Bengaluru: On-demand task management app Dunzo is in the final stages of closing a $15-20 million funding round, according to three people familiar with the matter. A new strategic investor is expected to pump in money along with existing backer Google, which is expected to invest on a pro-rata basis, one of the persons mentioned above said, requesting anonymity.
News of the funding comes at a crucial time for Dunzo as the competition in the hyperlocal delivery space has intensified. Food delivery platform Swiggy recently announced its foray into delivering products beyond food to better utilize its delivery fleet. If the investment in Dunzo goes through, it may give the company a slight impetus to compete with Swiggy, which recently secured $1 billion in funding.
“These are capital-intensive businesses and funding is like oxygen for them," said one of the investors in the grocery-delivery space, requesting anonymity. “Dunzo has carved out a position for itself, especially with non-routine deliveries, but Swiggy would probably eat into Dunzo’s share when it comes to standardized deliveries such as groceries," the person said.
Google did not immediately respond to queries sent by Mint.
Dunzo declined to comment on its fundraising plans.
Dunzo, launched on WhatsApp in 2015 by Kabeer Biswas, Ankur Aggarwal, Mukund Jha, and Dalvir Suri, provides a platform for consumers to be able to get tasks done and products delivered. It is present in six cities, including Bengaluru, Hyderabad and Gurgaon. During October 2018, it claimed to have crossed one million transactions.
To further utilize its fleet in these six cities, the business-to-consumer company recently forayed into business-to-business services too, according to two people familiar with the matter. The idea is to provide logistics services to businesses and increase revenue contribution in this high capital-burn business.
“Through this service, Dunzo allows an API integration onto the other businesses’ platform, which lets the company request for a delivery agent, as and when required," said one of the persons cited above, requesting anonymity.
A Dunzo spokesperson confirmed this development. “Dunzo Business is one of the fastest growing parts of our business," she said. “Dunzo is enabling businesses of all sizes to come online without having to develop and manage their own logistics."