Dunzo, backed by Reliance Retail, is changing its growth pattern after an energetic first half of the year in which it scaled operations of its 15-20-minute grocery delivery service, Dunzo Daily.
In January, it closed a $240 million funding round led by Mukesh Ambani’s Reliance Retail, which picked up more than 25% of the startup.
Dunzo is now planning to expand operations amid intense competition from rivals like Swiggy’s Instamart, Zepto, and BigBasket’s BB Now, a new entrant.
It had a monthly burn of over Rs. 100 crores, or around $15 million, during the June quarter and in July, according to an internal presentation seen by ET and people briefed on the matter. The sources said they also included the one-time cost of advertising during the Indian Premier League(IPL) and marketing campaigns to expand Dunzo Daily.
It is currently in the midst of funding talks and has engaged investment bank Morgan Stanley, and details of the potential funding round are yet to be finalised. Dunzo is now aiming for a slower rate of growth for the rest of the year on a month-on-month basis. It is also pausing plans to expand from seven cities to 15 or 16.
The firm, projecting 5–10% monthly growth internally, is also looking to push 60-minute deliveries to consumers so it can batch multiple orders together and save on delivery costs.