Exclusive: Dunzo Issues INR 19.5 Cr Worth Warrants To BCCL

Bengaluru-based hyperlocal delivery startup Dunzo has allotted warrants to Bennett Coleman and Company Ltd (BCCL). 

According to regulatory filings accessed by Inc42, Dunzo is allotting 5 warrants valued at INR 19.5 Cr at a subscription amount of INR 1.95 Cr to BCCL. BCCL will be holding 0.90% on a fully diluted basis in Dunzo. Dunzo is also allotting one equity share at an issue price (including premium) of INR 1.13 Lakh to BCCL. 

The filings reveal that BCCL can exercise the warrant amount in six years and can get an equivalent number of fully paid up equity shares of  Dunzo. 

For the uninitiated, a share warrant gives the holder the right to purchase a company’s stock at a specific price and at a specific date. This is mostly a pre-decided investment, where now they have invested in equity on the pre-decided amount. 

Founded by Dalvir Suri, Mukund Jha, Kabeer Biswas and Ankur Aggarwal in 2015, hyperlocal delivery startup Dunzo competes with the likes of Swiggy’s InstaMart, Grofers, and BigBasket which are trying to deliver grocery items in less than half an hour.

In June, Dunzo launched ‘Dunzo Daily’ to deliver essential products within 19 minutes. The startup is aiming to set up 250 dark stores to increase its presence in 700 neighbourhoods across the country. 

Swiggy’s Instamart claims to deliver grocery products within 15-30 mins whereas, Grofers has recently started 10 minutes grocery delivery in 10 cities including Delhi, Mumbai, Bengaluru, and others. 

In FY21, Dunzo recorded INR 590 Cr in gross merchandise value, which is a 1.6X growth compared to INR 260 Cr worth gross merchandise sold in  FY20. The startup had then said that its qCommerce (quick commerce) model which uses dark stores registered a gross merchandise sales of INR 267 Cr during Q1FY22, which is a 1.9X QoQ growth compared to the previous quarter Q4 of FY21. 

As per a RedSeer report, the quick commerce market in India is expected to reach $5 Bn by 2025 from the current $0.3 Bn. 

Earlier this year, Dunzo bagged $40 Mn in Series E funding round from its new and existing investors including Google, Lightbox, Evolvence, Hana Financial Investment, LGT Lightstone and others. Multiple reports suggest that Swiggy is eyeing to acquire Dunzo to strengthen its InstaMart arm.

Last year, Inc42 exclusively reported that  five share warrants held by BCCL in Rebel foods were converted into 714 equity shares worth INR 16.25 Cr ($2.2 Mn). In April of 2020, Bengaluru-based furniture retailer Urban Ladder had issued 5 warrants to  BCCL at a value of INR 97.5 Lakh.