Dunzo Cuts 150 Employees Amid Financial Challenges

In a recent move, the hyperlocal delivery service Dunzo has laid off 150 employees, leaving the company with just 50 staff members in its supply and marketplace divisions.

This decision is part of Dunzo's ongoing struggle with financial difficulties and its efforts to obtain additional funding.

Mint reports that Dunzo has been working to reduce costs and stabilize its finances. The company is actively seeking capital to maintain its operations and manage its increasing liabilities.

The Bengaluru-based firm reported a significant loss of Rs 1,801 crore for FY23, compared to a loss of Rs 464 crore the previous year. This financial pressure has led to delays in salary payments for current and former employees, as well as unpaid dues to vendors.

Dunzo's attempts to finalize a funding round of $22-25 million, initially expected to conclude in May, have faced setbacks. Potential investors are wary of Dunzo’s growth prospects, causing delays in completing the deal.

To date, Dunzo has raised nearly $470 million in funding, with reliance Retail being its largest shareholder with a 25.8% stake.

The company's financial woes have also led to legal issues. In July, a group of creditors filed an insolvency petition against Dunzo, claiming partial settlement of dues. Earlier, vendor Betterplace Safety Solutions had lodged a complaint with the National Company Law Tribunal (NCLT) in Bengaluru over unpaid dues totaling Rs 4 crore.

The financial strain has prompted significant changes in Dunzo’s leadership and investor representation. Key investor Lightbox left its board seat in May, following exits by representatives from reliance Retail and Lightrock. Additionally, co-founders Dalvir Suri and Mukund Jha stepped down from their board roles and departed from the company.

Founded in 2015 by Kabeer Khokan Biswas, Ankur Agarwal, Dalvir Suri, and Mukund Jha, Dunzo initially rose to prominence as a hyperlocal delivery service. However, its expansion into quick commerce through Dunzo Daily led to increased cash expenditure, forcing the company to scale back and refocus on B2B deliveries.
For more interesting updates wa click and follow Indiaherald WhatsApp channel

Find out more:

#Dunzo

Sudha Subbiah

02/09/2024 07:24 PM