In India, it used to be a verb that meant quick hyperlocal delivery. The explanation was straightforward: Dunzo quickly amassed millions of users and a billion-dollar valuation in 2016 by capitalising on a developing market need for quick and easy delivery of food, groceries, medications, and other necessities.
After then, everything has collapsed. The company Dunzo, founded by Kabeer Biswas, Ankur Agarwal, Dalvir Suri, and Mukund Jha, laid off 150 employees last week, leaving it with just 50 workers and a heavily leveraged balance sheet. According to industry sources, the company has not fulfilled a set of service level agreements, so two of its major investors—Google, with a 20% stake, and Reliance Retail, with a 25.8% stake—have refused to support it. The requirement that Dunzo achieve cash flow positivity was one of them.
Dunzo’s losses have increased dramatically from Rs 464 crore in FY22 to Rs 1,801 crore in FY23. Analysts stated that while the company’s FY24 financials are not yet available, cost-cutting measures may have helped reduce losses, but revenue declines would have also contributed to the company’s ongoing cash flow issues. Requests for comments from the company were met with silence.
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