Dunzo, the quick-commerce startup based in Bengaluru, is reportedly in the final stages of securing a new funding round ranging between $25 million to $30 million. While the exact valuation of the company has yet to be determined, it has already garnered the participation of existing investors, including Reliance Retail, Google, and Lightrock.
Reliance Retail, in particular, holds a significant 25.8% stake in Dunzo, establishing itself as the single largest shareholder within the company. The strategic investment by Reliance Retail underscores the growing importance of quick-commerce and last-mile delivery services in the evolving retail landscape.
In a bid to stabilize its financial position, Dunzo is contemplating a reduction in its monthly expenditure to approximately $300,000. This cost-cutting measure involves streamlining its operations and potentially downsizing its workforce. This move comes in the wake of multiple challenges the company has been facing, including the delay in paying salaries to its employees and the need for layoffs.
Earlier this year, Dunzo deferred employee salaries, initially pushing them to the first week of October. However, due to ongoing financial constraints, the company has now postponed the salary disbursements to November. As part of this delay, Dunzo also committed to offering employees an annual interest rate of 12% on the withheld salary component from June onwards.
Moreover, Dunzo is embarking on a transformation of its business model. This transformation entails the closure of approximately 50% of its dark stores, which are small, hyper-local warehouses used for quick deliveries. Instead, the company plans to explore collaborative delivery partnerships with supermarkets and various other merchants.
In late December 2022, Dunzo had already taken steps to close down 20-30% of its dark stores in the Delhi-NCR and Hyderabad regions. The term "quick commerce" typically refers to the rapid delivery of groceries within 10-30 minutes, reflecting the company's focus on speedy delivery services.
Dunzo, headquartered in Bengaluru, recently concluded a financing round that raised $75 million through convertible notes in April. Prior to this, in January 2022, the company had secured $240 million in equity funding, led by Reliance Retail, which currently holds a significant 25.8% stake. Google is another major investor with approximately a 20% stake in the company. To date, Dunzo has successfully raised a cumulative total of $457.6 million across 19 funding rounds.
As Dunzo navigates these strategic shifts and secures additional funding, it aims to regain financial stability and strengthen its position in the competitive quick-commerce sector. The company continues to play a pivotal role in facilitating fast and convenient deliveries for consumers in various Indian cities.
