Dunzo close to striking a ‘transaction’ to settle dues
Reliance Retail-backed Dunzo is in the final stages of closing a “transaction” with investors that the cash-strapped startup has been looking to raise for at least a year to clear pending liabilities, including salaries.
The arrangement would “find safety for the company into perpetuity”, co-founder and chief executive Kabeer Biswas told employees on Friday in an internal communication, which Mint has seen.
According to a person aware of the developments, Dunzo is in late-stage talks to raise $22-$25 million in a mix of equity and debt from a clutch of new and existing investors.
Dunzo did not confirm this, but Biswas in his message to employees said the company will conduct reviews on 3 and 4 May to finalise the transaction, and that it had negotiated its liabilities to settle for considerably lower amounts.
Dunzo, which is also backed by Google, is in the middle of a liquidity crisis that has over the past year forced it to pivot business models, delay salaries and vendor payments, and reduce its workforce.
Biswas, one of the two co-founders remaining at Dunzo, the other being Ankur Aggarwal, told employees the firm has requested investors for a bridge loan to settle salaries on priority.
“We are expecting closure on this by Monday, and all “current” - Mar & Apr salaries to be cleared as soon as that happens,” Biswas wrote.
He expects the pending salaries to be cleared by next week, and other pending liabilities by 20-25 May, subject to closing of the transaction, as per the communication.
The loan towards clearing employee salaries could be as much as $100,000, said the person mentioned earlier, who declined to be identified.
Dunzo did not immediately reply to Mint’s queries.
Dunzo is yet to pay salaries including full and final settlements to several former employees. In September, it partnered with payroll servicing firm OneTap to disburse salaries for certain months.
“We are trying our best to end this transaction at the ear
liest. It’s a complicated one and has multiple hops. I am sorry for constantly saying sorry even. But given our current situation, few levers stay in our hands, and I apologise,” Biswas said in the message.
“I really do wish to reach a point, where we can stop with the daily/monthly anxieties around salary payments - and hoping the next fortnight allows us to wrap up everything, so that May is the last month of us having to manage this crisis,” the CEO added in his message to employees.
Dunzo, which started as a concierge service and now labels itself as a convenience platform, told employees last month in an email that it was working towards achieving its “first full profitable year” in FY25.