In The Press

Earlier people use to go to the banks and sahukar (Money Lenders) to take loans. It takes a lot of effort and time with heavy paperwork. Now in today's world, Indian start-ups are coming up with various products to ease finance/Credit or loans within 5-10 minutes without any paperwork. From financing your car to getting easy loans, now you can get all financial services with a single click on your mobile phone with the ease of EMI's.

Droom Credit:

Droom Credit is India's first marketplace that offers loan decision in 30 seconds for automobiles. It gives freedom to apply for loan anytime, anywhere using any device 24x7. Since Droom Credit is a marketplace with multiple lenders competing for the same business, the borrower can get credit terms that are not easy to find or possible in traditional system.

The deal will help Gurugram-headquartered Droom expand its fintech unit Droom Credit and Xeraphin’s acquisition is likely to drive loan disbursals for customers purchasing pre-owned vehicles. Under the Droom Credit business, the company will also facilitate dealer financing options.

Droom claimed that it has so far processed over 10k loans in the last 12 months. The Droom Credit marketplace has tied up with lending partners such as IDFC First Bank, Yes Bank, Tata Capital, Manappuram Finance, Faircent, Hero Fincorp, Cashkumar, and Lendbox for providing loans to its customers.

Droom started its fintech services in September last year, with a focus on used vehicle financing and insurance. Aggarwal told Inc42 in an earlier interaction that Droom doesn’t have plans to hive-off its fintech vertical. He added that used-car financing business is growing at a rate of 100% month-on-month.

Droom founder and CEO Sandeep Aggarwal said the acquisition will further bolster Droom’s capabilities in offering loans at a larger scale. “It will ensure the maximum convenience and minimum hassles for company’s primary stakeholders, thereby building the narrative of success for Droom further,” he added.

Revenue generation under Droom Credit will work under three models - processing fee from borrower and lender of `999 each and take 1-4% of the loan value from the lender. Sandeep Aggarwal, founder and CEO of Droom, said by end of March 31, 2019, the company will garner 20% revenue from Droom Credit.

Other non-transactional revenue stream for the company are: pre-seller premium subscription for dealers, advertising for brand and manufacturers, pricing engine Orange Book Value and inspection report Eco. By FY18, these services will form 12-15% of the revenue pie.

The credit risk management engine of Droom Credit is a algorithm-based system which will use applicant information such as Aadhaar, PAN, income statement authentication, e-sign, digital locker, etc to analyse credit worthiness for the loan.

The company has tied up with 14 banks, NBFCs, and fintech companies including Capital First, HDFC Bank, Kotak, Tata Capital, Faircent and LoanMe.

Rishab Malik, co-founder and VP of business development, said the interest rate would vary between 12% and 18%. The company has pegged the average loan size for a two-wheeler at `25,000 and at `120,000 for a four-wheeler.During FY17, the company reported `2,500 crore in annual gross merchandise value and `45 crore in revenue, according to Aggarwal. In an earlier interview to FE, he had pegged losses for FY17 at `5.5 crore. By the end of December this year, the company is targeting GMV of `5,000 crore and revenue of `120 crore.

Droom Credit is a fully automated credit marketplace to get loan approval. It leverages India Stack which includes Aadhaar, e-Sign and Digital Locker. The marketplace also uses, PAN verification, credit score validation, income statement authentication, along with many other variables for instant credit evaluation.

Aggarwal has been making frequent trips to China and Hong Kong among other places to raise the next round of funding, which he believes would happen in the next six months. We have significant interest coming from China. We did an investor day in Hong Kong. We are thinking of raising around $50 million

Founded in April 2014 in Silicon Valley, Droom is an online marketplace to buy and sell new and used automobiles and automobile services. According to Aggarwal, Droom would be a billion dollar valuation company by the end of this year and is the fifth largest e-commerce company in terms of gross merchandise value (GMV) if one does not take into account major travel portals.

If you do benchmarking

The company says its burn rate is down to $1 million a month as it runs a tight ship and has a headcount of just 250 employees. The firm hasn't spent much of the Rs 200 crore which they raised in the last round. Our burn rate is around a million dollars a month. From now on our burn will further go down. We plan to be profitable by Q1 of 2018

At the back end, Droom Credit, which deploys a data science algorithm tool, would run different calculations, fetch CIBIL scores and after checking with multiple financing companies, all registered with the company, would offer a loan possibility result, in a 'Yes', 'No' or 'May Be' verdict, after running for 30 seconds.

Having initial tie-ups and ongoing talks with around 13 financing companies, which include banks like HDFC and various NBFCs, including Kotak Prime, Tata Capital and Capital First, to name a few, there is competition in place, which brings in flexibility until what extent lenders can go to offer a loan to a customer, in terms of the total amount and interest rate.

