Dunzo, an Indian transportation, and hyperlocal services startup has raised $75 million in convertible notes from a group of investors that includes Lightbox, Google, Evolvence, LGT Lightstone, and 3L Capital. Dunzo was established in 2015 and provides a variety of delivery services, including food and groceries, medicines, and pet supplies, as well as home services such as repairs and cleaning. The business operates in several Indian cities and has experienced rapid growth in recent years, with its user base more than doubling in 2020 alone.
Despite this expansion, Dunzo has battled with profitability, losing around $20 million in the previous fiscal year. The recent funding round, worth approximately $800 million, will allow Dunzo to grow its operations and create new products and services. Several new initiatives have already been introduced by the company, including Dunzo Daily, a subscription service for daily necessities, and Dunzo Shops, which allows local shops to sell their goods online.
However, the funding round was accompanied by the announcement that Dunzo would be laying off approximately 30% of its staff. The business has not disclosed the precise number of employees affected, but reports indicate that it could be between 200 and 250. Kabeer Biswas, CEO of Dunzo, stated that the layoffs were essential to ensure the company’s long-term viability and sustainability.
Some have criticized the news of the layoffs, questioning why the business needed to raise such a large quantity of funding if it was also cutting jobs. Others, however, have supported Dunzo’s decision, pointing out that the pandemic has been difficult for many businesses, and that the company must make difficult decisions to ensure its survival. Overall, Dunzo’s funding round and layoffs paint a mixed image.
While the new investment will surely aid the company’s expansion and innovation, the layoffs serve as a reminder of the difficult decisions that many businesses faced during the pandemic. Dunzo will need to navigate these challenges carefully in the future if it is to create a long-term sustainable and profitable company.
