After a difficult year characterized by profitability concerns and a liquidity shortage, Google-backed Dunzo aims to fulfill overdue payments to former workers by March 30th, the rapid commerce company announced in an email to its staff this week.
“We certify that we will pay off the debt by March 30, 2024, as planned. Mint was able to view the email,” which stated, “We acknowledge that we were not able to keep our committed timeline in the past; however, we assure you that there will not be any further delay.“
The acknowledgment follows Dunzo‘s financial difficulties, which included its failure to pay salaries in November and the layoff of over 30% of its staff in an attempt to reduce costs. The Bengaluru-based business has postponed paying its creditors, vendors, and laid-off employees.
“We are confident in meeting this timeline based on the progress we have made in the funding process, and we will ensure that we keep our commitment,” the business stated in its memo. “We completely understand that dues have not been settled in the ideal time, and this delay must have been exhausting for you emotionally and financially.“
The first person to report on this development was Yourstory. When Mint asked for comment, the corporation didn’t answer right away.
The company has taken several steps to control costs over the past year, such as moving all employee accounts from Google to Zoho workspace, cutting expenses by at least a third, closing a sizable number of its dark stores, and closing its Bengaluru office.
Top executives left the company as well, including the head of finance and co-founders. Following the release of larger losses, the company’s auditor, Deloitte, raised concerns about the company’s ability to continue as a going concern during the regulatory filing.
On the verge of becoming a unicorn—a business valued at more than $1 billion in 2022—Dunzo revealed a significant net loss of ₹1,802 crore for the fiscal year 2023. Its estimated worth as of January 2022 was $775 million.
The rapid commerce industry is extremely competitive and is now mostly a five-horse race. Zomato-backed Blinkit, Zepto, BigBasket’s BBNow, and Swiggy-backed Instamart are the other big companies in this market looking for a way to turn a profit. To increase profitability, they are attempting to maximize dark store efficiency.
The firm was founded in 2014 by Kabeer Biswas, Ankur Aggarwal, Dalvir Suri, and Mukund Jha. Investors in the business include Blume Ventures, Lightbox Ventures, and Reliance Retail Ventures.