With this, Droom Credit, as a service provider aims to facilitate customers to get their loan approved at an affordable rate, which based on individual credentials, could go as low as the prevailing interest rates in the market for new vehicles.

Following approval of a loan, the total time taken to finally disburse the amount to the customer would be around 48-72 hours, which could stretch to about a week for cases, wherein the evaluation came up with a 'May Be' result.

The company also plans to extend this feature to vehicles which are there in the inventory with dealers associated with Droom but not listed on the portal. Later on, Droom aims to diversify the Droom Credit feature to other areas and collaborations, beyond the automotive space.

The technology startup, which saw a conversion rate of 7 percent of the listings getting sold in FY2017, aims to double its Gross Margin Value to Rs 5,000 crore by December this year, with ambitions of becoming profitable by Q1 2018.

Leveraging a proprietary algorithm-based credit risk management engine as the fulcrum of its consumer credit marketplace

As part of the initiative, Droom has on-boarded BFSIs comprising commercial banks, NBFCs, and other financial entities such as the Tata Capital, Faircent, Kotak and HDFC with its initial service rollout..

The platform conducts comprehensive loan assessment through its algorithm which computes multiple raw data points to analyse the creditworthiness of an applicant.

This includes leveraging the India Stack i.e. Aadhaar, e-Sign and Digital Locker. The Marketplace also uses, PAN verification, credit score validation, income statement authentication, along with many other variables for objective, unbiased and instant credit evaluation.

Droom Credit is a 21^st century way to borrow or lend for used automobiles. Getting auto loan for used vehicles in India has been full of pain points because, it takes forever, high rejection rate, lots of paperwork and unaffordable credit terms. Hence, we wanted to make auto loan process very smooth, affordable, efficient and paperless, said Sandeep Aggarwal.

The centre of Droom Credit is a proprietary credit risk engine combined with OBV

With Droom we not only built India's most advanced marketplace for automobiles but we have also launched four very important tools for the ecosystem that are becoming industry standards such as Orange Book Value

Apart from the assessment report, Droom Credit comes equipped with Store Manager, a lender's dashboard, ratings and reviews, lender/buyer KYC and self-configurable credit risk panel.

Store Manager grants higher flexibility and greater command to the lenders over the loan origination process. It allows lenders to modify profile settings, set credit terms, post document requirements, and set or manage credit risk profiles, along with other vital features.

They can also override default algorithmic settings for all categories through the Store Manager. By doings so, lenders can set their own scores and weightages for their desired buckets.

Increasing its gamut of services, the platform will also unveil a borrower management platform, digital lockers for all documents, a billing and payments management platform, a review and ratings system, and an order management platform on Droom Credit.

The platform will initially cater to automobile loans including used and new vehicles with a vision of becoming India's most comprehensive, unbiased and independent way of acquiring instant loans.

To this end, it has partnered several commercial banks, non-banking financial companies (NBFCs) and financial technology firms. For the initial rollout, it is going live with a dozen lenders, including HDFC Bank, Kotak Prime, Tata Capital, Faircent, i2i Lending and Capital First, a company statement said.

Droom Technology Pvt. Ltd, which runs Droom, leverages its proprietary credit-risk engine to analyse the creditworthiness of an applicant. The platform, which guarantees loan approval within 30 seconds, uses the government-backed Aadhaar stack, apart from PAN verification, credit score validation and several other variables for credit evaluation.

Sandeep Aggarwal, founder and CEO, Droom, said, Getting auto loan for used vehicles in India has been full of pain points because it takes forever

Investment, business model Aggarwal did not disclose the exact amount spent on the product, but told VCCircle it could easily have been a couple of million dollars."

Over the last 9-10 months

As for marketing spend, the company is planning to go all out in promoting Droom Credit during Diwali this year. We will allocate Rs 12-15 crore for the promotion

Aggarwal also talked about Droom Credit's business models. There are three ways we are going to earn money, he said.

First

Second, Droom will charge Rs 999 from borrowers. The moment a borrower applies for a loan

Third, it will also charge the lender Rs 999 upon successful loan disbursal.

Droom Technology Pvt. Ltd, which runs Droom, leverages its proprietary credit-risk engine to analyse the creditworthiness of an applicant. The platform, which guarantees loan approval within 30 seconds, uses the government-backed Aadhaar stack, apart from PAN verification, credit score validation and several other variables for credit evaluation.

We will also look at expanding into other categories apart from auto

As part of the initiative, Droom has on-boarded BFSIs comprising commercial banks, NBFCs, and other financial entities with its initial service rollout.

A proprietary algorithm-based credit risk management engine is used to power this consumer credit marketplace.

How does it work

The platform conducts comprehensive loan assessment through its algorithm which computes multiple raw data points to analyse the creditworthiness of an applicant. This includes leveraging the India Stack i.e. Aadhaar, e-Sign and Digital Locker. The Marketplace also uses, PAN verification, credit score validation, income statement authentication, along with many other variables for objective, unbiased and instant credit evaluation.

