Auto dealer financing startup Broom bags US$10M to diversify product offerings

Broom, an all-in-one automotive SME solutions startup in Indonesia, has secured US$10 million in a pre-Series A funding round led by Openspace Ventures.

MUFG Innovation Partners, BRI Ventures, and existing investors AC Ventures and Quona Capital also joined.

Jakarta-headquartered Broom will use the money to diversify its product offerings and further accelerate dealer inventory turnover.

Established in 2021, Broom provides an end-to-end financial solution for auto dealer inventories. Its flagship service, Buyback, provides dealers short-term working capital through a temporary car sale service with a repurchasing option. This scheme allows dealers to optimise inventory, accelerate turnover, and eliminate non-performing loans.

Over the past year, the company claims to have transacted over US$300 million in inventory through its Buyback scheme and onboarded over 5,000 used car dealers. The gross merchandise value has increased 16x year-on-year.

In addition, it also offers a digital showroom management platform for dealers.

Also Read: Broom nets US$3M to provide financing, digitalisation solutions for Indonesia’s auto dealers

By applying the latest technology to the sector, Broom also plans to develop an intelligence model for assessing car quality and, more effectively, appraising the fair value of vehicles. This cutting-edge approach will provide customers with greater transparency.

Since its inception, Broom has established six branches across Greater Jakarta, Surabaya, and Yogyakarta.

The company also said it aims to double its credit facility from external lenders, building on its US$12 million raise of debt facilities from DBS Indonesia and BRI in 2022.

In February last year, Broom secured US$3 million in pre-seed funding led by AC Ventures. Quona Capital and several angel investors, including Kopi Kenangan’s and Lummo’s co-founders, joined it.

To date, the opportunities provided by the used car industry have remained largely untapped. While Indonesia contributes approximately 30.6 per cent of new car sales in ASEAN, the country’s used-car market is even more substantial.

Used car transactions contribute up to 6x that of new car sales, resulting in a sizable US$65 billion industry. This market is primarily underpinned by the country’s 50,000+ dealerships, which are involved in at least 85 per cent of used-car transactions.

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