Dunzo, the quick commerce startup backed by Reliance Retail, has recently received a substantial funding boost of $75 million through convertible notes. According to sources familiar with the matter, Google and Reliance Retail will be contributing $50 million to the funding round, while the remaining amount will come from existing investors.
However, the company has also announced plans to lay off over 300 employees, which amounts to about 30% of its workforce. This decision was conveyed to employees during a town hall meeting held on Wednesday. The company is also expected to shift its business model.
Convertible notes are a type of short-term debt that can be converted into equity at a later stage. With this funding, Dunzo aims to expand its operations and strengthen its position in the highly competitive quick commerce market.
Dunzo was founded in 2015 in Bangalore, India, with the goal of providing on-demand delivery services to customers. The company has since expanded to several other cities in India, including Mumbai, Delhi, Hyderabad, and Chennai. It has also ventured into other businesses, such as bike taxi services and grocery deliveries.
However, the COVID-19 pandemic has had a significant impact on the company’s operations, as it has for many other businesses worldwide. The lockdowns and restrictions imposed in many Indian cities have led to a decrease in demand for Dunzo’s services. As a result, the company has been forced to re-evaluate its business strategy and cut costs.
The decision to lay off over 300 employees is undoubtedly a difficult one, but it is a necessary step for the company to remain financially sustainable. The shift in business model is also expected to help Dunzo adapt to the changing market conditions and better serve its customers’ needs.
