Dunzo, an Indian online delivery platform, has recently secured $75 million in funding through convertible notes as it embarks on a major revamp of its business model.
This new model will see the company cutting back on about 50% of its dark stores and only running those that are profitable or nearing profitability. To achieve this, the company plans to partner with supermarkets and other merchants.
This restructuring will also entail a significant reduction in the company’s workforce, with over 300 workers expected to be laid off. The decision was announced by Founder and CEO Kabeer Biswas at a town hall meeting held on Wednesday. The restructuring is seen as a necessary step to ensure profitability for the company in the next 18 months.
The funding for this revamp was provided by key backers Reliance Retail and Alphabet Inc, with other existing investors contributing the remainder. However, the company is also in talks with other investors, such as the Abu Dhabi Investment Authority (ADIA), but any additional funding may only come after certain metrics are met and the business stabilizes.
The move by Dunzo comes as demand for quick and efficient delivery of household goods continues to grow, with other players in the market also stepping up their efforts to ensure that orders are delivered in 15 minutes or less. Despite this competitive landscape, Dunzo remains committed to its vision and is taking bold steps to ensure its success.