Droom, one of several startups taking advantage of India’s booming secondhand vehicle market, is planning to enter new countries after raising a Series B from Beenext and Digital Garage. The company hasn’t disclosed the amount of the round, but TechCrunch has learned that it’s between $25 to $30 million at a post-money valuation of more than $200 million.
Lightbox and Beenos Partners, which both participated in Droom’s $16 million Series A last year, also returned for this round. Droom currently claims a total of 3,500 transactions are completed every month on its marketplace and that it makes $160 million in annualized gross merchandise volume.
Part of Droom’s Series B will be used to expand into Southeast Asia. The company plans to be in Singapore, Indonesia, Malaysia, the Philippines, Vietnam, and Thailand by the end of this year.
Droom head Sandeep Aggarwal also founded e-commerce marketplace ShopClues, which claimed unicorn valuation earlier this year and is now planning an initial public offering. Aggarwal left ShopClues in 2013 after the Federal Bureau of Investigation began investigating him for insider trading (he later pled guilty in a plea bargain).
For his re-entrance into the startup world, Aggarwal tells TechCrunch he picked secondhand vehicles because it is one of the fastest-growing markets in India. Aggarwal says that there are 1.3 used vehicles sold for every new one in India and that he believes that ratio will increase to 2:1 by the end of next year.
Demand for secondhand vehicles is fueled by growing purchasing power among consumers as India’s economy grows. Indian car owners tend to upgrade their vehicles more often than their counterparts in other countries as their income grows, adds Aggarwal.
“What is driving demand is aspirational value as education and income levels rise. Someone who does not have a vehicle might start with a used car that is a hatchback, then a sedan, then a mid-size sedan, then a luxury car,” he says.
Droom competes against classifieds site OLX, as well as other used car platforms like CarTrade and CarDekho.
Aggarwal says Droom differentiates by using data science to create alternatives to the Kelley Blue Book and CarFax’s vehicle history reports, which are invaluable for secondhand car buyers in the U.S., but don’t exist in India. For example, Droom automatically rates individual listings on a scale of 1 to 10, depending on how much information, documentation, and detailed photos it includes, and also operates an on-demand inspection service called ECO.