Startup Dunzo, a hyperlocal delivery firm is reportedly in the late stages of securing a new funding round worth around $50 million. According to TechCrunch, existing backers such as Google and Reliance Retail are among those who are discussing investments in the new round.
The planned funding round is timely for Dunzo, which recently laid off 3% of its workforce. The move came just months after the company raised Rs 50 crore in debt from Blacksoil. To cut costs, the company has also closed some of its dark stores across India. Its competitor Blinkit has made similar moves.
The funding round is taking place at a time when many startups are struggling to raise new capital. As the global economy weakens, delivery startups, which are known for their high cash burn rate, are facing even greater challenges in securing new financing rounds.
Dunzo began life in 2014 as a WhatsApp group that allowed its founders to run errands and deliver products to members on demand. Google was one of Dunzo’s early investors, injecting $12 million as part of its Next Billion Users initiative. Other early investors included Blume Ventures and Aspada Ventures.
Reliance, which is also an investor in Dunzo, recently shut down its JioMart Express service. The service relied on Dunzo for last-mile delivery and used other delivery-based services.
Karthik Gurumurthy, who was responsible for Swiggy’s Instamart business, announced that he was leaving his role on Friday. Gurumurthy stated on LinkedIn that the development of Instamart had taken a toll on his physical and mental health.
However, the information about the funding talks has not been independently verified by startupstars.
Indian Startup Ecosystem highlights in March 2023
The Indian startup ecosystem produced mixed results in March. While total venture capital funding surpassed $1 billion thanks to Lenskart and PhonePe, employee layoffs continued to dampen the mood. In February, total capital inflows had dropped below $1 billion. The final week of March saw an inflow of $104 million, compared to $194 million in the previous week.
In summary, Dunzo’s reported new funding round will provide a boost to the hyperlocal delivery startup, which has recently cut costs and laid off staff. Despite the challenging funding environment for delivery startups, Dunzo’s existing investors, including Google and Reliance Retail, may be willing to support the company’s growth plans. Meanwhile, the Indian startup ecosystem has seen mixed results in March, with Lenskart and PhonePe driving venture capital funding above $1 billion, but employee layoffs remain a significant challenge.