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.