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Business News/ Companies / News/  Dunzo delays November salary amid cash crunch: Report

Dunzo delays November salary amid cash crunch: Report

Dunzo has also deferred full and final payment to its laid-off employees

Dunzo delivery appPremium
Dunzo delivery app

Google-backed Dunzo has reportedly not paid salaries of employees in November amid severe cash crunch issues, the Hindu Business Line reported. In the past few months, the hyperlocal quick e-commerce firm laid off more than 30% of its workforce. At the beginning of 2023, the troubled quick commerce startup had more than 1,000 employees and since then the company has undertaken three rounds of layoffs. Dunzo has fired about 300 employees in the first half of this year as part of cost-cutting measures.

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The logistics and delivery firm has also not cleared dues of its other existing employees, the Financial Daily reported.

Moreover, the Bengaluru-based startup has also deferred full and final payment to its laid-off employees. In October, PTI agency reported, citing sources that Dunzo had planned to settle dues of former employees in the next three months.

Dunzo seeks to raise $35 million in rights issue at a slashed valuation of $200 million: Report

Dunzo is planning to shut 50% of its dark stores. In 2022, the company closed 20-30% of its dark stores in Delhi-NCR and Hyderabad.

Dunzo's cash crunch report has come at a time when the company has tied up with OneTap, a revenue financing firm, in August.

In October, co-founder Dalvir Suri has also reportedly quit the company.

This year in April, Dunzo closed a $75-million financing round through convertible notes.

Dunzo co-founder quits, company to undergo organisation-wide restructuring

The company had previously raised $240 million in equity funding in January 2022. Reliance Retail has a 25.8% stake in Dunzo while Google has about 20% stake.

The company in total has raised around $457.6 million across 19 rounds of funding.

Dunzo delays salary further, opts for batch payments amid fundraising challenges

However, the company's auditor Deloitte during the regulatory filing cast doubt on the company being a going concern after net loss ballooned to 1,802 crore in FY23, which is a 288% increase from the previous year.

Last month, Dunzo migrated all its employee accounts to Zoho workspace from Google, to bring down costs by at least a third. The company had previously let go of its Bengaluru office as well.

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Published: 08 Dec 2023, 09:19 AM IST
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