Reliance Retail-backed Dunzo In Talks To Raise Over $70 M: Reports


According to media reports, Reliance Retail-backed Dunzo is in talks to raise up to $100 million (Rs 825 crore) through convertible notes. Amid the funding crunch, startups are looking at alternate funding routes to preserve their valuations. However, Dunzo is primarily raising the fresh fuds to expand its quick commerce service, Dunzo Daily.

Sources further added that the round is in advanced stages of talks and could finally close in the range of $70-100 million. Dunzo was initially looking to bag at least $150 million by selling a stake to the investors, but its decision to opt for convertible notes emphasises the fact that the large startups are struggling to secure funding amid the funding winter.

In the current market atmosphere, investors are cautious when it comes to the valuation of a company; therefore, convertible notes are a popular instrument now among growth- and late-stage startups to raise funds. Following the same strategy, Dunzo intends to raise funds that will allow it to avoid assigning a valuation to itself.

The quick-commerce model, in which platforms promise grocery delivery within 30 minutes, has seen a backlash from inventors for quite some time, owing to the funding crunch.The reports further added that the parent is expected to cut down on funding in the upcoming rounds and issue a relatively smaller cheque size. Abu Dhabi Investment Authority (ADIA), which is one of the investors in Reliance’s Jio Platform, is likely to invest in the upcoming round for the startup. Reliance Retail and Google own 25.8 per cent and 20 per cent in Dunzo, respectively.

Dunzo and its rivals, including Swiggy, Instamart, Zepto, Zomato-owned Blinkit, and Big Basket’s BB Now, have been facing a hard time optimising the delivery time and constantly looking for investors for fresh funds. However, BB Now, which joined the quick e-commerce club lately, is expanding aggressively with the help of a fresh fund from parent company Tata Digital and other investors.

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