Jobaaj Stories
Reliance Retail-backed q-commerce startup Dunzo has reportedly raised $75 million through convertible notes. Moreover, the company is also sacking 30% of its workforce in a bid to revamp its business model.
For the unversed, Dunzo is a hyper-local delivery app which provides delivery services for packages, food, groceries, medicines, etc. It assists MSMEs in facilitating e-commerce sales. The company operates in Bangalore, Pune, Mumbai, Gurugram, New Delhi, Jaipur, Chennai and Hyderabad.
Also read: Unacademy fires 380 employees in 4th layoff round
The company is backed by several investors such as Alteria Capital, Google, Lightbox, Hana Financial Investments and LGT Lightstone. Moreover, Reliance Retail is also an investor in the company as it acquired 25.8% in the company for $240 million in January 2022.
In this round of fundraising, Google and Reliance Retail are investing $50 million, while the other investors are investing the balance via convertible notes. Since the company does not require a valuation using this tool, it has been popular with Indian startups.
Under the proposed new business model, Dunzo will be reducing 50% of its dark stores to focus on running only those stores which are profitable or approaching profitability. Some reports suggest that this aggressive layoff was under the company's plans to turn profitable in the next 18 months.
Although the company is looking for more investors to bring in capital, it is believed that the same won't be available until the company's position improves. In FY22, the company had a loss of Rs 464 crores!
At the time of Reliance Retail's investment in Dunzo, Kabeer Biswas, Co-founder and CEO of Dunzo, expressed his intention to take Dunzo public in 2-4 years. No other news regarding the company's IPO is known.
- Aman Agarwal
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