Auto financing startup Broom received an ‘A’ series investment injection worth IDR 122 billion (US$ 7.9 million) from Singapore-based venture capital company Openspace Ventures for its digitalization process.
Established in 2021, Broom is a business startup that provides opportunities for used car showroom problems in the Greater Jakarta, as well as providing liquidation solutions for used cars with transaction speed and digital integration. As a platform for showrooms, the company also provides inventory, financial bookkeeping and digital marketplaces as well as end-to-end finishing. The company has a target of becoming a center for providing digital solutions for mobility in Indonesia for small and medium enterprises (SMEs) in the automotive sector, or a dealer network center as well as digitalizing their business processes.
Investors help Broom develop
Broom platform provides options for dealer owners to manage inventory, conduct financial bookkeeping and manage their sales instruments.
“This startup aims to become a center for digitalizing the dealer network in Indonesia,” Pandu Adi Laras, Co-Founder and CEO of Broom, told DailySocial.id reported on March 8, 2023.
As of March 2022, Broom has more than 2,000 used car dealers in the Greater Jakarta area.
The Openspace Ventures led the investment funding, while other participants included MUFG Innovation Partners, BRI Ventures, AC Ventures and Quona Capital, DealStreetAsia (DSA) reported on December 1, 2022.
Previously, Broom had secured US$ 3 million in pre-seed funding led by AC Ventures, as well as participation from Quona Capital and several angel investors, including the founders of Kopi Kenangan and Lummo.
Broom is facing rivalry in the digital automotive sector from other players such as Carro, Carsome and LX Autos. Currently, these startup actors have explored pain points in the automotive sector with the support of technology such as Bengkel Mania and Broom.
Total car sales (new car shipments from factories to dealers) in January 2023 reached 94,067 units, an 11.8% increase compared to the same period of 2022 of 84,149, the Association of Indonesian Automotive Manufacturers (Gaikindo) reported. The association also recorded the 2022’s sales reached 1.05 million cars, an 18.1% raise from 2021’s of 887,202 units.
Challenges in dealership industry
Dealership owners admitted that they still had problems after trying to go online in their area, according to DailySocial.id. They still expect a solution to deal with cars that have not been sold for more than a month.
Another challenge is the interaction experience of potential customers and company marketing. “[By going] online, [dealers] can only provide visual information. But, if people want to drive a car, they still want the real experience,” the Bandung Institute of Technology (ITB) automotive observer Yannes Martinushe said as quoted by Antara news agency on August 5, 2021.
