Reliance-backed Dunzo lays off 30% of workforce

Reliance-backed delivery firm Dunzo is laying off 30% of its workforces, affecting nearly 300 people, according to sources. In January, the firm had announced letting go of 3% of its workforce, citing efforts to build efficiency into its teams. 

The delivery firm has also reportedly raised $75 million through convertible notes. Of this $75 million, existing investors Google and Reliance are pumping in about $50 million, the report added.

Entrackr has reached out to Dunzo for more details on the move. 

Dunzo, which competes with the likes of Blinkit and Zepto, has been making efforts to trim costs as the late-stage startups continue to grapple with the so-called ‘funding winter’. It’s worth noting that Dunzo raised $240 million in a round led by Reliance Retail in January last year. Previously, it raised capital from the likes of Google, Alteria Capital, and Lightrock.

The hyperlocal quick delivery startup burnt (EBITDA loss) over Rs 176 crore in June 2022, whereas, monthly expenses translated into the company’s core business (Dunzo Daily) losing Rs 230 on each order it delivered during the first half of 2022 or H1 2022.

In November 2022, the company had shut down a few dark stores in Delhi-NCR and other regions. It had also laid off 25% to 35% of its staff from dark store teams. The affected employees include people on payroll as well as contractual. 

Dunzo’s revenue from operations grew over 2X to Rs 54.3 crore in FY22. Its losses, however, spiked 2X and crossed the Rs 460 crore mark. Dunzo’s annual expenditure and losses closely tracked revenue growth to bloat 2X to Rs 532 crore and Rs 464 crore respectively in FY22.

Coming to ratios, EBITDA margin and ROCE are registered at -645.64% and -31.95%. On a unit level, Dunzo spent Rs 9.8 to earn a rupee of operating revenue in the fiscal year ending March 2022.