The proprietary algorithm comes up with an accurate credit decision within 30 seconds for 95% of the transactions. The decision also includes approximately 5% pre-approved applications that require further lender-side inspection. Thereupon, approved and pre-approved applicants are required to choose a lender with appropriate credit terms which comprise factors such as amount, duration, interest rates, and down payment. The application of the candidate is subsequently forwarded to the selected lender along with the assessment report.

How does it help the lender

Apart from the assessment report, Droom Credit comes equipped with Store Manager, a lender's dashboard, raitngs and reviews, lender/buyer KYC and self-configurable credit risk panel . Store Manager grants higher flexibility and greater command to the lenders over the loan origination process.

It allows lenders to modify profile settings, set credit terms, post document requirements, and set or manage credit risk profiles, along with other vital features. They can also override default algorithmic settings for all categories through the Store Manager. By doings so, lenders can set their own scores and weightages for their desired buckets.

The platform will initially cater to automobile loans including used and new vehicles with a vision of becoming India's most comprehensive, unbiased and independent way of acquiring instant loans.

Droom Credit gives buyers/borrowers the freedom to apply for loan anytime, anywhere using any device. There's the flexibility to apply for a loan 24x7 not just following the traditional hours of 10 - 5. We keep user at the centre of everything, to ensure borrower and lender are equally benefited by this technological revolution.

Lenders will no more have the headache of collecting the hard paper documentation, compiling files and explicitly checking the credit history.

Droom Credit is an end-to-end online and automated credit marketplace to get loan approval in 30 seconds with its own credit risk engine, paperless process and automated work-flow management.

The platform aims to capitalise on its technological and data science capabilities to make the loan assessment process fully hassle free and paperless to facilitate near-instant loans from lenders to borrowers. As part of the initiative, Droom has on-boarded BFSIs comprising commercial banks, NBFCs, and other financial entities..

Droom leverages a proprietary algorithm-based credit risk management engine as the fulcrum of its consumer credit marketplace

The platform conducts comprehensive loan assessment through its algorithm which computes multiple raw data points to analyse the creditworthiness of an applicant. This includes leveraging the India Stack; i.e.

At the launch, Sandeep Aggarwal, founder and CEO, Droom, said, Getting auto loan for used vehicles in India has been full of pain points because

The proprietary algorithm comes up with an accurate credit decision within 30 seconds for 95% of the transactions. The decision also includes approximately 5% pre-approved applications that require further lender-side inspection. Thereupon, approved and pre-approved applicants are required to choose a lender with appropriate credit terms which comprise factors such as amount, duration, interest rates, and down payment. The application of the candidate is subsequently forwarded to the selected lender along with the assessment report.

With Droom we not only built India's most advanced marketplace for automobiles but we have also launched four very important tools for the ecosystem that are becoming industry standards such as Orange Book Value

Apart from the assessment report, Droom Credit comes equipped with Store Manager, a lender's dashboard, ratings and reviews, lender/buyer KYC and self-configurable credit risk panel.

Store Manager grants flexibility and greater command to the lenders over the loan origination process. It allows lenders to modify profile settings, set credit terms, post document requirements and set or manage credit risk profiles, along with other vital features. They can also override default algorithmic settings for all categories through the Store Manager. By doings so, lenders can set their own scores and weightages for their desired buckets.

Increasing its gamut of services, the platform will unveil a borrower management platform, digital lockers for all documents, a billing and payments management platform, a review and ratings system, and an order management platform on Droom Credit.

The platform will initially cater to automobile loans

Aspiring automobile owners can now choose from more than 50 lakh options on Droom, which include cars, bikes, scooters, and super cars and finance their dream vehicle with unsecured personal loans from Qbera. Also, With the help of a driven team of experts and cutting-edge innovation, the platform approves and disburses personal loans of up to Rs. 7.5 lakh in as little as 24 hours.

Traditional lenders have exhaustive and strict criteria when it comes to funding auto loans for pre-owned vehicles. Due to long and time-consuming verification procedures

Getting auto loans for used vehicles in India is full of pain points

India's automobile industry displays humungous potential and is currently the third largest market in the world. The pre-owned car market in the country, with approximate annual sales of 3.6 million cars, is growing at an exponential rate of 20-25 percent and is expected to grow to 4x of its current value by 2020. Currently, a majority of automobile deals by millennials in India are conducted online.

Traditional lenders are often reluctant to finance pre-owned cars due to the faster rate of depreciation, thus offering a sizeable market opportunity for digital lending platforms like Qbera in this segment.

The platform assesses borrowers based on a wide range of non-traditional criteria in addition to traditional information such as their income, credit score, social score, and FOIR/DTI to ensure that they have the capacity to repay the loans.