Hyperlocal concierge app Dunzo is readying to fend off challengers such as Swiggy Stores, Grofers and BigBasket in the hyperlocal delivery space.
The Bengaluru-based company is close to securing INR 80 Cr ($11.5 Mn) in a Series C funding round led by Google, Blume Ventures, Alteria Capital, Greyhound, Beeline in this ongoing Series C round, a Ministry of Corporate Affairs filing showed.
While Google is investing INR 34.5 Cr, Alteria is investing INR 7 Cr. Blume Ventures, Beeline and Greyhound are investing about INR 6.9 Cr each in this round.
According to the Ministry of Corporate Affairs filings, Dunzo Digital Pvt Ltd, the parent company of Dunzo has issued 14,235 Series C CCPS worth INR 75.34 Cr and 500 non convertible debentures worth INR 5 Cr.
While Alteria Capital picked up 500 debentures to issue venture debt of INR 5 Cr, it also participated in the INR 75 Cr funding round with other investors.
The company has valued each share at INR 52,927.20, according to its valuation report dated February 15, 2019.
The company filings showed that the funds have been raised for the furtherance of the business and in accordance with the business plan in order to achieve the purposes such as setting up of infrastructure and routine operations and for the purpose of product development of the company.
Related Article: Hyperlocal Services Startup Dunzo May Raise $50 Mn In Fresh Funding
Dunzo: Changing The Hyperlocal Game
Dunzo was founded in 2015 by Ankur Aggarwal, Dalvir Suri, Mukund Jha, and Kabeer Biswas, and is an AI-driven chat-based hyperlocal services app which enables users to create to-do lists and collaborate with partners (vendors) to get them done.
It leverages AI to provide vendors for shipping of packages, buying products, repairing stuff, and home services. Users can also get their personal tasks done through the app, which may include anything from paying bills, getting car services, repairing things among many more.
As of October 2018, Dunzo claimed to have completed over 1 Mn transactions with an average of 30K transactions per day mainly from four cities — Gurugram, Hyderabad, Pune and Chennai.
Hyperlocal: Is It Just Delivery?
The consumer services segments saw a hyperlocal bubble during the 2015-16 period. The abundance of ‘me-too’ startups (at the time, there were 400 startups recorded), low margins, as well as losing investor’s trust made more than 100 startups shut shop in the said period.
Among those who lost in the hyperlocal bubble included: Flipkart’s grocery delivery division Nearby; Ola’s food delivery service ‘Ola Cafe’ and grocery delivery service ‘Ola Store’; on-demand grocery delivery startup PepperTap rolled back its consumer-centric grocery app and pivoted to a full-stack ecommerce logistics company and Helpchat also did yet another pivot closing its entire chat-ops to move towards a chat-less service. Even Grofers rolled back their operations from several Tier 2 cities to cut down the operational costs.
Now the consumer services segment is again filled with the hyperlocal players which are claiming to ensure there is nothing a consumer can do with a tap on the phone. Today, food, medicines, grocery, salon services, carpenters, musicians, teachers, gifts and so much more is available for a user to choose and get delivered in the comfort of their own homes or offices.
A report titled “India Hyperlocal Market Outlook to 2020 – Driven by Rising Startups Firms and Fluctuating Investments” by market research firm Ken Research, has predicted that the Indian hyperlocal market will grow to reach over $317.4 Mn (INR 2,306 Cr) by 2020.
Recently, food delivery company Swiggy forayed into the delivery of an on-demand hyperlocal category, from flowers and vegetables to health and supplements, with the launch of ‘Swiggy Stores’ integrated within the app.
The service is currently available in Gurugram with Swiggy claiming to be collaborating with more than 3,500 stores in the national capital region, including merchant-partners like Ferns and Petals, Le Marche, Needs Supermarket, Licious, Zappfresh, MomsCo, Apollo and Guardian Pharmacy — while also helping them drive their order volumes through the platform.
Many other players such as DoneThing, Haptik, HelpChat, Hike-owned personal assistant bot Natasha are also looking to strengthen their presence in the hyperlocal space.
Online travel company MakeMyTrip had also begun offering hyperlocal services through its newly launched feature ‘Experiences’. Through this feature, the company offers leisure activities such as food walks, daycation, museum visits, and sporting events.
As the comfort becomes a major selling point for the consumer services market, investor attention and trust is back in the hyperlocal space. Should we fear a bubble burst soon or is it finally the time for the hyperlocal market to bloom and bring back results?
Dunzo was part of the 2018 edition of the coveted list of India’s most innovative startups — 42Next by Inc42.