Google-backed Dunzo defers salaries further to first week of September

Amid a severe cash crunch, Reliance-backed quick commerce firm Dunzo has deferred the salaries of some employees further to the first week of September, according to news reports.

Salaries for June, July and August are likely to be paid at the same time.

Earlier this month, the delivery firm had deferred the salaries of 50 per cent of its workforce of around 1,000 for June amid a severe cash crunch. It had promised to clear dues by July 20. It had also capped employee salaries at Rs 75,000, irrespective of their pay package.

The firm’s salary payouts have, however, been put on hold. It is, in fact, reportedly looking for additional fund infusion to tackle its cash flow woes.

Queries sent to Dunzo did not elicit any response.

In an email to employees on Wednesday, the company said that it would pay the July salaries for its team members on September 4 along with the August salary and looks to streamline cash flows and build a more sustainable business, media reports said.

Business Standard was unable to review the email.

Dunzo’s salary deferrals come even as the firm raised $75 million in funding through convertible notes in April this year, indicating its high cash burn rate.

The delivery platform had, at the same time, laid off around 30 per cent of its workforce or about 300 workers, CEO Kabeer Biswas had told employees as the firm looked to revamp its business model. Dunzo had previously let go of 3 per cent of its workforce — around 80 workers — in January as well.

To put a leash on expenses, the company has put in place a new marketplace business model. Under this, Dunzo has been focusing on sourcing its products directly from the nearest supermarkets and merchants to deliver to customers. It didn’t rely on the traditional dark-store model adopted by its competitors.

As a result, the company has shed its dark-store count by 50 per cent, focusing on stores that are profitable or nearing profit.

The company’s primary business Dunzo Daily, which has significantly scaled down operations, competes with Zepto, Zomato-backed Blinkit and Swiggy Instamart.

The Bengaluru-based firm has raised around $500 million in funding since its inception from the likes of Reliance — its largest investor with a 25.6 per cent share, and Google — its second-largest backer with around 19 per cent stake, according to data from Tracxn – a market intelligence platform.

Other notable investors of the delivery platform include Blume Ventures, Lightrock, Lightbox, and Alteria Capital, among others.

In FY22, Dunzo’s revenue stood at Rs 54.3 crore, up from Rs 25.1 crore in the previous year, according to a ministry of corporate affairs filing. The company’s loss, on the other hand, jumped twofold to Rs 464 crore in FY22, against Rs 229.1 crore in FY21.