Dunzo is undergoing a significant transformation, though its brand’s survival remains uncertain. Since last October, the company has witnessed a series of drastic changes.
These changes range from altering the business model and laying off over 30% of its workforce to delaying salaries. There have also been disagreements over the company’s valuation. Despite these challenges, Dunzo managed to secure $35M in funding at an $800M valuation, a slight increase from its previous $775M valuation.
Interestingly, during its fundraising efforts earlier this year, Zepto did not list Dunzo as a competitor. The reason behind this omission has now become clear. Dunzo is in the process of shifting its business model. It is moving away from the loss-making B2C quick commerce model to focus on B2BC local commerce and the more profitable B2B sector.
Dunzo’s B2B business is already showing promising results, accounting for 50% of the company’s topline and achieving EBITDA profitability. This success has instilled confidence in existing investors such as Reliance Retail and Google, leading them to invest additional funds. They chose to do this despite Dunzo incurring losses of $60M in FY22.
A significant portion of Dunzo’s B2B business, around 20%, comes from JioMart. This figure is anticipated to increase to 50% in the near future. As Dunzo continues to evolve and integrate with larger platforms like JioMart, there is a possibility that the Dunzo brand might eventually fade away, much like what happened with Milkbasket.
This transition marks a critical juncture for Dunzo, as it navigates through these substantial changes in an effort to stabilize and secure its position in the market.
References:
- After salary delays, Dunzo to raise $35 mn from Reliance, Google – https://thearcweb.com/article/dunzo-raise-google-reliance-kabeer-biswas-salary-delay-employees-5aA3Alws7EKRb9nK/
- Reliance pulls plug on Milkbasket brand; more employees to exit – https://entrackr.com/2023/07/reliance-pulls-plug-on-milkbasket-brand-mass-layoffs-to-follow/
- Dunzo’s losses widen to Rs 464 Cr in FY22 while revenue doubles – https://entrackr.com/2022/11/dunzos-losses-widen-to-rs-464-cr-in-fy22-while-revenue-doubles/
- Disagreement Over Valuation Markdown Halts Dunzo Fundraising Plans – https://inc42.com/buzz/disagreement-valuation-markdown-halts-dunzo-fundraising-plans/
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