Apps that have been using the ‘15 to 30 min delivery model’ for groceries and essentials have recently faced a dip in funding by investors in India and globally. Dunzo’s valuation was around $775 million in January with their largest investor being Reliance, who will be cutting investments short for this financial year compared to last year.
Dunzo which is backed by Reliance is looking to raise ₹825 crores ($100 million) via convertible notes and would be joining a growing list of startups that would like to preserve their existing values. Dunzo is focusing on expanding its business to its quick commerce service called Dunzo daily. Dunzo, a Bengaluru-based startup was initially looking to raise $150 million by selling their stakes however they decided to go with convertible notes. “It will settle closer to $100 million but definitely not anywhere closer to $150 million,” said a team member of Dunzo.
This round of funding will have the Abu Dhabi Investment Authority (ADIA) among other investors. According to reports Dunzo is in talks with Singapore’s Temasek, however, there’s been no breakthrough yet. CEO of Dunzo Kabeer Biswas and ADIA’s spokesperson refused to comment. “Most late-stage startups are raising capital through instruments that don’t impact their valuation amid a tightening funding environment,” said Dunzo’s team member. “They are still trying to bring one or two more external investors to join the round.”
Currently, Reliance owns 25.8% of Dunzo and Google has also been a major investor in Dunzo with a stake of under 20%. Funding in India had fallen down in 2022 by 30% according to a report from industry tracker venture intelligence. Startups are expecting the scenario to change by the mid of this year in terms of funding.
