droom: Droom Technology bets on quadrupling the demand for electric vehicles in the next three years

Lightbox Ventures-backed online vehicle marketplace Droom Technology expects demand for electric vehicles to quadruple over the next three years, amid a sharp rise in fuel prices and further government push to accelerate the shift towards electric mobility.

Given traction in the local market, the company expects almost two-thirds of its sales to come from electric vehicles in the next three years, up from less than 2% today, founder and CEO Sandeep Aggarwal told ET.

The company has agreements with 45 electric vehicle manufacturers, including Hero Electric, Okinawa and Kinetic, for sales on its platform.

“Electric vehicles are the need of the hour, given the climate crisis we are witnessing. Consumer awareness and demand for electric vehicles have increased in the last year,” said Aggarwal.

While traction for electric two- and three-wheelers in the B2C segment has picked up considerably in recent months, demand momentum will be set in the four-wheeler category as automakers introduce more electric models like

Hyundai Motor and Mahindra & Mahindra said.

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Droom registers average monthly transactions of about 20,000 vehicles, currently. Of these, electric vehicles add up to around 300 units.

At the current rate of execution, the company expects to post a gross merchandise value of $2.75 billion this fiscal year. It posted a GMV of $1 billion in FY20.

Droom, who entered the unicorn club by surpassing the $1 billion valuation in the latest fundraising round last year, plans to launch an initial public offering as soon as the market stabilizes. He had filed a draft red herring prospectus (DHRP) with the market regulator in November 2021, but postponed the share sale due to the technological meltdown and global geopolitical crisis.

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“Once the market improves, we will be among the first to list,” said Aggarwal.

It is planning to raise Rs 3000 crore, at a valuation of more than $2 billion, from the initial public offering to fund the expansion, according to the filing. In the last round of fundraising, the company was valued at $1.2 billion.

According to its DRHP, the company plans to spend around Rs 400 crore of the IPO proceeds on inorganic growth initiative and Rs 1,150 crore on organic growth.

Droom reported revenue of Rs 125 crore in fiscal year 2021, when it sold 45,445 vehicles through the platform, according to the document. He had recorded a loss of Rs 68.8 crore for the year.

Aggarwal said demand momentum in the local market was strong and the company was “almost at profitability” now.

The GMV for online-traded used vehicles in India, which was Rs 15.4 billion in FY21, is expected to be nearly Rs 2 crore by FY26, according to industry estimates. .

Droom is an AI-powered online marketplace for buying and selling new and used cars. The company, founded in 2014, operates in 1,161 towns and cities. Aggarwal had previously founded ShopClues (in 2011).

Droom has raised $130 million to date. Key investors in the company include Beenos, Lightbox, Beenext, Digital Garage, Integrated Asset Management, Toyota Tsusho Corp, and the office of Joe Hirao (founder of ZigExn).

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