The world's largest automaker Toyota is all set to drive into India having led a $30 million (about Rs 203 crore) equity financing round in online marketplace for used automobiles and auto services Droom.
The company said it plans to go for an initial public offering (IPO) by the end of 2019.
The Series D round also saw participation from Asia-based investment manager Ellison Investments as also existing investors along with several institutional investors and family offices from China, Hong Kong and South East Asia. Ltd, owner of the online platform. Droom has so far raised close to $65 million dollars in four rounds of funding. The company claims to be catering to over 250,000 auto dealers in more than 500 cities across India and 27.3 million monthly visitors online, with 7.4 million app downloads and 5.5 million via Facebook reach.
In the automobile sector, Droom competes with the likes of Pitstop & Cartisan among others. People-to-people platforms, such as OLX and Quikr, too, share the same space.
The capital will be used to hone the technology end of the platform and will see Droom invest heavily in further developing its machine learning and artificial intelligence capabilities to target a significant growth in scale.
"We were heavily invested in data science but now we have chose to take it to the next step by incorporating AI into the platform". Sandeep Aggarwal, founder & CEO, said by mid 2019 they will be operational in five countries. Markup is an increase in the price of something based on the difference between the cost of producing it and the price it is sold at.
"AI would ideally let the machine also control inventory decisions, depending on historical data of the auto make and model". The Nasdaq-listing is because "most of the tech plays are traded and listed on that exchange", said Aggarwal. "Out of our 300-plus employees, more than half are engineers or product-oriented people". We are in discussions with several companies and should wrap things up soon, " he added. Aggarwal said that the firm was looking to foray into nine countries: Indonesia, Vietnam, Malaysia, Thailand, Singapore, Cambodia, Myanmar, Laos and the Philippines.
The company said it will use the proceeds from latest round towards initiatives to grow its market share in India, technology expansion and launch in worldwide markets. "But we will remain headquartered in Gurugram, where we will continue to build our brand and platform", Aggarwal said. The company raised $20 million Series C funding in July 2017, $25 million Series B funding in June 2016, $16 million Series A funding in July 2015 and $2 million in Seed round in June 2014.
In April 2018, Pitstop raised $1.6 million in a Pre-Series A funding round from its existing investors Blume Ventures and Singapore-based Goldbell Group and in March, it also acquired Noida-based startup MotorWhiz, which offers mobile solutions for vehicle services and fix jobs, in a part cash-part stock deal.
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Through the latest funding and the ongoing support of investors, Droom aims to cement its position as India's foremost online automobile marketplace.
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