Online Auto Marketplace Droom Files DRHP For INR 3,000 Cr IPO

Online car marketplace platform Droom has filed its draft red herring prospectus to raise INR 3,000 Cr through the public market. The IPO offer includes, a fresh issue of shares worth upto INR 2,000 Cr and an offer for sale worth INR 1,000 Cr. 

Droom might consider raising a pre-IPO round worth INR 400 Cr after consulting with the BRLMs (Book running lead manager), the DRHP added. 

“Any amount raised pursuant to such a Pre-IPO Placement will be reduced from the amount of the Fresh Issue in accordance with applicable laws,” the DRHP read. 

Droom’s Singapore-based holding company Droom Pte. Ltd will be the only shareholder to offload shares in the IPO. 

The startup intends to utilise around INR 1,150 Cr for organic growth initiatives and around INR 400 Cr through funding inorganic growth initiatives. The company further highlighted that it will not utilise more than 25% of gross proceeds from the fresh issue for general corporate purposes. 

The Gurugram-based online startup narrowed its loss from INR 89.6 Mn in FY20 compared to INR 68.88 Cr, reporting a 23.2% drop. 

Interestingly, the startup’s total revenue dropped by 25% from INR 181.3 Cr in FY20 to INR 135.5 Cr in March end of this year. Droom’s total expenses show a slight drop from INR 270.8 Cr in FY20 to INR 204.3 Cr in FY21.

In the first quarter of FY22, Droom reported a loss of INR 32.5 Cr and posted a total income of INR 81 Cr. In the Q1 of FY22, it posted total expenses of INR 113.6 Cr. 

Founded in 2014 by Sandeep Agarwal, Droom provides an online platform where users can  buy & sell used and new automobiles in India and other emerging markets. Droom has four marketplace formats like  B2C, C2C, C2B, and B2B, and three pricing formats — fixed price, best offer and auction. Droom has more than 1.1 Mn automobiles to choose from with a listed inventory of $15.7 bn+ from over 20,000 auto dealers.

The startup has to date raised close to $330 Mn and Lightbox, BEENEXT, 57Stars, Joe Hirao, among others as its investors.

The startup entered the unicorn club in July this year after closing the first leg of its IPO growth funding round of $200 Mn. The investment helped Droom’s valuation soar to $1.2 Bn.

Droom competes against the likes of Cas24, newly listed CarsTrade, Ola Cars, soon-to-be unicorn Spinny, and CarDekho among others. It is worth noting that CarsTrade was among three other startups including Nykaa, and ixigo who were profitable and filed their DRHP.