Used car market in Indonesia on the way to growth Inspired by many trends: Advances in digitization of used car sales. More variety of financial options. And it was he who pushed the idea of owning a private car during the COVID-19 pandemic.
Indonesia-based auto finance startup Broom wants to help used car dealers work more efficiently by applying an asset-backed financing model to their business. He closed $10 million in a pre-series A funding round led by Open Space Ventures.
other investors, including MUFG innovation partner BRI Ventures and previous backers including AC Venture and Quona Capital also participated in the latest round. (Bloom declined to comment on whether the company or its investors have been affected by the unraveling Silicon Valley Bank crisis.)
The startup was founded when Broom co-founder and CEO Pandu Adi Laras wanted to sell his car a few years ago. However, the used car dealer Laras visits tells him that with limited money on hand and working capital, he cannot afford to buy back Laras’ car and will only offer a trade-in instead.
“The traditional approach is like opening a one-man shop where sellers have to wait for their inventory to sell. [to end customers]And then we can use that money to sell new inventory,” says Laras.
According to Laras, the problem is very common among used car dealers in Indonesia, which is how he came up with the idea for Bloom.
Co-founders and CFOs Andreas Sutanto and Laras launched Broom in 2021. The following year, the company launched its flagship service, Buyback, to help used car dealers in Indonesia. Many of them have no access to capital.
“By buyback, [car dealers] Optimize your inventory, accelerate sales, and increase your bottom line. Our app allows them to easily manage their inflow and outflow flows and trade with other dealers in our ecosystem,” said Laras.
Buyback provides dealers with “short-term working capital through temporary vehicle sales services with a repurchase option” and dealer-to-dealer transactions, making inventory management more efficient. The startup says a buyback is “not a loan per se, but a temporary sale that includes a change of ownership. Dealers can buy back the item at a slightly higher price.”
(From left) Andreas Sutanto, co-founder and CFO. Pandu Adi Laras, co-founder and CEO. Clausen Synthesis, COO. Image credit: broom
The latest funding brings the total raised to $13 million and will enable Broom to diversify its product offerings and accelerate inventory turns for Broom and its dealers. The company recently soft-launched its first offline his showroom where dealer partners can showcase their inventory to more end customers. In addition to equity financing, Broom secured his $12 million loan from DBS Indonesia and his BRI last year. The startup aims to double its lines of credit from outside lenders in order to process more transactions.
According to Broom, its main target customers, more than 5,000 used car dealers, are currently using its platform in Indonesia, contributing about 30.6% of new car sales in Southeast Asia. On average, Broom says, using its buyback platform has allowed dealers to triple their inventory size, sales and profitability. The company focuses on Indonesia, where the used car market is estimated at his $65 million. Expected to reach $70.3 billion by 2027. Broom has the opportunity to offer its solutions to dealers and subsequently direct customers.
some automotive markets such as car, Cartham OLX Indonesia covers direct customer transactions and financing. Broom has set out to differentiate himself by looking to strengthen his existing dealership of over 50,000 in Indonesia.
Broom’s technical plans include building an intelligence model to assess vehicle quality.
The outfit employs 120 people.
“The used car market in Indonesia is huge, but fragmented and disorganized. We are empowering the small dealers that dominate the used car trade in Indonesia.”
