Droom Technologies, the e-commerce portal for sale of pre-owned and new cars, reported a higher net loss of R3.7 crore during FY16
Droom Technologies, the e-commerce portal for sale of pre-owned and new cars, reported a higher net loss of R3.7 crore during FY16 compared to R2.2 crore in the previous year, Sandeep Aggarwal, founder and CEO of Droom told FE.
During the period, the company’s revenue jumped to R35 crore against R93 lakh reported a year ago. The company’s gross merchandise value during the year was R1,600 crore, which means that the actual revenue booked by the company was 2% of the GMV.
Aggarwal, who’s also the founder of Shopclues founded Droom in 2014 and the business model of the company revolves around earning revenue via commission from sale of old and new vehicles on its platform. The company also earns a commission on after-sale services such as car repair and maintenance, online repository of vehicles and premium subscription model for car dealers.
During the current month, the company has started exploring monetisation opportunities from its fintech business with insurance, loans and warranty. For the current fiscal (FY17) the company is expected to earn R65-70 crore in revenue but its losses are set to increase by 50% to R5.5 crore due to a major expansion exercise undertaken.
Aggarwal said that the company will be fully profitable between November 2017 to February 2018. “By March 2017 we will earn about R3,000 crore in GMV and between R3,500-4,000 by December 2017,” he said. Aggarwal pegged the average ticket size on its platform at R2.10 lakh. On an average, a scooter is sold for R48,000, motorcycle for R68,000, car for R3.4 lakh, super bike for R3.75 lakh, luxury car for R28.5 lakh and after-sale services fetch about R1,500.
“We are burning only 3.2% of the GMV in running Droom against e-commerce companies such as Flipkart and Snapdeal burning to 12-18% of the GMV on running the company,” Aggarwal said. “We are spending about 4.5% of the GMV on marketing. Over the last couple of months, we have reduced the customer acquisition cost substantially from R18,000 in early 2015 to R4,400 currently,” he added.