8-month-old Indian automobile estore bags $15.6M to take on rivals

The Droom team

Droom, an eight-month-old marketplace for used and new vehicles in India, today announced that it secured US$15.6 million in a series A funding round led by Lightbox Ventures. The company previously raised undisclosed amount funding in seed funding from BEENOS.

From budget cars by Tata and Maruti to exotic Lamborghinis and super bikes, Droom has a wide range of vehicles for sale. It came up with a service called “Droom University” for auto dealers who are not internet savvy. The dealers can use the platform to learn how to sell online, including guidelines on bulk uploading, payment policies, and understanding the ecosystem in general. Droom has tied up with auto inspection companies Axa and Car Nation to verify vehicles on its site. It is partnering with Corporate Warranty for guarantees.

Droom has 9,400 sellers from 25 cities in India. So far, it claims to have completed 3,000 transactions.

“Droom’s product is built in a way that it can be customized for different countries. We will go to countries where we have language advantage and maintain a lean team of three people – catalog, business development, and marketing – before we scale in that market. The research and development wing will be headquartered in Gurgaon,” Sandeep Aggarwal, founder and CEO of Droom, tells Tech in Asia.

Taking cues from ShopClues

Earlier, Aggarwal founded ShopClues, one of India’s top ecommerce players, in November 2011. It was India’s first ecommerce marketplace. At that time, Indian ecommerce companies were inventory-led or operating on a Groupon-like model. Soon ecommerce became a crowded space with 35 other players, but Aggarwal managed to scale ShopClues and keep it in the top five.

But in 2013, he got entangled in an insider-trading case in the US. He pleaded guilty for passing non-public information and turned witness for the prosecution in the trial. The case is still ongoing, and a hearing is due in the next few months. Meanwhile, Aggarwal quit ShopClues.

“Shopclues has reached more than 100 million people. There aren’t that many examples of players who have touched so many globally,” says Sid Talwar, Partner of Lightbox, who is an investor in ShopClues too. He adds that one of the main reasons why Lightbox invested in Droom is the founder’s ability to execute a marketplace.

Aggarwal was thinking of ways to use his insights from ShopClues, and he spotted a US$125 billion opportunity in the automobile space. “There is a lot of inefficiency in the market. The automobile industry in India looks like how ecommerce did in 2005,” says Aggarwal.

Currently, India’s online automobile space is dominated by heavily-funded classifieds players like CarDekho and CarWale. However, in recent times, tech startups like GoZoomo and Truebil have also raised seed capital. GoZoomo, for example, is an entirely peer-to-peer player which focuses on solving the trust issue in the used cars market. It has a team of inspectors who check every vehicle on its site. Truebil also has auto engineers who take photographs and evaluate the cars before listing them on the site.

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