 "Dunzo")
Dunzo, the quick commerce and logistics player, has received two to three term sheets from investors, aiming to raise Rs 300-400 crore, even as it faces its second top-level exit. Discussions regarding the raised funds are still ongoing, according to sources familiar with the matter.
The sources also added that Reliance has informed the founders that they do not plan to acquire the company or increase their equity stake further. However, they are willing to support any fundraising efforts.
“Reliance already holds a 26 per cent stake in the company and has no plans to increase it further. Nevertheless, they have assured the company of their support for any fundraising and might consider contributing to cover any gaps in the overall fundraise,” informed a source. However a query to Reliance did not elicit any response.
The firm had previously secured around Rs 300 crore from Reliance and Google to sustain its operations, which, sources say, will enable it to continue for another three to four months.
Reliance- and Google-backed Dunzo is on track to witness its second top-level departure in the form of Mukund Jha, the firm’s co-founder, and chief technology officer. Simultaneously, the company has, once again, deferred employee salaries by an additional three months, sources report.
This development comes a day after Dalvir Suri, another co-founder of Dunzo, announced his departure from the company after joining ranks in 2015.
In response to Business Standard’s queries, a spokesperson for Dunzo said: “Mukund remains an integral part of Dunzo’s leadership team. While we are restructuring the organisation with new leaders driving key initiatives, Mukund will continue to be an essential part of the strategic leadership team guiding and directing Dunzo’s road map.”
Although Jha’s departure has not been officially announced, he has reportedly stepped back from day-to-day operations at the company, and an announcement regarding his next move is anticipated in the coming weeks.
Both Jha and Suri have resigned from the company’s board. Jha did so on September 1, while Suri stepped down earlier on August 29, according to media reports.
In the past two months, the Bengaluru-based startup has reportedly witnessed five exits from its board of directors. Apart from Suri and Jha, these include Ashwin Khasgiwala and Rajendra Kamath of Reliance Retail, and Vaidhehi Ravindran of Lightrock, all of whom left in August.
Sources suggest that some investors with board members took this action to avoid facing additional liabilities beyond being minority investors.
Industry sources also added that Reliance representatives on the board have stepped down to ensure they bear no liabilities if the fundraise does not materialise. An email was sent to Reliance asking if they would nominate replacements and the reasons for stepping down; however, it did not elicit any response.
Consequently, Dunzo’s board now comprises only the firm’s co-founder and Chief Executive Officer Kabeer Biswas, Siddharth Talwar of Lightbox Ventures, and Hongjin Kim of STIC Investments.
Notably, Jha and Suri, alongside co-founder Ankur Aggarwal, have no ownership in Dunzo, while Biswas possesses a 3.6 per cent stake in the company.
Amidst these exits and an ongoing liquidity crunch, Dunzo has once again deferred the salaries of its employees, this time until as late as February 2024.
“It appears that a new team will be created to run Dunzo as new investors come on board. Discussions on fundraising are still underway,” said a source in the know.
The on-demand delivery startup had previously deferred the June and July salaries of over 50 per cent of its 1,000-strong workforce to the first week of September. It also capped employee salaries at Rs 75,000, regardless of their pay package.
Last month, the financially strapped firm once again delayed employee salaries, extending the period to November.
In an email sent by Dunzo, employees who have left the company have reportedly been informed that their pending payouts will be cleared by January or February next year, with a promise of a 12 per cent interest per annum on the service period.
Since its inception, the company has raised around $500 million in funding from investors such as Reliance (its largest investor with a 25.6 per cent share) and Google (its second-largest backer with around a 19 per cent stake).
Another significant investor is Lightrock, which owns 8.6 per cent of the company, according to data from Tracxn, a market intelligence platform.
Other notable investors in the delivery platform include Blume Ventures, Lightbox, and Alteria Capital, among others.
