The struggling quick-commerce firm Dunzo witnessed a substantial increase in its losses, which soared to INR 1,801.8 crore in FY23. Despite this, its operational revenue surged more than fourfold, reaching INR 226.6 crore.
The company backed by Reliance Retail, which significantly reduced its operations and downsized its workforce throughout the year, experienced a notable increase in its total expenses, reaching INR 2,054.4 crore in FY23, compared to INR 531.7 crore in FY22. In the previous year, Dunzo had reported a loss of INR 464 crore, with operating revenue of INR 54.3 crore.
In FY23, employee benefit costs surged to INR 338 crore, compared to INR 138.3 crore in the preceding year. Similarly, advertising expenditures increased to INR 309.7 crore from INR 64.4 crore in the previous year, driven by the company’s advertising campaign during the Indian Premier League last year.
In recent months, investors have been closely scrutinizing Dunzo’s cash flow as the company faced challenges with debt terms and delayed salary payments for several months. They even resorted to using a payroll financing app to cover August salaries. Some portions of employee salaries for June and July have now been postponed until February of the following year.
Read More: Employees left in limbo as Dunzo postpones salary payments once more
Also Read: Dunzo turns to payroll financing app OneTap for August salary payments amid financial strain
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Meanwhile, the company witnessed the departure of five individuals from its board, including co-founders Dalvir Suri and Mukund Jha, along with representatives from investors Reliance Retail and Lightrock. Suri and Jha have completely exited the startup.
Read More: Dunzo Co-Founder Dalvir Suri announces departure after six years of service
Also Read: Dunzo’s leadership exodus continues: Co-Founder Mukund Jha steps down
The company, based in Bengaluru, has additionally released numerous employees, reducing its team size to approximately 200 from the initial count of over 1,000 at the start of the year. Reports indicate that it is currently in negotiations for a potential funding injection of up to $35 million from current investors, with some of them proposing a reduced valuation of around $200 million – which is just a quarter of its peak value of $800 million.
Dunzo has significantly scaled down its operations to only a few dark stores in its hometown of Bengaluru, while collaborating with partner stores in other locations. The anticipated new funding is expected to come with a condition that the company primarily concentrates on its B2B business, known as Dunzo Merchant Services. This segment provides last-mile delivery services to clients and boasts significantly healthier profit margins compared to its B2C operation.