Exclusive: Dunzo In Advanced Talks To Raise $100 Mn In Series G

Bengaluru-based beleaguered hyperlocal delivery startup Dunzo is in advanced talks to raise $100 Mn in its Series G round of funding, according to sources. 

The startup is in talks to raise the funds from its existing investors, including Lightbox and Lightrock. However, Reliance Retail is not participating in the funding round, the sources told Inc42.

“Dunzo is finalising a funding between $80 Mn-$100 Mn in its Series G round. The round mostly comprises equity funding and can have a small debt element,” one of the sources said.

A mail sent to Dunzo seeking its response on the funding round didn’t elicit any response till the time of publishing this story. 

 The capital infusion will come as a breather for the cash-strapped Google-backed startup which has delayed salaries of its employees and received legal notices from many of its vendors for outstanding dues.

Dunzo claims it has been undertaking a major business model transition since October last year. It has been reducing its dark stores across India to cut costs and is instead partnering with retail stores to provide logistics services on a revenue-sharing model.

The fund infusion will help Dunzo pay the salaries of its employees and clear the pending dues of its vendors.

“The fresh round of capital will help the startup to move ahead. The capital will be utilised to achieve profitability in the coming six to nine months, scale its business, and strengthen its delivery network,” another source said. 

Earlier this year, Dunzo raised around $45 Mn via convertible notes from Google and Reliance Retail. 

The startup also laid off around 30% of its workforce, or around 300 employees, in April this year amid mounting losses and the changes in its business model. 

Dunzo’s net loss jumped over 2X to INR 464 Cr in the financial year 2021-22 (FY22) from INR 229 Cr in FY21. Operating revenue grew 2.1X to INR 54.3 Cr in FY22 from INR 25.1 Cr in FY21, while total expenses doubled to INR 531.7 Cr in FY22. 

Advertising and promotional expenses jumped almost 6X to INR 64.4 Cr during the year under review from INR 11 Cr in the previous fiscal year.

The fresh equity funding round will come almost 19 months after Dunzo raised $240 Mn in its Series F funding round, led by Reliance Retail Ventures Limited (RRVL). As per Inc42’s calculation, the startup was valued at $775 Mn in this round. However, the valuation for the new funding round couldn’t be ascertained.

RRVL picked up a 25.8% stake in Dunzo in the Series F round for $200 Mn. Existing investors Lightbox, Lightrock, 3L Capital, and Alteria Capital also participated in the round. 

Last month, Inc42 exclusively reported that another quick-commerce startup Zepto is about to turn unicorn with a $150 Mn Series E funding round at a valuation of $1.3 Bn.