Dunzo, Once a 6,400 Crore Startup Backed by Mukesh Ambani, Faces Financial Turmoil and Lays Off 150 Employees

Founded in 2014 by Kabeer Biswas, Dunzo started as a simple WhatsApp group. Its remarkable growth caught the attention of Mukesh Ambani, who invested over Rs 1,600 crore into the company. 

However, the situation for Dunzo is far from ideal. Reports suggest that the company is currently facing financial hardships, resulting in the departure of several key executives. The workforce has been reduced by 75%, leaving only 50 employees, with over 150 affected by the layoffs.

An email regarding these layoffs pointed to financial struggles, and according to Layoffs.fyi, which monitors job cuts, these layoffs occurred on August 31, 2024.

Following the layoffs, Dunzo has focused on maintaining a streamlined team of 50, prioritizing essential supply and marketplace operations. The current emphasis is on cost-cutting and enhancing efficiency.

Just last month, the company was reportedly close to securing a funding round of between $22 million and $25 million. However, investor concerns about the company’s future and strategic direction have hindered these plans.

Originally launched as a concierge service, Dunzo has transformed into a convenience platform. To date, it has raised nearly $470 million in funding, with Reliance Retail holding the largest stake at 25.8%.

The company has experienced its share of challenges. In early July, Dunzo reported a significant data breach that compromised users’ personal information, including mobile numbers and email addresses. An internal investigation revealed that additional Personally Identifiable Information (PII) was also exposed.

In recent years, Dunzo has encountered a variety of challenges and has had to make difficult choices in an effort to overcome financial struggles. Nevertheless, the outcomes have not been remarkable, as demonstrated by the layoffs and continued efforts to achieve financial stability.

The company is now trying to explore new methods for handling financial situations. The firm looked into expanding into new business areas that could boost its main merchant operations, aiming for projects that would bring in fast profits with low resource needs. 

Kabeer Biswas established the delivery startup Dunzo in January 2015, with its headquarters located in Bengaluru, Karnataka, India.