Used Car Marketplace 'Droom' Plans to Come up with IPO in March 2025
The founder and CEO of used car marketplace 'Droom', Sandeep Aggarwal said on Wednesday that the company plans to come up with an initial public offering (IPO) in March 2025.
In an interview with ANI, Aggarwal said that the company is planning to restart the IPO process next year and in March 2025, the company will go public. On the sidelines of the India Global Forum's Middle East and Africa 2023, Aggarwal said that the automobile market and the second-hand automobile market in India have huge potential. India recently, a few months ago, became the third-largest automobile market in the world.
A decade ago, we were sixth largest, but if you think about it, in spite of being third largest now, only 5pc of Indian households have a car and 25 per cent of households have two-wheelers.
The Indian automobile market, especially used cars, can grow roughly at a 12 to 15% compounded annual growth rate for decades to come. In the top 20 economies, this is probably the fastest way an automobile market is growing. The Indian second-hand car market has huge potential. If you see the global trends, they are very encouraging for the used car market.
According to a study roughly 10 years ago, for every new car, 1.2 used cars were sold. That number is now at 1.65 cars sold per year, as against one new car in India. The best ratio of used car sales is in the United Kingdom at 3.3. The second-best ratio is in Germany, Japan and the USA, with around 2.8 used cars sold as against one new car sale.
Aggarwal said that in the next five years, India can easily touch 2.5 to 2.8 used car sold for every new car. So there is huge potential.
Aggarwal said that another thing is that India has the world's largest youth population, the aspirational value is very high and the average duration of car ownership has come down dramatically.
Talking about why someone will invest in Droom as an e-commerce second-hand car company, Aggarwal said that a decade ago, it used to be roughly six to seven years and right now it's around five years. Droom is a pure-play e-commerce company. India is now very attractive globally.
Then, on top of that, we are talking about the third-largest automobile market, which will probably grow the fastest in the next two decades. And then comes Droom, where we have a very disruptive technology model, which is asset light. We have the largest selection in India for any automotive retail play.
On our platform, roughly 24,000 crore rupees worth of used cars were sold in a single year. We have a low price, world-class technologies and a very futuristic model. So that actually creates a very, very compelling opportunity. We are an Initial Public Offer (IPO) company. the company has raised seven round of capital, and hopefully in early 2025, we will file our IPO. So It's a good entry point for investors right at this stage.
Sandeep Aggarwal is also an investor who invests in startups. Talking about his investment, Aggarwal said that I'm a fairly active angel investor. I was able to build two large companies in India. I have invested in 62 companies, and out of them, roughly half of the investment I have made since January 2033
Droom, founded in 2014 by Aggarwal, offers an e-commerce platform where it connects used car passenger dealers with potential customers. The Unicorn also provides financing through its tie-up with banks and NBFCs. By the end of 2021, Droom claimed to have a presence in over a thousand cities across the world, including in Southeast Asia, the Middle East and Africa.
Droom, which competes against the likes of Spinny, Cars24, and CarTrade, entered the coveted unicorn club in 2021 after raising $200 Mn from new investors such as 57 Stars and Seven Train Ventures.