Many Indians were hesitant to put their money into internet markets. When it comes to platforms that offer clothes, commodities, food, and so on, things have altered dramatically. However, when it comes to larger investments, many people are skeptical of internet sources. At the same time, India is the world’s third largest auto market. Such a massive business potential can only grow with the correct technology. In this circumstance, an online classifieds for autos was the solution that everyone was looking for. Droom was effective in bringing this shift to the country.
So, what is Droom all about?
Droom is an online marketplace for buying and selling new and old automobiles. Sandeep Aggarwal, who is also the founder of ShopClues, is the founder of Droom. Since its inception in 2014, the platform has had a significant impact on the Indian E-business market. By the end of 2018, the company’s portal has 2,30,000 automobile suppliers. It is now on its way to becoming a household name in the worldwide vehicle industry. Droom is currently one of the country’s largest online vehicle markets. They control roughly 70% of total automobile internet sales. They are also India’s third largest internet business organization, behind Amazon and Flipkart.
Droom also provides additional services such as car help, certification support, and financial assistance. Droom is the premier totally transactional web site that enables direct and secure transactions between the buyer and the dealer. Their programs, such as Full Circle Trust Score, Buyer’s Protection, Orange Book Value, and others, address any issues that the buyer may have. They assist in resolving any issues linked with the stressful cycle of obtaining or selling a trade-in automobile. The site has a diverse variety of vehicles ranging from bicycles to airplanes.
How was Droom born? / Startup Story of Droom
Sandeep Aggarwal, the founder of Droom, was fascinated by the breadth of the car industry in India. The Indian car sector was having a very exciting period in the 2010s. After China and the United States, India has grown to become the world’s third-largest automotive market. The main distinction between these countries is that India has a low trust market. The Indian people are unwilling to incur the danger of discovering the sources on their own. In reality, the country lacked reliable web sources for this. Despite the fact that there are several automobile categories available on the web market, consumers still seek advice from a local car dealer.
Sticking to the conventional way was a horrible choice in this day and age. This was the inspiration for Sandeep to create Droom. Teruhide Sato, the Chief Executive Officer of Beenos Group, called him about the same time in May 2014. He wanted to meet him in San Francisco’s Chinatown at the Great Eastern Restaurant. Teruhide discussed how Barack Obama opted to attend this café during the meeting. He also informed Sandeep that he was looking forward to hearing about his next big business idea.
Teruhide listened intently as Sandeep described an online marketplace for secondhand autos in India. Teruhide expressed interest in the proposal and stated that he is willing to put up a million dollars as funding. Sandeep, who had spent the previous week developing Droom’s business plan, was ecstatic that it had been approved. The next week, he met Itchak Friedman, Chaim Friedman, and Jonathan Friedman of Lionbird Ventures, who had invested in ShopClues. Sandeep was able to persuade them to spend one million dollars after convincing them of his plan.
Business Model of Droom
Droom generates money primarily through four sources: service fees, premium tools, subscriptions, and advertisements.
The major source of revenue is the service fee, which is levied on every successful transaction on the site. This changes depending on the car.
The subscription plan is available to a variety of large car dealers, and the corporation offers them online products and services.
OBV, Droom credit, and other premium tools are available. Droom also makes money through commercials, since it promotes various vehicle companies on its site. This also contributes to double traffic on the platform.
Also Read: Uber – Evolving The Way The World Moves
Challenges and growth over the years
When Sandeep Aggarwal created Droom, it earned unexpected acceptance across the country. Many individuals began to rely on this web source while purchasing or selling a car. Nonetheless, just 4% of Indian families own a vehicle, whereas 25% own a motorcycle. Droom also had to deal with market competitors such as Carwale, CarDekho, and others. To maintain its business position, they continued to invest in artificial intelligence technologies. They used the funds to improve their service and fintech offerings.
Furthermore, the company’s Memorandum of Understanding with Toyota aided in its expansion. Droom has developed a pricing medium known as Orange Book Value (OVB), which will provide you with the market value of any trade-in car. Deep learning is also used by the corporation for automotive finance. If you need financial assistance to purchase a used vehicle, you can apply for a loan through the site. To choose an eligible consumer, they examine numerous characteristics about the candidates.
Droom also provides customers with information about a vehicle’s history. The Droom History is a repository of data about the nation’s 220 million automobiles. Droom examines and validates the information on it on a regular basis. By 2017, nearly three years into the operation, the organization claimed a GMV run rate of Rs 1,500 crore. In its RoC filings for 2015-2016, the organization’s turnover was listed as 17.2 crore rupees. This was a significant increase from 9.2 crore rupees in 2014-15. Staff costs have risen from Rs 9 crore to Rs 66 crore.
Funding of Droom
Droom has received $342 million in investment across nine rounds. Their most recent investment round was a $200 million Series G on July 28, 2021. Droom is backed by 44 investors, including DG Ventures, Beenos, Toyota Tsusho, and Lightbox.
The future for Droom
When compared to other E-business stages in India, Droom has the best unit economics. The organization spends less than 5% of its GMV on promotion and marketing. They are attempting to keep such expenditures as low as possible. The corporation has spent less than 4.5 percent on advertising. Sandeep Aggarwal loves to create and offer knowledge on the whole vehicle sector to the business ecosystem. He also intends to invest more in developing a technology and information sciences company.
Currently, B2C (business-to-consumer) administrations account for 90% of its revenue. The remainder of the earnings is generated through customer to dealer administrations. Despite being the world’s third largest automotive market, India ranks 67th in terms of per-capita vehicle accessibility. In the future years, Aggarwal sees an increase in the white-collar class, pay level, training level, and urbanisation. When all of these elements are considered, India will continue to have one of the world’s largest car businesses. As a result, Droom’s potential future includes additional doors of opportunity.
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