Used car marketplace Droom is looking to file the draft papers for INR 1,000 Cr (about $115 Mn) initial public offering (IPO) by June this year, sources told Inc42
The IPO offer will comprise a fresh issue as well as an offer for sale, with the fresh issue likely to be over 50% of the offer
Droom is eyeing a valuation of $1.2 Bn to $1.5 Bn for the IPO and has already finalised two middle market banks for the public issue
Used car marketplace Droom
The IPO offer will comprise a fresh issue as well as an offer for sale, with the fresh issue likely to be over 50% of the offer.
Droom is eyeing a valuation of $1.2 Bn to $1.5 Bn for the IPO and has already finalised two middle market banks for the public issue. Besides, it is in active discussions with one more investment banker, the sources added.
The unicorn is eyeing a listing on the exchanges by November this year.
It is pertinent to note that this will be Droom’s second attempt to go public. In late 2021, the startup filed its draft red herring prospectus (DRHP) with markets regulator SEBI to raise INR 3,000 Cr. However, it deferred its IPO plans due to market volatility.
One of the sources said that the primary reason behind the startup reducing its IPO size is that it doesn’t need much capital now as it is likely to achieve EBITDA profitability in the financial year 2025-26 (FY26).
Ahead of filing the draft papers, Droom is also looking to raise around INR 200 Cr (about $23 Mn) in a pre-IPO round from existing investors and new investors.
“They (Droom) are looking to increase Indian ownership in the company. They are looking to tap Indian family offices, HNIs, and ace Indian stock market investors for this round,” another source said.
This is similar to what Zepto did with its last fund raise of $350 Mn from Motilal Oswal, HNIs, and family offices to increase domestic shareholding.
Droom declined to comment on Inc42’s queries on IPO and pre-IPO funding round.
Founded in 2014 by Sandeep Aggarwal, Droom operates an ecommerce platform to connect used car dealers with customers. In early 2022, it ditched selling budget-friendly cars, which contributed 85% to its revenue, and moved to selling mid/premium and luxury cars to increase margin.
This has resulted in the startup’s margin on each car sale almost quadrupling to INR 1.6 Lakh from INR 40,000 earlier, the sources said, adding that Droom is on course to close FY25 with a revenue of INR 250 Cr.
Besides selling cars, Droom also has a car financing arm, a SaaS vertical, and advertising business.
Earlier this month, the startup also launched car rental services.
Droom has raised a total funding of about $300 Mn to date and counts Lightbox, 57 Stars and Seven Train Ventures, among others, as its backers.