Lightbox, the key investor of cash-strapped hyperlocal platform Dunzo, has stepped down from its board seat,adding to the challenges faced by the startup as it grapples with financial difficulties.
With an 11.1% stake, Lightbox stands as the platform’s third-largest shareholder, trailing behind Reliance Retail (25.8%) and Google India (19.3%). However, Lightbox’s latest decision to step down from its board seat represents a significant shift, leaving Dunzo without a representation from any of its primary investors.
According to Moneycontrol, the sequence of board exits began in 2023. Between the months of August and October, Reliance Retail and Lightrock executives resigned from their board positions. In addition, former Lightbox partner Siddharth Talwar announced his resignation from the board in August 2023.
Dunzo cofounders Dalvir Suri and Mukund Jha also vacated their board seats before departing the company. The current board comprises cofounder and CEO Kabeer Biswas and STIC Investments’ Hongjim Kim.
Continue Exploring: Dunzo’s leadership exodus continues: Co-Founder Mukund Jha steps down
Established in 2015 by Kabeer Biswas, Dalvir Suri, Mukund Jha, and Ankur Aggarwal, Dunzo serves as a platform connecting consumers with local stores and enabling deliveries of various essentials such as groceries, medicines, and food, catering to everyday requirements.
As reported last year, its venture into the quick commerce realm with Dunzo Daily resulted in a significant surge in its cash expenditure, placing the company in a precarious position.
Due to its fragile financial condition, Dunzo has become ensnared in a barrage of legal notices from vendors. Google India, Nilenso, Clover Ventures, Facebook India, Cupshup, Koo, and Glance are among the vendors collectively owed approximately INR 11.4 Cr.
Continue Exploring: Legal troubles mount for struggling Dunzo as companies seek payment resolution
The financial pressure on the Bengaluru-based quick commerce startup is apparent from its fiscal year 2023 figures. Dunzo suffered a significant loss of INR 1,801 Cr in FY23, marking a notable rise from INR 464 Cr in the previous fiscal year.
A number of employees have raised concerns regarding the non-payment of salaries and the delay in final settlements for those who were let go.
Continue Exploring: NCLT warns Dunzo of moratorium over unpaid dues worth INR 4 Cr
Despite a 317% growth in operating revenue to INR 226.6 Cr in FY23, the company faced significant expenses while investing in the quick commerce model. Consequently, Dunzo has largely scaled back its quick commerce operations and shifted focus to B2B deliveries, moving away from its previous dominance in hyperlocal deliveries.
