Dunzo faced a substantial increase in losses, soaring to Rs 1,802 crore in FY23, notably up from Rs 464 crore in the previous fiscal year. Despite an almost fourfold surge in expenses, their revenue rose slightly from Rs 54 crore to Rs 227 crore, attributing a 319% year-on-year growth. The elevated expenditures were largely influenced by escalated advertising costs, which mounted to Rs 310 crore in FY23, significantly higher than the Rs 64 crore spent in the entire previous fiscal year. These expenses were supported by the company’s IPL marketing efforts but only yielded a marginal revenue increase.
Employee benefit expenses surged to Rs 338 crore in FY23 compared to Rs 138 crore in FY22, reflecting Dunzo’s expanded workforce, albeit possibly declining in the current fiscal year. However, the company experienced financial struggles post-July, delaying salaries, reducing staff, and relinquishing office spaces to manage cash flows. The situation was compounded by various legal notices from vendors and the departure of several high-ranking executives, including two co-founders.
Amid these financial challenges, Dunzo is in the process of fundraising, with expectations to secure $25-30 million in capital; however, the investment may occur at a lower valuation. Tracxn data indicates that the company has garnered close to $500 million in funding since 2015 from notable investors, including Reliance, Google, Lightrock, Lightbox, and Blume Ventures. Reliance holds the largest stake at 25.8%, with Google following at around 19%.
The broader industry context shows rival companies also experiencing growth with Blinkit, Zepto, and BigBasket observing revenue escalations, despite augmented losses. However, detailed financial reports from Swiggy for FY23 are yet to be disclosed.
This data underscores the financial situation and competitive landscape of Dunzo in the context of the larger Indian market for rapid delivery and e-commerce.
