The company plans to come up with an initial public offering (IPO) in March 2025, Sandeep Agarwal, founder and CEO of used car marketplace Droom, said on Wednesday.
In an exclusive interview with ANI, Aggarwal said that the company plans to restart the IPO process next year and by March 2025, the company will go public.
On the sidelines of the India Global Forum for the Middle East and Africa 2023, Agarwal said that the automobile market and the second hand market in India have huge potential. Recently, a few months ago, India became the third largest automobile market in the world.
A decade ago, we were the sixth largest country, but if you think about it, in spite of being third largest country, only 5% of Indian households own a car and 25% 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 20 largest economies, this is probably the fastest way for the automobile market to grow. The used car market in India has huge potential. If you look at 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. This number now stands at 1.65 cars sold annually, compared to one new car in India. The best used car sales ratio is in the UK at 3.3. The second best ratio is in Germany, Japan and the United States, with around 2.8 used cars sold as against one new car sale.
In the next five years, India could easily sell 2.5 to 2.8 used cars for every new one, Agarwal said. So there is huge potential.
The other thing is that India has the largest youth population in the world, the aspirational value is very high and the average duration of car ownership has also come down dramatically, Agarwal said.
Talking about why someone will invest in Droom as a used car e-commerce company, Aggarwal said that a decade ago, it used to take about six to seven years and now it is about five years. Droom is a pure-play e-commerce. India is now very attractive globally.
Moreover, we are talking about the third largest automotive market, which will likely be the fastest growing over the next two decades. Then comes Droom, where we have a very disruptive technology model, which is asset-light. We have the largest selection in India for any automobile retail play.
Nearly Rs 24,000 crore worth of used cars were sold on our platform in single year. We have low price, world-class technologies and a very futuristic model. This really creates a very compelling opportunity. We are an Initial Public Offering (IPO) company. The company has raised seven rounds of capital and we hope to file for an IPO in early 2025. So it's a good entry point for investors at this stage.
Sandeep Agarwal is also an investor who invests in startups. Talking about his investment, Aggarwal said I am a fairly active angel investor. I have been able to build two big companies in India. I have invested in 62 companies, of which nearly half of the investments I have made since January 2033.
Droom, founded by Aggarwal in 2014, offers an e-commerce platform where it connects used passenger car dealers with potential customers. Unicorns also provide financing through their association with banks and non-banking financial companies. As of late 2021, Droom claimed to have a presence in over a thousand cities around the world, including 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 USD 200 million from new investors including 57 Stars and Seven Train Ventures.