Dunzo is a hyperlocal delivery startup valued at over $1 billion. According to reports, it is currently in advanced talks with its investors to secure nearly $50 million in a new funding round. Their existing backers, Reliance Retail and Google, are primarily holding the talks. The Indian start-up has been trying to secure funds between $70 Mn and $150 Mn for quite some time, according to ET reports.
The delivery startup is considering funding at a time when the Indian startup ecosystem is experiencing a funding winter marked by a significant drop in venture capital funding during the first quarter of 2023.
Dunzo layoffs, closure of dark stores, and funding
In January, Dunzo laid off 3% of its workforce. It did not disclose the exact number of employees impacted by the move. Reports suggest that the company affected around 60-80 employees. Due to low customer demand, the start-up also closed a few dark stores in Delhi-NCR and Hyderabad in November 2022. The decision was made to improve cost-effectiveness and enhance operational efficiency.
The delivery startup also secured $6.2 Mn in debt funding from BlockSoil India, a venture debt fund of BlockSoil, in November 2022.
In August 2022, they shifted its focus from 15-20 minute grocery delivery to 60-minute delivery as a cost-cutting measure. B2B logistics subsidiary of the brand named Dunzo-for-Business, recently became a part of the Indian government’s ONDC (One Nation One Delivery Chain) network to offer last-mile delivery services to local companies.
According to data from the startup funding database Crunchbase, The startup has raised more than $380 million to date from various investors. Among their investors are Alteria Capital, Lightbox, Krishtal Advisors, 3L Capital, Ranjan Patwardhan, Rich Ravi Agrawal, and Google, demonstrating their confidence in the company’s growth potential and ability to expand its services.
In the financial year 2022 (FY22), Dunzo’s consolidated losses soared 2X. It rose to INR 464 Cr from INR 229 Cr in FY21. However, its operating revenue rose 2.1X to NR 54.3 Cr in FY22 from INR 25.1 Cr in FY21.
In the quick commerce segment, Dunzo faces competition from Swiggy’s Instamart, Zepto, Tata-led BigBasket, and Zomato-led BlinkIt.
Dunzo’s Expansion and Sustainable Practices
Dunzo has expanded its services beyond delivering groceries, medicines, and food. It has expanded to include other services such as bike taxis, laundry, and salon services. In addition, the start-up has also partnered with several businesses to offer its services through its platforms. This includes Google Pay, PhonePe, and HDFC Bank. Their expansion into various services and partnerships with other businesses showcases its ambition. The ambition is to become a one-stop shop for hyperlocal services in India. With the new funding round, they can continue to expand its services, increase its market share, and compete with other players in the quick commerce segment.
The Hyoerlocal Delivery Brand has also made strides in adopting sustainable practices in its operations. In 2021, the company launched its “Red Dot” initiative. This aimed to make 100% of its delivery fleet electric by 2030. The Brand has already started piloting electric vehicles for its deliveries. Further, it also plans to scale up to a fleet of 10,000 electric vehicles by 2022. The company has also implemented eco-friendly packaging solutions for its deliveries to reduce waste and environmental impact. These efforts align with their commitment to creating a more sustainable future for India’s hyperlocal delivery industry.
In conclusion, the Indian startup ecosystem is facing a funding winter, and Dunzo’s current funding round is significant, given the prevailing market conditions. The brand has made several moves to optimize costs and drive operational efficiencies, including layoffs and closing some of its dark stores. Its B2B logistics subsidiary has joined the Centre’s ONDC network to provide last-mile delivery to local companies. Dunzo faces competition from several players in the quick commerce segment, including Swiggy’s Instamart, Zepto, Tata-led BigBasket, and Zomato-led BlinkIt. Dunzo’s financials for FY22 show increased operating revenue and a significant rise in consolidated losses.
