Homegrown quick-grocery delivery provider Dunzo is set to raise $35 million in funding from existing backers like Reliance Industries and Google, alongside new investors, following salary delays, according to a media report.
The Arc, citing sources, reports that while the exact terms of the new financing, including valuation, are yet to be determined, Dunzo’s value is expected to dip below $800 million.
Financial Situation
Dunzo has amassed nearly $500 million in funding to date, with roughly $300 million secured since early 2022. However, the company finds itself facing a cash crunch, leading to delays in paying staff salaries and vendor bills since June.
The report indicates that Dunzo has undergone layoffs and business restructuring measures in response to its financial challenges.
Funding Resolution
The impending funding round aims to alleviate Dunzo’s cash flow constraints. If successfully closed this week, the company will be able to settle employee salaries and improve operational efficiency to some extent.
Salary Delays
Earlier this month, Dunzo announced further delays in employee salaries for June and July, pushing the payout timeline to November. This decision comes amid ongoing financial difficulties for the startup.
In an effort to reduce costs, Dunzo may also vacate its office space in Bengaluru, as mentioned by its co-founder and CEO, Kabeer Biswas.
Previous Financial Struggles
Previously, Dunzo postponed salary payments to the first week of October due to a lack of funds. It had also committed to compensating employees with a 12% annual interest on the withheld salary component from June.
In conclusion, Dunzo’s upcoming funding round holds promise for stabilizing its financial position and addressing the challenges posed by delayed salary payments and cash flow constraints.
