In a fresh funding round led by Google, Bengaluru-based hyperlocal delivery start-up Dunzo has raised $40 million, gaining massive investments from Lightbox, Evolvence, Hana Financial Investment, LGT Lightstone Aspada, and Alteria, among others.
The company had last raised $11 million in venture debt funding from Alteria Capital in February 2020. The latest funding comes at a time when stories of it having scripted a remarkable turnaround have been doing the rounds. According to an Entrackr report, Dunzo’s revenue has grown by 35 times in FY20 to ₹359.5 crore, while its losses ballooned to ₹338.4 crore.
“As merchants go digital, Dunzo is helping small businesses in their digital transformation journey in support of business recovery,” said Caesar Sengupta, VP, Google, in a statement. “Through our India Digitization Fund, we’re committed to partnering with India’s innovative start-ups to build a truly inclusive digital economy that will benefit everyone.”
The hyperlocal delivery start-up operates in a dozen Indian cities, and allows users to get orders delivered in a matter of hours. Moreover, it has partnered up with mom and pop shops around the country, helping them reach a wider audience with its tech led platform. This became especially helpful during the pandemic-hit 2020, when people could not visit these stores by themselves. Several people also used Dunzo to pick up and move random items such as a laptop charger or wallet or a lunch box from one point in the city to another.
The startup witnessed strong organic user demand during 2020 and is now approximately a $100 million business in annualized gross merchandise value, a two-fold increase over the past year. It has been able to support over 300 neighborhoods across eight cities in the past six months, delivering essential goods to users within 29 minutes on average.
“Dunzo’s mission resonated stronger than ever in 2020. We truly believe we are writing a playbook for how hyperlocal businesses can be built with sustainable unit economics and capital responsibility.” said Dunzo cofounder and chief executive Kabeer Biswas. “As a team, we are more focused than ever to enable local Merchants to get closer to their Users and build one of the most loved consumer brands in the country.”
While Dunzo does deserve credit for their innovative service, they are no longer alone in this market. With the recent entry of Flipkart, as well as Amazon and Swiggy trying to wiggle in, hyper-local delivery sector is heating up. With growing competition, the company needs all the capital it can get, and this funding round will go a long way towards that.