In The Press


Droom rolls out credit marketplace to boost non-transactional revenue April 15, 2017

Droom, the e-commerce marketplace for new and used vehicles, has launched automobile loan facility Droom Credit. The company will be increasing other services contributing to its non-transactional revenue. Droom Credit will serve as a credit marketplace for buyers who seek loan to buy automobiles on the Droom platform.
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 plans to raise $50 mn, launches credit platform Apr 14, 2017

Sandeep Aggarwal, founder and chief executive officer of Droom, plans to raise $50 million and to become a unicorn, a start-up with valuation of $1 billion, by the end of this financial year. The e-commerce platform launched Droom Credit, a marketplace to get loans to buy used automobiles, a first of its kind in India, on Thursday.
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," he said.

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, I am hoping that we are one of the next ones to be a unicorn. We are saying we are the fifth largest player in the market on the basis of GMV. Our annualised GMV is Rs 2,500 crore, by March 2018 it would be around Rs 7,000 crore," he said. While the e-commerce sector is going through a major churn with eBay joining forces with Flipkart and Snapdeal, Aggarwal said that the online automobile sector has already gone through a level of consolidation. "In our sector consolidation has marginally happened. When we started there were five national brands, three are already gone. Quikr and OLX were invested heavily in cars, but now, not that much," he added.

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," he said. The company also plans to make one or two acquisitions by the end of 2018, it said.

Droom aims to go profitable by Q1 2018, launches used vehicle financing Apr 13, 2017

The Droom Credit feature aims to swiftly close a customer loan, all through an online paperless process, in a claimed thirty seconds. The company will make customers land on a 'borrowers' page, wherein they would be able to place their loan amount request and also digitally share their details on the website, along with incorporating KYC information through Aadhar.
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.

Droom, which will initially charge an assessment fee of Rs 299 from the customer, would evaluate the request with multiple financing companies, and once the customer chooses to go with a particular financer, there would be a charge of another Rs 700 as part of the processing fee.

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.

Droom launches 'Droom Credit' for easy auto loan for used vehicles Apr 13, 2017

Online automobile transactional marketplace Droom on Thursday unveiled its marketplace to get auto loan for used automobiles by launching Droom Credit, which an end-to-end online and fully automated credit marketplace to get loan approval in 30 seconds with its own proprietary credit risk engine, unbeatable credit terms, paperless process, and fully automated work-flow management.
"Leveraging a proprietary algorithm-based credit risk management engine as the fulcrum of its consumer credit marketplace, Droom Credit will aim to capitalize on its world-class technological and data science capabilities to make the loan assessment process fully dynamic, hassle free, and paperless to facilitate near-instant loans from lenders to borrowers," said founder and CEO Droom, Sandeep Aggarwal.

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 21st 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, Eco, History, Seller transaction history and buyer credit profile, we have built a highly advanced, completely paperless and instant decision marketplace," added Aggarwal.

"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, Eco, History and now Credit," Sandeep added.

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.

Droom launches loan marketplace for used automobiles Apr 13, 2017

Droom, an online platform for buying and selling used vehicles, has launched Droom Credit, a loan marketplace for pre-owned automobiles it claims is the country's first.
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, high rejection rate, lots of paperwork and unaffordable credit terms. The centre of Droom Credit is its proprietary credit risk engine."

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, we have invested in technology and product development. Around 10-12 engineers, product managers and business analysts have been working on it. Integration with the Aadhaar Stack, NBFCs, getting the CIBIL score, all that required lots of efforts and money," he said.

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 added.

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

"First, the take rate, which will depend on who the lender is (different take rates and commission structures for different lenders). It will also depend on the category and profile of the borrower, and on the fulfilment and disbursal of the loan. We have the option of being fully impaneled with banks and NBFCs for taking the entire liability, or just serving as an aggregator. The commercials will vary depending on how deep the integration is. All in all, this would be performance-based for every loan disbursed, and we will get 1-4% of the total loan amount as commission."

Second, Droom will charge Rs 999 from borrowers. "The moment a borrower applies for a loan, he will pay Rs 299 as there is some cost that Droom incurs in terms of checking CIBIL score, fetching Aadhaar data, and so on. Droom as a marketplace is a 95% gross margin business, so that amount only covers part of the total processing fees a borrower will pay. And, when the borrower goes ahead with the loan, he pays the remaining Rs 700," Aggarwal explained.

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

Droom Credit will initially restrict lending to borrowers purchasing vehicles from Droom. Going forward, however, it plans to open it to other platforms too.

"We will also look at expanding into other categories apart from auto, in the future," Aggarwal said.

Droom Launches Droom Credit - A Facility to get Auto Loan for Used Automobiles Apr 13, 2017

Droom has launched India's first marketplace to get auto loan for used automobiles. Droom Credit is end-to-end online and fully automated credit marketplace to get loan approval in 30 seconds with its own proprietary credit risk engine, unbeatable credit terms, paperless process, and fully automated work-flow management. The platform aims to capitalise on its world-class technological and data science capabilities to make the loan assessment process fully dynamic, 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 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 claims to help people get auto loan approval in 30 seconds Apr 13, 2017

CHENNAI: Online automobile transactional marketplace Droom has launched India's first marketplace to help people get auto loan -- both for new and used vehicles.
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," said the company in a statement.

"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 unbiased and instant credit evaluation," added the statement.

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, it takes forever, suffers high rejection rate, lots of paperwork and unaffordable credit terms. Hence, we wanted to make auto loan process very smooth, affordable, efficient and paperless. The centre of Droom Credit is a proprietary credit risk engine combined with OBV, Eco, History, Seller transaction history and buyer credit profile, we have built a highly advanced, completely paperless and instant decision marketplace. Because we have 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 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, Eco, History and now Credit," said Aggarwal.

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, including used and new vehicles, with a vision of becoming India's most comprehensive, unbiased and independent way of acquiring instant loans," said the statement.

Qbera-Droom partnership to offer tech-enabled auto financing avenue for consumers Oct 9, 2017

Fintech firm Qbera on Monday announced its partnership with Droom to provide easy financing options for purchasing pre-owned cars, bikes or new cars from the online automobile marketplace.
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, borrowers have to undergo arduous waiting periods before they receive the funds in their bank accounts. Moreover, traditional financial institutes offer loans at interest rates which start from 14 percent and can go as high as 20 percent. Qbera, on the other hand, follows a risk-based approval procedure and offers borrowers instant loans at the same rate in the shortest span of time. Hence, instead of seeking second-hand car loans, it would be a wiser option to apply for a personal loan on our platform," said Aditya Kumar founder and CEO, Qbera.

"Getting auto loans for used vehicles in India is full of pain points, simply because it takes forever. High rejection rates, lots of paperwork and unaffordable credit terms make it difficult for consumers seeking loans for used vehicles. Through our partnership with Qbera, we are offering a new-age auto financing option to make the loan disbursal process smoother, more affordable, efficient, and paperless. Hence, we are confident that this collaboration will prove to be a win-win situation for both companies and consumers," added Sandeep Aggarwal founder and CEO, Droom.

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.