SUMMARY
- Hyperlocal delivery platform Dunzo has terminated 150 more employees.
- Its workforce now stands at just 50 employees across its supply and marketplace divisions.
- The company has been struggling with financial constraints and its ongoing efforts to secure additional funding.
In a recent development, the hyperlocal delivery platform Dunzo has terminated 150 more employees, with its workforce now standing at just 50 employees across its supply and marketplace divisions.
This decision comes amidst the company’s struggle with financial constraints and its ongoing efforts to secure additional funding.
According to a report by Mint, Dunzo has been actively seeking to cut costs and extend its financial stability. This has necessitated a search for capital to sustain its operations and to address its growing liabilities.
The Bengaluru-based company reported a substantial loss of Rs 1,801 crore in FY23, a significant increase from a loss of Rs 464 crore. This financial strain has resulted in delays in salary payments for both current and former employees, as well as unpaid dues to vendors.
Dunzo’s attempts to finalize a funding round of $22-25 million, initially reported to be in the final stages in May, have encountered obstacles. Potential investors remain skeptical of Dunzo’s growth prospects, thereby prolonging the process of closing the transaction.
To date, Dunzo has secured nearly $470 million in funding, with Reliance Retail holding a 25.8% stake as its largest shareholder.
Moreover, Dunzo’s financial difficulties have led to legal disputes. In July, a group of creditors filed an insolvency petition against the company, alleging that there has been a partial settlement of dues. Earlier, vendor Betterplace Safety Solutions lodged a complaint with the National Company Law Tribunal (NCLT) in Bengaluru over unpaid dues amounting to Rs 4 crore.
The current crisis has also necessitated significant changes in Dunzo’s leadership and investor representation. Key investor Lightbox vacated its board seat in May, following exits by representatives from Reliance Retail and Lightrock. Additionally, cofounders Dalvir Suri and Mukund Jha left their board positions before departing from the company.
Established in 2015 by Kabeer Khokan Biswas, Ankur Agarwal, Dalvir Suri, and Mukund Jha, Dunzo initially gained popularity as a hyperlocal delivery service. However, its expansion into quick commerce through Dunzo Daily led to a rapid increase in cash expenditure, compelling the company to scale back its operations and shift its focus towards B2B deliveries.
