Dunzo retains core team of 50 after major staff reduction, highlighting its ongoing financial struggles.
The startup's attempts to secure new funding face hurdles as losses continue to climb significantly.
Amid mounting challenges, Dunzo shifts focus to B2B operations while grappling with legal issues and leadership changes.
Cash-strapped hyperlocal delivery platform Dunzo
has reportedly fired 150 staff in a fresh round of layoffs, leaving the company with only 50 headcount across supply and marketplace verticals.
This comes on the back of the Bengaluru-based startup grappling with financial crunch and seeking for more fundraise.
As per Mint’s report, Dunzo has been desperately trying to reduce its costs and extend the runway. As for that, it is frantically searching for capital to survive, while also trying to claw back profits to settle its mounting liabilities.
The company reported a staggering loss of INR 1,801 Cr in FY23, a substantial increase from INR 464 Cr in the previous fiscal year. This financial strain has led to delays in salary payments for both current and former employees, as well as outstanding dues to vendors.
The startup’s attempts to close a funding round of $22-25 Mn, initially reported to be in final stages in May, have hit roadblocks. Potential investors remain wary of Dunzo’s growth trajectory, prolonging the transaction closure.
The company has raised nearly $470 Mn to date, with Reliance Retail holding a 25.8% stake as the largest shareholder.
Dunzo’s financial troubles have also resulted in legal challenges. In July, a group of creditors filed an insolvency application against the company, alleging partial clearance of dues. Earlier, vendor Betterplace Safety Solutions approached the National Company Law Tribunal (NCLT) in Bengaluru over unpaid dues amounting to INR 4 crore.
The ongoing crisis has led to significant changes in Dunzo’s leadership and investor representation. Key investor Lightbox vacated its board seat in May, following earlier exits by representatives from Reliance Retail and Lightrock. Cofounders Dalvir Suri and Mukund Jha also departed from their board positions before leaving the company.
Founded in 2015, by Kabeer Khokan Biswas, Ankur Agarwal, Dalvir Suri, and Mukund Jha, Dunzo initially gained traction as a hyperlocal delivery service. However, its foray into quick commerce with Dunzo Daily led to a sharp increase in cash burn, forcing the company to scale back operations and pivot towards B2B deliveries.
