The Indian hyperlocal delivery startup Dunzo is in late-stage discussions to secure about $50 million in a new financing round, two sources familiar with the matter told TechCrunch, as the Bengaluru-headquartered startup scrambles for comfort in an otherwise funding winter for younger firms.
Reliance Retail and Google, two existing backers of Dunzoare among those who are holding discussions to invest in the new round, the sources said, requesting anonymity as the information is private. The funding deliberations are currently moving ahead largely with existing backers, the sources said.
The startup has been in the market to raise capital for several months and was looking to raise at least $70 million and as much as $150 million, according to the Indian newspaper Economic Times.
Kabeer Biswas, co-founder and chief executive of Dunzo, declined to comment Thursday. Google and Reliance Retail did not immediately respond to a request for comment.
Dunzo competes with Swiggy’s Instamart, YC Continuity-backed Zepto, Tata-owned BigBasket and Zomato’s BlinkIt, all of which are attempting to court a slice of India’s retail market that is estimated to grow to over $800 billion by 2025, according to estimates by brokerage firm Bernstein.
Delivery startups, typically among the most cash-guzzling businesses, are unsurprisingly finding it especially challenging to raise new financing rounds amid the globally weakening economy.
Karthik Gurumurthy, the head of Swiggy’s Instamart business, said on Friday he is leaving the role. Building Instamart has been “arduous with a lot of compromises on physical and mental wellbeing,” he wrote in a LinkedIn post.
It’s a dynamic that is playing out globally. Europe’s rapid delivery market has consolidated down to three companies. Instacart has cut its internal valuation to $10 billion, down from $39 billion in March 2021.
Story was updated with more details on Instamart.
Further reading: Reliance JioMart shutters its quick delivery service ‘Express’ (Economic Times)