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.
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.