Online automobiles marketplace, Droom plans to invest around USD 5-10 million for at least three acquisitions during 2017 in order to strengthen the technology platform, according to a top executive of the company.
“We may acquire 2-3 companies and have allocated between USD 5-10 million for the same. We will not acquire any company for geographical expansion but look for say like someone with a pricing engine, a data science startup or one which has good talent that we can absorb,” Sandeep Aggarwal, founder and chief executive officer, Droom told.
Founded in 2014, Droom has so far raised USD 45 million. The last round was raised in June from Singapore-based early stage technology fund Beenext and Japan’s startup investment and incubation firm Digital Garage. The amount was not disclosed.
The valuation of the company then, stood at USD 225 million, according to Aggarwal. He also said that the company is seeing a lot of inbound interest and may raise a next round in the first half of 2017. Droom on December 22 launched ‘Droom History’ – a feature from where any person can get data about a vehicle’s background.
The government too has a website — Vahan, which tells users about vehicle registration status. However, Aggarwal claimed that Droom collects vehicle information from 18-21 unique data fields unlike Vahan which gives customer only 5-6 data points. It plans to take it to 42 data points by March.
Droom History provides customers information on the vehicle’s insurance history, accident insurance claim history, flood damage history, loan history, theft history, service logs history, registration details etc. Currently, this product is free of cost.
It offers information over 19 crore private and commercial vehicles such as two-wheelers, cars, taxi, trucks etc. in its database. During the first phase of the launch, the company will put up listings with valid RC numbers on its platform. The front-end will also be soon opened to users, giving them access to the most accurate, real-time information about used vehicles.
According to Aggarwal, unlike US and Western Europe, India is a low trust market, especially for used automobiles. Many aspects of a pre-owned vehicle, such as ownership history, title dispute, and vehicle-related issues, are non-reliable. He said that almost 80 percent of used cars sold have tempered odometer (the meter that records the distance travelled by a vehicle) in India.
Droom claims to have over 83,000 B2C sellers, 25,000 products, 3,21,000 listings and Rs 6,555 crore in listed gross merchandise value (GMV). The company plans to become profitable latest by February 2018. It claims to have enabled 55,000 transactions so far worth Rs 1,250 crore.
Talking about demonetisation, Aggarwal said, “It has created a temporary disruption in the market. What we saw is the necessity based purchase, for example Honda Activa, Bajaj Pulsar or TVS Scooty, Maruti Suzuki, WagonR or Swift Dzire, there was a flat to minus 2 percent impact (on transactions) but all the luxury cars like Mercedes, Audi, BMW completely came down. We saw almost 50 percent decline on that,” he said.
Droom international expansion plans have been delayed. It now plans to launch services in Indonesia by April which will be followed by Malaysia, Thailand and Philippines shortly. Aggarwal did not share month on month transaction numbers but said it was reporting 20-15 percent growth. It plans to hit a GMV of USD 600-650 million by December 2017.
Source: MoneyControl
