Indonesian auto-financing startup Broom grabs $3M led by AC Ventures
Published on February 25, 2022
The auto-financing tech startup for dealer inventories has a bold plan to be at the center of digitizing the nation’s dealership network.
Broom, an auto-financing company that provides an end-to-end financial solution for auto dealer inventories, raises US$3 million in a pre-Seed Funding round led by AC Ventures. Quona Capital and several angel investors, including Founders of Unicorn startups in Indonesia, such as Kopi Kenangan and Lummo, also joined the round. The funding will be used to accelerate the company’s growth by improving customer experience with tech-based solutions through new products and services, expanding its presence in major cities in Indonesia, and doubling the team by the end of 2022.
Broom is uniquely positioned as a digital solution for auto-financing in the Indonesian mobility ecosystem. It provides a single platform for auto-SME to digitize their business processes, such as managing their inventories, getting access to financing, and managing their sell-side tools. The startup intends to be at the center of digitizing the dealership network eventually.
“Broom aims to be the first choice for used car dealers to develop their business by providing various products and services. With the support from the reputable investors who believe in our vision, it will boost our confidence to continue striving in our journey to empower used car dealers in Indonesia,” says Pandu Adi Laras, Co-Founder and CEO, Broom.
A new era of auto-financing
Auto dealers generally work very traditionally, with most stock counts being done on a whiteboard. While trying to go online, auto dealers find it quite challenging to sell on platforms and find the right buyers within their locations. Financing is generally quite challenging due to a lack of documentation. Still, auto dealers go to loan sharks for 6-week loans as they find it marginally profitable even with the significant interests given by these lenders (at an estimated 8% per month). With this condition, Broom aims to provide both dealer digitization and financing to empower auto dealers.
Broom provides dealers with three auto-financing solutions through its platform, starting from operational enhancements, online sales enablers, and access to financing. Broom’s productive financing offers a short-term loan facility with a competitive interest rate by partnering with financial institutions that provide low-cost financing. This allows customers to access loan facilities by utilizing their existing inventory as collateral with a fast approval process.
“As digital solutions penetrate every industry, embedded finance represents an enormous opportunity. The used car industry sees US$14 billion of annual transactions value, and MSME car dealerships represent over 80% with little to no access to affordable financing. Broom seeks to empower these dealerships with financial products and enablers to help them scale,” says Adrian Li, Founder & Managing Partner, AC Ventures.
A track record in mobility
The startup has a strong connection to dealers through the founders’ network, allowing Broom to capture many dealers quickly (especially in Jabodetabek and Java).
Pandu (CEO) is an experienced professional, and he was working as a COO of Go-Fleet. He has been in mobility since 2016, when he worked for Uber as an early employee. The other founders, Pungky Wibawa (CBO) and Andreas Sutanto (CFO) are seasoned entrepreneurs and well-connected within the dealership space, given Pungky’s status as owner of one of the largest BMW dealerships in Indonesia. The founders combine a deep understanding of the business and clarity on how technology can revolutionize the industry.
Currently, Broom has 2000+ used car dealerships in the Jabodetabek area and is optimistic about increasing the number as the company has promising partnerships with big financial institutions, such as BRI Finance, and BRI Insurance.
Indonesian wealth management app PINA bags US$3M seed round led by AC Ventures