Dunzo FY23 loss widens to Rs 1,800 crore, revenue jumps 4x to Rs 226 crore

Cash-strapped quick-commerce company Dunzo posted a Rs 1,801.8 crore loss in FY23, nearly four times wider than the previous year, even as revenue from operations grew more than fourfold to Rs 226.6 crore.

The Reliance Retail-backed firm, which has sharply shrunk its operations and laid off hundreds of employees this year, saw its total expenses jump to Rs 2,054.4 crore in FY23 from Rs 531.7 crore in FY22. Dunzo had reported a Rs 464 crore loss on operating revenue of Rs 54.3 crore in fiscal 2022.

Employee benefit expenses soared to Rs 338 crore in FY23, from Rs 138.3 crore the year earlier. Advertising expenses grew to Rs 309.7 crore from Rs 64.4 crore, as the company ran an advertising campaign during the Indian Premier League last year.

Over the past few months, investors have been closely monitoring the cash flow at Dunzo as the firm fell afoul of some debt terms and withheld salaries for multiple months, even engaging a payroll financing app to pay salaries for August. Parts of employee salaries from June and July have now been deferred till February next year, ET had earlier reported.

Five members have exited the company’s board, including cofounders Dalvir Suri and Mukund Jha, as well as representatives of investors Reliance Retail and Lightrock. Suri has fully exited the startup.

The Bengaluru-headquartered firm has let go of hundreds of employees and its team size has shrunk to about 200 now from over 1,000 at the beginning of the year. ET reported on October 4 that it is negotiating a lifeline of up to $35 million from existing investors, with some investors suggesting that the firm’s valuation be slashed to about $200 million — one-fourth of its peak value of $800 million. Dunzo also shrank its operations to just a handful of dark stores in Bengaluru and is working with partner stores elsewhere.

The new funding in the company will likely come with a rider that it almost entirely focuses on its B2B business, called Dunzo Merchant Services, which offers last-mile delivery services to clients and has much healthier margins than the B2C operation.