used in the Indonesian car market It is on the path of development. It is driven by several trendsDigitalization of used car sales; Great financing options; And the Covid-19 pandemic, which has pushed the idea of private car ownership.
Broom, an Indonesia-based self-financing startup that wants to help used car dealers operate more efficiently by implementing an asset-backed lending model for their businesses — offering in-app trading between dealers and new financing to do so — reported Tuesday. It closed a $10 million pre-Series A financing round it led. Open space venture.
including other investors MUFG Innovation Partner, BRI Ventures and its previous backers such as AC Venture and Quona Capital also participated in the final round. (Broom declined to comment on whether he or his investors were affected by the Silicon Valley banking crisis.)
The startup was founded when Pandu Adi Laras, CEO (CEO) and co-founder of Broom, wanted to sell his car a few years ago because he needed money to renovate his house. However, the used car dealers that Laras visited told him that they could not afford to buy Laras’ car again due to limited cash and working capital, and instead offered a trade-in.
“The traditional approach is similar to opening a mom-and-pop store, where sellers have to wait until their items are sold. [to end customers]And then they can use the money to get new items to sell,” Laras said.
The issue was common among used car dealers in Indonesia, according to Laras, which is how he came up with Broom’s idea.
Co-founder and Chief Financial Officer (CFO) Andreas Sutanto and Laras launched Broom in 2021. The following year, it launched its flagship service, Buyback, to help used car dealers in Indonesia, many of whom lack access to capital.
“By buying, [car dealers] It can facilitate their inventory and accelerate their profits, thereby increasing their income; Our app allows them to easily manage entry and exit flows and trade with other traders in our ecosystem,” said Laras.
Buyback offers dealers “short-term capital with the option to purchase temporary car dealerships” and dealer-to-dealer business, making inventory management more efficient. “It’s not a loan per se, but more of a temporary sale, which includes a change in ownership,” said startup Buyback. The merchants can then buy their goods at a slightly higher price.
The latest round of funding brings the total raised to $13 million in equity, which will enable Broom to expand its product offering and accelerate the turnover of goods for Broom and its distributors. The company recently soft-launched its first offline showroom where its distributor partners can showcase their products to their core customers. In addition to equity financing, Broom secured a $12 million loan from DBS Indonesia and BRI last year. The startup aims to double its credit facility from foreign lenders to accommodate more transactions.
Broom has more than 5,000 used car dealers whose main target customers currently use the platform in Indonesia, which accounts for 30.6% of new automotive sales in Southeast Asia. On average, using the Buyback platform has enabled merchants to increase their volume, sales and profitability by 3x, according to Broom. The company focuses on Indonesia, where the used car market is estimated at 65 million dollars It is expected to reach 70.3 billion dollars in 2027. Broom has the opportunity to offer its solution directly to merchants and later to customers.
Some automotive marketplaces, e.g Car, Also and OLX Indonesia, covering direct-to-consumer business and finance. Broom has tried to distinguish itself by aiming to encourage more than 50,000 existing traders in Indonesia.
Broom’s technology plans include building an intelligence model to assess car quality.
The outfit employs 120 people.
“Indonesia’s used car market is huge but fragmented and fragmented,” said Nobutake Suzuki, president and CEO of MUFG Innovation Partners. “Broom is taking an innovative approach to make asset-backed loan solutions more flexible, cost-effective and accessible, helping to encourage small-scale dealers who dominate used car transactions in Indonesia.”