Online automobile marketplace Droom Technology has achieved the unicorn tag as global investors double down on their bets in the Indian startup ecosystem. On Wednesday, the company said it has raised $200 million (about Rs 1,486 crore) in a pre-IPO funding round at a valuation of $1.2 billion.
The funds were raised from new investors including 57 Stars and Seven Train Ventures as well as existing investors, Droom said in a statement.
The company is looking to list either on Nasdaq or in the domestic market next year.
The fresh investment comes amid the rise in demand for used vehicles. Sandeep Aggarwal, founder and CEO, Droom, said that the company expects automobile buying and selling to shift online rapidly in a post pandemic world.
Online penetration for automobile buying and selling is expected to rise to 7% in 2025, up from 0.7% at present, according to the company.
Aggarwal, who also co-founded e-commerce portal ShopClues, set up Droom in 2014.
Droom’s current annual run-rate is $1.7 billion for gross merchandise value (GMV) and $54 million for net revenue. It remains on track to touch a GMV of $2 billion and a net revenue of over $65 million in 2021, it said. The company is also nearing profitability, it added.
Gene Pohren, managing director, 57 Stars, said globally it is seeing automobile buying and selling shifting online.
"We think Sandeep and his team have built an impressive digital ecosystem that can revolutionize the automobile buying and selling experience," added Pohren.
Washington, D.C based 57 Stars is an asset manager focused on alternative investing strategies globally, with nearly $4 billion raised and managed.
Prior to this funding, Droom had raised $30 million (around Rs 220 crore) in its Series E funding round in October 2018.
The Series E investment was led by the family office of Japanese investor Joe Hirao, who is the founder of ZIGExN.
In the same year in May, the company raised another $30 million (around Rs 204 crore) in its Series D round, which was led by Toyota Tsusho Corporation and existing investor Digital Garage of Japan. Toyota Tsusho is the trading arm of the Toyota Group.
Droom has also made acquisitions in the past years. Last year, it acquired Delhi-based augmented reality (AR) startup Visiolab Ideas to enhance its customer experience. In 2019, it acquired non-banking financial company Xeraphin Finvest to strengthen its consumer and dealer lending arm, Droom Credit.
Droom is the latest startup to enter the famed unicorn club of startups with a valuation of at least $1 billion.
India has churned out unicorns at a record pace this year despite the raging pandemic.
Just last week, BlackBuck achieved the unicorn status after Series E funding round led by Tribe Capital and other investors.
Fintech firm Cred, epharmacy PharmEasy, social networking platform ShareChat, marketplace for construction materials Infra.Market, industrial goods marketplace Moglix and messaging app Gupshup are among other startups that joined the elite club of unicorns this year.