Dunzo Secures $6.2 Mn Debt Funding From BlackSoil

SUMMARY

Dunzo issued 1,000 non-convertible debentures at a price of INR 5 Lakh apiece to raise INR 50 Cr from BlackSoil

The development comes a few days after Dunzo closed down some of its dark stores across NCR and Hyderabad to optimise cost

Earlier this year, Dunzo secured $240 Mn from Reliance Retail, which ended up acquiring a 25.8% stake in the startup

Quick commerce startup Dunzo has reportedly secured $6.2 Mn (INR 50 Cr) debt funding from BlockSoil India. According to its regulatory filings, Dunzo issued 1,000 non-convertible debentures at a price of INR 5 Lakh apiece to raise INR 50 Cr from BlackSoil.

The development comes a few days after Dunzo closed down some of its dark stores across NCR and Hyderabad to optimise cost.

In August, Dunzo was reported to have shifted its focus from quick delivery to 60-minute delivery as a cost-cutting measure. During that time, it reported a monthly burn rate of nearly $15 Mn.

In the same month, its B2B logistics subsidiary Dunzo for Business (D4B) joined Open Network for Digital Commerce (ONDC) to offer last-mile delivery services to local enterprises.

In the financial year 2021-22 (FY22), its losses rose 2x to INR 464 Cr as compared to INR 229 Cr in FY21. Its operating revenue climbed 2.1x to INR 54.3 Cr in FY22 against INR 25.1 Cr in FY21.

Earlier this year, it secured $240 Mn from Reliance Retail. As part of the deal, Reliance Retail acquired a 25.8% stake in the startup.

Interestingly, Dunzo has raised funding at a time when the Indian startup ecosystem is dealing with a funding crunch and seeing negative market sentiments. At the moment, investors are only eyeing early-stage startups and, meanwhile, directing growth and late-stage startups to focus on revenue generation.

Seeing this, many startups are grappling for survival and opting for extreme cost-cutting measures such as closing down low-revenue generating verticals, pivoting their business models and laying off employees. According to an Inc42 analysis, over 15k employees have been sacked by 44 Indian startups so far this year.

Amid the ongoing financial crisis, some startups have begun securing debt funding for survival. Recently, B2B ecommerce startup Udaan bagged an undisclosed amount of debt funding from EvolutionX Debt Capital.

Earlier this month, PharmEasy’s parent company API Holdings also received debt funding from EvolutionX Debt Capital. Prior to that, fintech startup Aye Finance secured INR 87 Cr ($10.6 Mn) debt funding from Swiss impact investor BlueOrchard.

The development was first reported by Entrackr