Dunzo is a rapidly growing hyperlocal delivery startup based in Bengaluru, India. The company has been seeking to raise capital for several months and is now reportedly in the final stages of securing around $50 million in a new financing round, according to anonymous sources familiar with the matter.
Among the investors currently in discussions to invest in the new funding round are Google and Reliance Retail, who are already existing backers of the company. While Dunzo had previously aimed to raise between $70 million and $150 million, it appears that the funding deliberations are primarily moving ahead with existing backers.
Dunzo faces fierce competition in India’s retail market, with competitors such as Swiggy’s Instamart, Zepto (backed by YC Continuity), BigBasket (owned by Tata), and Zomato’s BlinkIt all vying for a slice of the growing market, estimated to be worth over $800 billion by 2025. As a result, Dunzo has been working hard to secure funding amid a challenging economic climate.
Karthik Gurumurthy announced on Friday that he is stepping down from his position as the head of Swiggy’s Instamart business. Building Instamart has been “arduous with a lot of compromises on physical and mental wellbeing,” he wrote in a LinkedIn post.
The difficulties in raising new financing rounds are not limited to Dunzo, with delivery startups around the world experiencing similar challenges. In Europe, the rapid delivery market has consolidated down to just three companies, while Instacart has recently reduced its internal valuation from $39 billion to $10 billion. The current economic downturn has hit delivery startups particularly hard, given that they are often among the most cash-intensive businesses.
While the funding round is still ongoing, the news of Dunzo’s potential capital raise is undoubtedly welcome news for the company, which will undoubtedly help it expand its operations and continue to compete in India’s highly competitive retail market.
Kabeer Biswas, Dunzo’s Co-founder and CEO, declined to comment on the matter, and both Google and Reliance Retail did not respond to requests for comment.
