New Delhi: Instant commerce startup grappling with cash crunch Dunzo The company, which has been delaying salaries of its employees, has started fresh layoffs, which could affect around 200 people, according to sources aware of the discussions. When contacted, a Dunzo spokesperson declined to comment. CEO and co-founder Kabir Biswas did not respond to messages.
Last week, TOI had reported that the startup has deferred up to 50% of the salaries of some of its employees for the month of June. Dunzo is understood to have initially expected to distribute the remaining salaries for June to affected employees later this month, but has postponed the payment until September.
The development comes nearly three months after the Google and Reliance Retail-backed company laid off around 300 employees. Some Dunzo employees have attached the Open to Work badge to their LinkedIn profiles. Amidst a long funding winter and strict investor vigilance, startups are attempting to check their expenses and resort to cost-cutting measures to extend their runway. According to a recent analysis by PwC, funding for startups is set to decline to $3.8 billion in the first half of 2023 from $18.3 billion in the year-ago period.
Last year, Reliance Retail invested around $200 million in the Bengaluru-based company for a 25.8% stake. Competition in the instant commerce sector has intensified with the entry of players such as zepto while bigger rivals like swiggy instamart, backed by deep-pocketed investors, is investing billions of dollars in the instant commerce business. This model is cash intensive and it is difficult to drive business economics. Dunzo is also understood to be looking at restructuring after closing several of its stores in a bid to curb cash wastage. The company has raised over $450 million from investors in total.
Last week, TOI had reported that the startup has deferred up to 50% of the salaries of some of its employees for the month of June. Dunzo is understood to have initially expected to distribute the remaining salaries for June to affected employees later this month, but has postponed the payment until September.
The development comes nearly three months after the Google and Reliance Retail-backed company laid off around 300 employees. Some Dunzo employees have attached the Open to Work badge to their LinkedIn profiles. Amidst a long funding winter and strict investor vigilance, startups are attempting to check their expenses and resort to cost-cutting measures to extend their runway. According to a recent analysis by PwC, funding for startups is set to decline to $3.8 billion in the first half of 2023 from $18.3 billion in the year-ago period.
Last year, Reliance Retail invested around $200 million in the Bengaluru-based company for a 25.8% stake. Competition in the instant commerce sector has intensified with the entry of players such as zepto while bigger rivals like swiggy instamart, backed by deep-pocketed investors, is investing billions of dollars in the instant commerce business. This model is cash intensive and it is difficult to drive business economics. Dunzo is also understood to be looking at restructuring after closing several of its stores in a bid to curb cash wastage. The company has raised over $450 million from investors in total.