionally, exit valuations have plunged to 15-quarter low, and deal values have fallen by 70% from $1.7 billion in Q1CY15 to $508 million in the same period.
The company, according to Aggarwal, which claims to have 47,000 B2C sellers on board, and 55,000 listings, is targeting gross merchandise sales of $10 billion by 2020. It’s annualised GMV at the end of April was at $160 million, according to the founder.
Source: Economic Times