Exclusive: Droom Set to File IPO for INR 1,000 Cr – Don’t Miss Out!

Droom Set to File for IPO Valued at $1.5 Billion

Used car marketplace Droom is gearing up for a significant milestone as it prepares to file draft papers for its initial public offering (IPO) valued at a staggering INR 1,000 Cr (approximately $115 Mn) by June this year. Sources close to the matter revealed this exciting development to Inc42.

Contextual Overview:
The startup ecosystem is abuzz with Droom’s upcoming IPO, reflecting the growing trend of tech companies going public to fuel their expansion and growth strategies. Droom’s move to tap into the public markets signifies a pivotal moment in its journey, showcasing the potential for significant valuation and investor interest in the used car marketplace segment.

Strategies and Success Stories:
Droom’s IPO plan includes a fresh issue and an offer for sale, with the fresh issue expected to constitute over 50% of the offer. The company aims to achieve a valuation ranging between $1.2 Bn and $1.5 Bn, underscoring its ambitious growth trajectory and market positioning. By finalizing two middle market banks for the IPO and actively engaging with investment bankers, Droom is laying the groundwork for a successful listing by November this year.

Challenges and Innovations:
Droom’s decision to reduce its IPO size stems from its projected EBITDA profitability target in the financial year 2025-26, indicating a strategic approach to capital utilization and financial sustainability. The startup’s pivot from budget-friendly cars to mid/premium and luxury cars has significantly boosted its margins, reflecting a bold move towards value-driven offerings and revenue diversification.

Conclusion:
In conclusion, Droom’s IPO journey represents a milestone in the startup landscape, showcasing the power of strategic planning, market positioning, and investor confidence. As the company gears up for its public debut, the industry watches with anticipation to witness the impact of this monumental move on the startup ecosystem and the used car marketplace segment.

Frequently Asked Questions:

1. How much is Droom aiming to raise through its IPO?
   Droom aims to raise INR 1,000 Cr (about $115 Mn) through its upcoming IPO.

2. What is the valuation range Droom is targeting for its IPO?
   Droom is eyeing a valuation between $1.2 Bn and $1.5 Bn for its IPO.

3. What led to Droom’s decision to reduce its IPO size?
   The primary reason behind reducing the IPO size is Droom’s projected EBITDA profitability target in FY25-26.

4. What strategic shift did Droom make in its product offerings?
   Droom shifted from selling budget-friendly cars to mid/premium and luxury cars to boost margins.

5. What are Droom’s revenue projections for FY25?
   Droom is on track to close FY25 with a revenue of INR 250 Cr.

6. How has Droom diversified its business beyond car sales?
   Droom also operates a car financing arm, a SaaS vertical, and an advertising business.

7. What recent service did Droom launch?
   Droom recently launched car rental services to expand its offerings.

8. Who are some of Droom’s key investors?
   Droom has received funding from investors like Lightbox, 57 Stars, and Seven Train Ventures.

9. What was Droom’s previous attempt to go public?
   Droom previously filed a draft red herring prospectus (DRHP) in late 2021 to raise INR 3,000 Cr but deferred its IPO plans due to market volatility.

10. What funding round is Droom planning ahead of its IPO?
    Droom is looking to raise around INR 200 Cr (about $23 Mn) in a pre-IPO round from existing and new investors. "10 Tips for Launching a Successful Startup in 2021"

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